USDA publishes final feedstock flexibility rule

By Agri-Pulse staff

© Copyright Agri-Pulse Communications, Inc.



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WASHINGTON, July 26, 2013 - The Farm Service Agency (FSA) today announced that the final Feedstock Flexibility Program (FFP) rule is on public display and will be published in the Federal Register on Monday, July 29, 2013.

< Lets Talk Fooddiv>Congress created the FFP in the 2008 Farm Bill, allowing for the purchase of excess sugar to produce bioenergy in order to avoid forfeiture of sugar pledged as collateral by processors when securing short-term commodity loans from USDA's Commodity Credit Corporation (CCC). 

 

Federal law allows sugar processors to obtain loans from the CCC with maturities of up to nine months when the sugarcane or sugar beet harvest begins. Upon loan maturity, the sugar processor may repay the loan in full or forfeit the collateral (sugar) to the government to satisfy the loan. The last time sugar forfeitures occurred was in 2004 but atypical market conditions have necessitated USDA to take a number of actions this crop year to manage the sugar supply, the USDA announcement noted.

The American Sugar Association said in a statement that sugar surpluses are “wreaking havoc” on the U.S. sugar market.

“Producer prices for sugar have plunged 55% in two years, to below 1980's levels,” ASA stated. “We are pleased that the USDA has completed the rulemaking for implementation of this program.”

"The FFP will save money relative to the cost to the government from the sugar loan forfeitures that would otherwise result from the flood of subsidized Mexican sugar this year,” ASA noted.

As part of its efforts to manage the surplus, USDA is currently operating a purchase of sugar from domestic sugarcane processors under the Cost Reduction Options of the Food Security Act of 1985, and simultaneously will exchange this sugar for credits offered by refiners holding licenses under the Refined Sugar Re-export Program. 

For further background on FFP and other sugar programs administered by USDA's Farm Service Agency, go online to www.fsa.usda.gov/.

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