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Monday, February 11, 2013

Sugar Program: The Basics

Remy Jurenas
Specialist in Agricultural Policy

The sugar program provides a price guarantee to the processors of sugarcane and sugar beets, and in turn, to the producers of both crops. The U.S. Department of Agriculture (USDA) further is directed to administer the program at no budgetary cost to the federal government by limiting the amount of sugar supplied for food use in the U.S. market. To achieve both objectives, USDA uses four tools—authorized by the 2008 farm bill and longstanding trade law—to keep domestic market prices above guaranteed levels. These are:

  • price support loans at specified levels—the basis for the price guarantee, 
  • marketing allotments to limit the amount of sugar that each processor can sell, 
  • import quotas to restrict the amount of sugar allowed to enter the U.S. market, 
  • a sugar-to-ethanol (feedstock flexibility) backstop—available if marketing allotments and import quotas fail to prevent a sugar surplus from developing (i.e., to keep market prices above guaranteed levels).

Date of Report: January 23, 2013
Number of Pages: 11
Order Number: R42535
Price: $29.95

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