[Federal Register Volume 66, Number 177 (Wednesday, September 12, 2001)]
[Notices]
[Pages 47447-47448]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-22940]


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 Notices
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  Federal Register / Vol. 66, No. 177 / Wednesday, September 12, 2001 / 
Notices  

[[Page 47447]]



DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

RIN 0560-AG48


Sugar Payment-In-Kind (PIK) Diversion Program

AGENCY: Commodity Credit Corporation, USDA.

ACTION: Notice of program Implementation.

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SUMMARY: This notice implements section 1009(e) of the Food Security 
Act of 1985 with respect to existing Commodity Credit Corporation (CCC) 
inventories of sugar. Based on the combination of relatively low market 
prices, CCC holding sugar inventory with no other specific disposal 
plan, and U.S. sugar producers' growing realization of the major market 
problems facing the sugar sector, CCC is implementing a Sugar Payment-
In-Kind (PIK) Diversion Program to help reduce CCC's sugar inventory 
and related storage costs.

EFFECTIVE DATE: September 7, 2001.

FOR FURTHER INFORMATION CONTACT: Thomas W. Bickerton, Economist, Dairy 
and Sweetener Analysis, Farm Service Agency, USDA, STOP 516, 1400 
Independence Avenue, SW., Washington, DC 20250-0516.

SUPPLEMENTARY INFORMATION:

Authority for a Sugar PIK Diversion Program

    Authority for CCC to conduct a Sugar PIK Diversion Program is based 
on section 1009(e) of the Food Security Act of 1985, which provides 
that when a loan program is in effect, the Secretary may, at any time 
before harvest, accept bids from producers to convert planted acreage 
to diverted acreage in return for payment in kind from CCC surplus 
stocks of the commodity to which the acreage was planted. Subsection 
(e) also states that no producer may receive over $20,000 worth of in-
kind payments. Such action can be taken only if: (1) Changes in 
domestic or world supply or demand conditions occurred after the 
announcement of the loan program for the crop and (2) without action to 
further adjust production, the Government and producers will be faced 
with a burdensome and costly surplus. Overall, the measures addressed 
in section 1009(e) and other subsections can be taken under the terms 
of the statute only if they would reduce direct and indirect costs to 
the Government without adversely affecting the income of participating 
small- and medium-size producers.

Basis for Implementing a Sugar PIK Diversion Program

    CCC is implementing a Sugar PIK Diversion Program to reduce the 
cost of the sugar loan program by eliminating up to 200,000 tons of 
CCC's sugar inventory and related Government storage costs.

Program Design

Administration

    This program will be administered by the Executive Vice President, 
CCC as follows.
1. Bid Submission Procedures
    (a) Producers wishing to participate in the program must submit a 
bid to their local Farm Service Agency Service Center during the period 
between September 10 and 21, 2001. The bid must be on form CCC-744. The 
contract will provide for the diversion of acreage planted to sugar 
beets or sugar cane which are under contract for delivery to a sugar 
processor. Diverted acreage may not be harvested for sugar or used for 
any other commercial purposes. In return, producers will receive in-
kind payments of sugar from CCC's inventory.
    (b) The bid must provide information necessary for conducting the 
program, including but not limited to, the number of acres that the 
producer will divert; the producer's 1997-1999 simple average sugar 
beet or sugar cane yield, the 1997-1999 simple average sugar content of 
the producer's beets or cane, the processor's 1997-1999 simple average 
recovery rate, and the value of CCC sugar sought as payment.
    (c) Notification of acceptable bids, unless otherwise determined by 
CCC, will be published on or about September 28, 2001.
2. In-Kind Payments
    (a) CCC will, through such methods as CCC deems appropriate, make 
in-kind payments in the form of sugar held in CCC inventory.
    (b) Subject to CCC approval, producers will have the option of 
receiving either refined beet sugar or raw cane sugar.
    (c) The value of CCC-owned inventory is dependent upon the storage 
location of the sugar and the type of sugar (raw or refined). 
Accordingly, the quantity of sugar to be paid by CCC as an in-kind 
payment to a producer will be determined by dividing: (1) The total of 
the bid amount submitted by the producer and accepted by CCC, by (2) 
the value per unit of CCC's inventory at the storage location where 
title will transfer from CCC to the producer, or the producer's 
assignee.
    (d) Producers may assign their in-kind payments only to the 
processor with whom the producer has a 2001-crop sugar contract.
    (e) CCC will transfer title of the sugar to the producer, or the 
producer's assignee, no earlier than October 1, 2001, and no later than 
March 31, 2002, as determined by CCC, by notifying the producer or 
assignee that the sugar is available to them. CCC will stop storage 
payments on this sugar on the date of transfer.
3. Payment Limitation
    (a) A $20,000 payment limitation applies separately to each 
``producer,'' defined as an individual, and each individual member of a 
joint operation or joint venture. However, minors are combined with 
their guardian or parent for payment limitation purposes.
    (b) This payment limitation is separate and distinct from all other 
CCC program payment limitations. In the case of current verbal 
contracts with processors, proof of payment as multiple persons may be 
required for multiple program eligibilities. Also, husbands and wives 
may be required to be separate signatories to written contracts in 
order to be separately eligible for payments.
4. Planting Limitation to the 2001 Crop
    (a) Participation in the 2001 PIK Program is open to all producers,

[[Page 47448]]

regardless of whether or not they participated in the 2000 PIK Program.
    (b) Participants in the 2001 PIK Program will be ineligible to 
participate in any future sugar PIK diversion program if they plant or 
have an interest in, directly or indirectly, more total acres to sugar 
beets or sugar cane in future years than in 2001.
5. Bid Rankings
    CCC will rank eligible bids on the basis of the bid amount as a 
percentage of the bid cap, which is CCC's estimate of the value of the 
diverted sugar production. Eligible bids with the lowest of such 
percentages will be selected first. In the case of bids with identical 
ranking, selection will be based on random selection or pro rata 
shares, as CCC deems appropriate.

    Signed in Washington, D.C., on September 7, 2001.
James R. Little,
Acting Executive Vice President, Commodity Credit Corporation.
[FR Doc. 01-22940 Filed 9-7-01; 4:28 pm]
BILLING CODE 3410-05-P