The U.S. Sugar program is the federal commodity 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, 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 This act has been superseded by the 2007 ...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 beets and sugarcane. Designed to protect the incomes of the sugar industry-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 International trade, fo ...

, 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 (NAFTA) and

Uruguay Round Agreement on Agriculture The Agreement on Agriculture (AoA) is an international treaty of the World Trade Organization. It was negotiated during the Uruguay Round of the General Agreement on Tariffs and Trade, and entered into force with the establishment of the WTO on Ja ...

. 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.

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