The new farm bill would retain much of the existing system, which sugar producers defend on the ground that virtually every country with a domestic sugar industry has strong protections. But it would add more guarantees, including one that would ensure US producers capture 85 percent of the market no matter how much sugar comes in from abroad.
SELL AT A LOSS
To carry out that policy, the government would buy excess sugar and sell it at a loss to ethanol producers. They ferment corn starch to ethanol, but adding a little sugar can speed the reaction. Mark Keenum, the Bush administration's undersecretary of agriculture for farm and foreign agricultural services, said that administering the ethanol program would be "very cumbersome."
Keenum said that the Agriculture Department would end up buying sugar at US$0.22 a pound (454g) and selling it to ethanol producers for US$0.04 to US$0.07 per pound.
"You can easily do the math and look at the loss potential," he said.
He added that the department tried selling sugar to the ethanol industry in 2001, but ethanol producers were interested in buying only about 10,000 of the approximately 100,000 tonnes made available to them, even at a low price of US$0.04 per pound.
Ethanol producers, who could be forced to invest in new equipment to process sugar, say they do not think much of the idea.
Matt Hartwig, a spokesman for the Renewable Fuels Association, said: "In today's grain-based biorefineries, the amount of sugar you could introduce into the process would be fairly small."
Keenum said the Agriculture Department did not want to be forced to sell only to ethanol producers, arguing that it might get a better price selling sugar for animal feed, pet food or industrial alcohol. On that point, the sugar lobby is willing to negotiate.
The sugar producers say that whatever its costs, the new farm bill is needed to save their industry.
"We don't like the government spending money, but if they are going to give away our market to foreign imports then we have to look for alternatives," Simon said.
"We're confident we can get this farm bill passed and that will keep our heads above water until we're able to realize the full opportunities of energy production from sugar cane," he said.
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