Two of South Florida's three sugar companies say they're interested in the deal.

In August and September, the sugar growers handed over 294,000 tons of sugar worth $100 million to the federal government rather than pay back their federal loans. Low prices made selling the sugar unattractive.

Since then, the United States has been paying the three companies a total of almost $470,000 a month to store the forfeited sugar in their own warehouses, said Lance Simson, project manager at the U.S. Department of Agriculture's Commodity Credit Corp. in Kansas City, Mo.

Beginning June 1 the CCC is giving growers the option of receiving their rent payments in sugar, instead of in cash. The program will be offered monthly for an indefinite period of time.

The two interested firms say the deal will help end uncertainty about what will be done with the government-owned sugar.

The local sugar is part of 1.1 million tons forfeited nationwide by sugar cane and sugar beet growers. The CCC returned some sugar to beet growers who volunteered to plow up some of their acreage. It is still holding 793,000 tons, for which it is paying the nation's growers $1.4 million a month in storage fees.

"From a business viewpoint, instead of having the sugar sitting there, now we have the ability to market it," said Clewiston-based U.S. Sugar Corp. spokeswoman Judy Sanchez. "The main benefit to sugar producers is reducing the inventory that's in the government's hands."

U.S. Sugar forfeited 35,000 tons out of a 1990-2000 crop of 850,000 tons. The CCC says it's paying the company $56,000 a month in storage fees.

Palm Beach-based Florida Crystals spokesman Jorge Dominicis also said his company, which forfeited 139,000 tons of its 732,000-ton sugar crop, will probably decide to take sugar as payment. The CCC says it's paying Florida Crystals $223,441 a month in storage fees.

Barbara Miedema, spokeswoman for the Sugar Cane Growers Cooperative of Florida in Belle Glade, said the co-op is still evaluating the proposal, but probably will opt to continue to receive monetary payments rather than sugar. The co-op, representing 56 growers, forfeited 108,000 tons of sugar, almost one-third of its 1999-2000 crop. The CCC says it's paying the co-op $190,400 a month in storage fees.

"We would prefer not to have more sugar in the market at this time," Miedema said.

Simson says he has not figured just how much sugar could be returned to growers' hands, but said industry estimates of 36,000 to 50,000 tons a year are about right.

The sugar was forfeited after domestic sugar prices hit historic lows of 17 cents a pound. Now raw sugar is 21.5 cents a pound, above the 19.5 cents growers say it costs to produce and ship a pound of sugar, making it more lucrative to sell the sugar than receive rent payments for it.

So far, the new program isn't causing much of a stir among growers.

"It's not a terribly attractive program," said Jack Roney, director of economics for the Washington-based American Sugar Alliance, a lobbying group. "Some producers' reaction has been: `We've got plenty of sugar. What we need is cash.' "

But the program has raised the hackles of lawmakers who oppose U.S. sugar policy.

"The whole thing cries out for the reform he feels needs to occur," said Andrew Fisher, press secretary for Sen. Richard Lugar, R-Ind., chairman of the Senate Agriculture Committee. "This is just symptomatic of what happens when the government gets involved."

susan_salisbury@pbpost.com