Sugar support program to cost taxpayers $660 million; USDA will be forced to unload sugar at 20-33% of cost to ethanol producers

More details have emerged regarding the sugar buy-back program in the new Farm Bill.

The bill calls for the USDA to buy excess sugar from US producers at 22 cents per pound, to cope with the expected flood of cheap Mexican sugar when sugar trade restrictions are lifted in January under NAFTA. The USDA will resell the sugar to ethanol producers at 4 to 7 cents per pound. The program is expected to cost taxpayers $660 million.

A similar buyback program in 2001 resulted in the sale of only 10,000 tons of sugar to ethanol producers at 4 cents per pound, out of 100,000 tons offered.

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