Sugar producers, processors and USDA discuss PIK program.
Sugarbeet and sugarcane producers and processors met with representatives from the USDA and the Office of Management and Budget July 6 in Washington, DC. They discussed the implementation of a Payment-In-Kind program that would use the 132,000 tons of sugar purchased by the USDA in May.
According to Ruthann Geib, vice president of the American Sugarbeet Growers Association, the program has a good chance of going through, but it must happen by the end of July, and there are many details yet to be resolved.
USDA must implement the program before the first acre of sugarbeets is harvested, which will happen in the Red River Valley in September. But it has to hold a 30-day public comment period on the new regulations of the program before implementation.
If the program is implemented, each producer who chooses to participate could destroy about 15 acres of beets (based on a payment limitation of $20,000 per producer) and receive a PIK certificate for the equivalent value of the sugar production of those acres. The certificate would then be presented to the sugar company with which they hold a contract. The company would redeem that certificate from the USDA inventory of sugar.