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FARGO, N.D. (AP) -- Red River Valley sign-up for the
payment-in-kind program for sugar beet growers has been slowed
because the government is unsure if limited liability partnerships
are eligible.
James Horvath, president of American Crystal Sugar Co., based in
Moorhead, Minn., said about 210 of the co-op' s 1,200 to 1,300
farm units had made bids to be included in the program by Friday.
" That, from my perspective, is good, given that there' s a
fair amount of confusion related to how the government defines a
'producer', " Horvath said.
The program has been used for grain since the 1980s, but this is
the first time for sugar.
Under the program, the government pays growers to destroy healthy
acres to reduce production that otherwise the government would own
and have to dispose of.
The program was initiated this year in an effort to decrease
sugar stocks. Growing worldwide sugar production over the past two
years has greatly increased global stocks, resulting in plummeting
sugar prices.
Under this year' s program, farmers will receive sugar
certificates at a rate of 19 cents a pound, in exchange for
destroying beets. The co-op will take about 4 cents of that to
fairly compensate all of their grower-members for efficiency losses
in running factories at reduced capacity.
" It' s a shame the sugar markets have gone to pot, "
said Jim Shellito of Comstock, Minn.
He was signing up Friday with his son and partner, Scott.
Shellito, who has grown beets since 1990, said he has preferred
the program with zero government costs, as it' s been run in recent
years.
" There' s too much sugar just like there' s too much corn
and too much wheat -- too much everything, " Shellito said.
" I' d say the program is pretty well organized for not having
much time to put it together."
The Shellitos submitted a bid on roughly 20 of their 320 acres,
but declined to give specifics. Most farmers have been bidding
enough acres to achieve their maximum $20, 000 payment limit.
The Moorhead factory district estimated that about half of the
bidders will have come to the factory to meet with agriculturists by
Friday. The sign-up will continue into next week.
Company sign-up data must be turned over to the federal Farm
Service Agency on Sept. 5.
The pre-pile harvest starts Aug. 30. Not all growers start on
that date, but all will harvest a percentage of their acres or open
fields before Oct. 1, when the full-scale harvest will start,
assuming suitable weather.
Before the uncertainty on farm entities, the goal was to get at
least 75 percent of the paperwork done by Aug. 25, and mop up before
the government' s deadline on Sept. 1.
Horvath said the Agriculture Department is working to clarify
whether limited liability partnerships can be eligible. As of
Friday, they could not.
Horvath said he couldn' t estimate how many of Crystal' s beet
acres are controlled by limited liability partnerships, a business
form that affords certain tax advantages.
" We are waiting for USDA to decide on that, " Horvath
said. " I understand there' s going to be a favorable ruling.
It' s a matter of getting clearance in Washington."
Earlier, Crystal had lobbied to make farmers who received only
minimal crop insurance payments for wind and crusting eligible for
the program. They cannot be.
" There were a fair number of problems like that in the
Drayton district this spring, but it hasn' t affected the entire
shareholder group, " Horvath said.
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