| FARGO -- A third of the region's sugar beet farmers may be ineligible
for the payment-in-kind program because they expanded acres since last
year.
The U.S. Department of Agriculture currently plans to enforce a rule
that prevents participation by growers who have expanded their personal
acreages in the past year. The PIK program is designed to revive sugar
markets by destroying healthy beets. Sign-up was announced to start Sept.
10.
Gary Nelson, Farm Service Agency state director for North Dakota, and
key staffers were huddling with American Crystal Sugar Co. and Minn-Dak
Farmers Cooperative in the Fargo area Thursday, discussing how the program
will work.
David Berg, vice president for agriculture at American Crystal Sugar
Co. in Moorhead, said all beet companies in the nation are fighting the
enrollment limitation rule.
"The provision in last year's PIK enrollment contract said that if
an individual producer increased acres beyond what was planted in 2000,
that that producer may -- MAY -- not be eligible to participate in a
future PIK program," Berg said.
"We were guided, very clearly, by USDA at that time that that
provision would not be enforced on individual producers this year because
USDA's intention was to limit speculative acreage increases by companies
that might exploit the program."
Total U.S. beet plantings are down 12 percent, Berg said. American
Crystal's acreage is down marginally from last year. But while the
industry scaled back, some growers did add acres over 2000 levels. About
one-third of Crystal's growers are in that position, he said.
"We and all other beet processors have protested very strongly to
USDA that these individuals should not be penalized when American Crystal
fulfilled the intent of the program," he said.
Berg said USDA should use its discretion to allow individuals to fully
participate despite their individual expansion. Nelson of the FSA said he
hoped the agency has all the information it needs by Tuesday.
"We may, if it gets delayed, be notifying the companies who will
notify producers to wait until Tuesday or Wednesday before they start
coming in," Nelson said.
Berg said FSA offices on both sides of the border are planning to start
making appointments Monday with farmers to come in later in the week.
Skip a step
Unlike last year, this year's PIK program will skip the step of signing
up at co-op offices and will instead have applicants go to local FSA
offices. Crystal and Minn-Dak will provide some staff as volunteers at the
government offices to handle their part of the sign-up. That involves
helping pick which entities on farms should be enrolled and to make
appropriate amendments for Crystal agreements.
Luther Markwart, executive vice president of the American Sugarbeet
Growers Association in Washington, said the change was made because having
the processor between the grower and the FSA caused some
"confusion" in 2000.
"The fact that this thing is so late this year, they figured to
avoid that confusion and go directly to the (FSA) office they'd make sure
they don't run into those problems again," he said.
The USDA announced the program Aug. 31. The program will involve both
beets and cane but will limit the program to 200,000 tons of sugar. Last
year's similar PIK program did not include limits and took around 277,000
tons of sugar out of production. About a third of that, accounting for
about 30,000 acres, came from Crystal.
"We would have preferred no limits, but overall this is very good
news," said Kevin Price, Crystal's director of governmental affairs
in Moorhead.
Mark Weber, executive vice president of the Red River Valley Sugarbeet
Growers Association, praised the announcement.
"With this announcement it's hopeful now we'll see stronger prices
to avoid forfeitures that were probably in the making," Weber said.
The PIK program will help shrink the pile of 741,148 tons of sugar held
in inventory by the USDA's Commodity Credit Corp. The move also will
reduce the inventory costs to the government. The CCC is incurring $1.35
million on 446,594 tons of refined sugar and 294,554 tons of raw cane
sugar.
As was true last year, individual farmers will be limited to a maximum
of $20,000 value in sugar. Sign-up will begin Sept. 10 and end Sept. 21.
Individual farmers should contact USDA Service Center or Farm Service
Agency county offices between those dates to obtain information. They'll
report specific acres to be diverted and complete forms.
According to the USDA release, the amount of sugar in dollars-per-acre
that the producer will generate will be computed for each producer. Each
will specify the amount of sugar the producer will take to divert the
acres.
"Bids will be ranked on the percentage that the second amount is
of the first" amount, the release said. "The bids will be ranked
so as to ensure that the 200,000-ton goal is not exceeded."
By Sept. 28, the department will announce which bids are accepted,
based on the ranking percentage, and subject to other "eligibility
criteria" not available until after Sept. 10. The PIK concept is
authorized under the cost reduction options written into the 1985 farm
bill.
"USDA's objective is to move this program toward a more
market-oriented system that would reduce government involvement in the
storage of sugar," the department said in the release. "Large
publicly held sugar stocks have a distorting impact on the market and the
sweetener industry as a whole."
Information on the program and bid process will be available on the FSA
Web site, www.fsa.gov before Sept. 10. |