The U.S. Sugar program is the federal

commodity In economics, a commodity is an economic good, usually a resource, that has full or substantial fungibility: that is, the market treats instances of the good as equivalent or nearly so with no regard to who produced them. The price of a comm ...

support program that maintains a

minimum price A price floor is a government- or group-imposed price control or limit on how low a price can be charged for a product, good, commodity, or service. A price floor must be higher than the equilibrium price in order to be effective. The equilibrium ...

for

sugar Sugar is the generic name for sweet-tasting, soluble carbohydrates, many of which are used in food. Simple sugars, also called monosaccharides, include glucose, fructose, and galactose. Compound sugars, also called disaccharides or double ...

, authorized by the

2002 farm bill The Farm Security and Rural Investment Act of 2002, also known as the 2002 Farm Bill, includes ten titles, addressing a great variety of issues related to agriculture, ecology, energy, trade, and nutrition. This act has been superseded by the 2007 ...

(P.L. 107–171, Sec. 1401–1403) to cover the 2002-2007 crops of

sugar beet A sugar beet is a plant whose root contains a high concentration of sucrose and which is grown commercially for sugar production. In plant breeding, it is known as the Altissima cultivar group of the common beet (''Beta vulgaris''). Together wi ...

s and

sugarcane Sugarcane or sugar cane is a species of (often hybrid) tall, Perennial plant, perennial grass (in the genus ''Saccharum'', tribe Andropogoneae) that is used for sugar Sugar industry, production. The plants are 2–6 m (6–20 ft) tall with ...

. Designed to protect the incomes of the

sugar industry The sugar industry subsumes the production, processing and marketing of sugars (mostly sucrose and fructose). Globally, most sugar is extracted from sugar cane (~80% predominantly in the tropics) and sugar beet (~ 20%, mostly in temperate cli ...

-growers of sugarcane and sugar beets, and firms that process each crop into sugar - the program supports domestic sugar prices by: :(1) making available

nonrecourse loan Nonrecourse debt or a nonrecourse loan (sometimes hyphenated as non-recourse) is a secured loan (debt) that is secured by a pledge of collateral, typically real property, but for which the borrower is not personally liable. If the borrower defau ...

s to processors (not less than 18¢/lb. for raw cane sugar, or 22.9¢/lb. for refined beet sugar); :(2) restricting sugar imports using a

tariff rate quota A tariff is a tax imposed by the government of a country or by a supranational union on imports or exports of goods. Besides being a source of revenue for the government, import duties can also be a form of regulation of foreign trade and polic ...

, and :(3) limiting the amount of sugar that processors can sell domestically (under marketing allotments) when imports are below 1.532 million short tons.

Import restrictions Protectionism, sometimes referred to as trade protectionism, is the economic policy of restricting imports from other countries through methods such as tariffs on imported goods, import quotas, and a variety of other government regulations ...

are intended to meet U.S. commitments under the

North American Free Trade Agreement The North American Free Trade Agreement (NAFTA ; es, Tratado de Libre Comercio de América del Norte, TLCAN; french: Accord de libre-échange nord-américain, ALÉNA) was an agreement signed by Canada, Mexico, and the United States that crea ...

(NAFTA) and Uruguay Round Agreement on Agriculture. Processor and refiner marketing allotments are set by USDA according to statutory requirements. Marketing allotments and new payment-in-kind authority are designed to help the USDA meet the no-cost-requirements to the federal government by avoiding the forfeiture of sugar put under loan. Other parts of the new program can include a storage loan program for sugar processors, and reduced (by 1%) the USDA interest rate charged on sugar loans.

References

Further reading