| FARGO, N.D. -- Florida opponents of the sugar
payment-in-kind program have failed to get an emergency injunction to stop
a voluntary program that could destroy nearly 40,000 acres of beets in the
Red River Valley to help shore up sugar prices.
Florida Crystals Corp. lost its case in a U.S. District court in
Washington but appealed it to a district federal appeals court. Oct. 2,
the appeals court refused to grant an emergency injunction to stop the
program. The appeal remains in placed but soon may become moot as the
program moves forward. The court denied the injunction late Oct. 2 on a
3-0 vote.
Florida Crystals is a refinery owned by the Fanjul brothers of Palm
Beach, Fla. Other plaintiffs are the Sugar Cane Growers of Florida and
Refined Sugar Inc. of Yonkers, N.Y.
A spokeswoman in Washington for Florida Sugar Cane Growers says she
thinks the appeal will go forward. Lawyers for the companies were not
available to confirm that decision, or to offer a rationale.
A victory for PIK
The U.S. Department of Agriculture, under payment-in-kind, pays farmers
to destroy acres of healthy cane or beet production in exchange for sugar
held in government storage. Growers receive PIK certificates representing
amounts of sugar held in government inventories. The certificates are
redeemed to a processor the grower designates. The processors then pay the
grower for the sugar. Cane growers have protested that the program offers
more benefits to beet growers than cane growers.
Neil Juhnke, American Crystal Sugar Co.'s director of agricultural
strategy development, is calling the court's decision a "victory for
PIK participants countrywide and certainly for growers in the Red River
Valley who wanted to participate."
Moorhead, Minn.-based Crystal is advising growers with successful bids
not to destroy acres under the PIK program until they get confirmation
letters from the U.S. Department of Agriculture's Farm Service Agency
management center in Kansas City, Mo.
Juhnke says the threat of legal action shouldn't stop the process now.
"The (Floridians) may still pursue the appeal, but the normal course
of action would be a hearing in 30 days," Juhnke says. "That
would mean the PIK program would be done and gone."
Similarly, Allen Larson, controller for Minn-Dak Farmers Cooperative in
Wahpeton, N.D., says the unanimous decision "gives you some idea of
the merits of an appeal."
"If they'd won the injunction, USDA would have been faced with a
decision of whether to scuttle the whole program," Larson says.
"With the loss on the injunction, I'm not sure why they would spend
more legal money to further an appeal."
Jim Johnson, president of the U.S. Beet Sugar Association in
Washington, agrees, saying "For the life of me, I can't think of a
rational reason to pursue a hearing, a trial on the facts," Johnson
says, noting the decision of the lower court.
Bid acceptance
Juhnke says acres bid into the program were accepted at rates of nearly
88 percent or less of their sugar productive capacity. About 82 percent of
Crystal's bid acres fell below that mark, meaning about 29,227 acres may
be accepted.
"Our advice to the growers is they shouldn't destroy the acres
until they receive written confirmation from the FSA," Juhnke says.
"I don't know when that'll come, but we're expecting it in the first
part of (this) week."
Crystal's biggest concern is the time-
liness of bid acceptance. Jay Hochhalter, a Farm Service Agency state
program specialist in Fargo, N.D., says farmers are awaiting their letters
from Kansas City and county offices are awaiting authority to approve
applications from Washington. Farmers have the right to change the acres
they had bid into, Hochhalter says, but only if the different acres remain
with the original farm unit in which they were bid.
"We've urged (the FSA) to speed that process along as fast as they
can because our growers are at risk for freezing beets in the ground in a
few weeks," Juhnke says.
Juhnke says there is no apparent geographical pattern to the bids
excepted. He says bids probably came in at higher percentage rates in
areas with excellent crops this year, such as the western Drayton, N.D.,
area and parts of the Crookston, Minn., district. Similarly, shareholders
of Minn-Dak Farmers Cooperative in Wahpeton offered 11,000 acres, with an
estimated 9,700 acres beneath the cutoff.
Minn-Dak will pay growers 17 cents a pound for sugar they receive under
the program, Larson says. The payment will be made Dec. 14. Other
companies have made an estimated payment and won't make a final payment
until the close of their fiscal year.
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