The U.S. sugar industry has voluntarily agreed to limit production, in a collaborative effort to make the federal government’s sugar provisions in the 2002 Farm Bill cost-free to taxpayers. The U.S. Department of Agriculture’s Commodity Credit Corporation placed allotments, or
The U.S. sugar industry has voluntarily agreed to limit production, in a collaborative effort to make the federal government’s sugar provisions in the 2002 Farm Bill cost-free to taxpayers.
The U.S. Department of Agriculture’s Commodity Credit Corporation placed allotments, or allocations, or limits, on tons of sugar each grower can harvest. Storage on any tonnage produced above the allotments is the responsibility of the grower.
Gay & Robinson, Inc., the island’s remaining sugar plantation, has an allotment of 62,163 tons of sugar it can produce in the USDA’s current crop year, which runs from Oct. 1, 2002 to Sept. 30, 2003.
The grower is now responsible for storing anything produced beyond that allocated tonnage, said Alan Kennett, G&R president and manager.
The domestic industry was having trouble convincing elected leaders to support sugar provisions in the farm bill when those provisions cost taxpayers money, so agreed to limit production by way of the government allotments in order to exert some control over domestic supplies and prices and still allow foreign sugar into U.S. markets through World Trade Organization quota agreements, explained Kennett.
“We can live with our allotment. We will not produce that amount of sugar,” he said.
If planting plans work out as anticipated, G&R will eventually harvest around 70,000 tons of sugar between its Hanapepe, Makaweli, Kaumakani and Waimea acreage, when added to tonnage from acres under production in the fertile fields of Kekaha formerly worked by Amfac’s Kekaha Sugar Company and Amfac Sugar Kauai, he said.
The allotments, which impact cane and beet sugar growers from Florida to Kaua’i, won’t be assigned every year, and are based on five-year harvest averages.
If G&R produces less than its allotment, the USDA could assign the Kaua’i grower’s tonnage under allotment to other growers that produce tonnage above their allotments, he added.
The 2002 crop-year allotment is the first since 1995, and is part of the 2002 Farm Bill signed into law by President Bush earlier this year, according to a USDA Commodity Credit Corporation spokesman.
The allotments are in place in an attempt to keep production close to demand. “So we have to discipline ourselves,” Kennett said of the industry.
“It’s to try and balance the supply to protect the government from being (running) a cost program,” Kennett said of allotments. The current farm bill says the sugar provisions will not cost taxpayers a penny, and in previous years the government paid to store surplus sugar, he added.
Allotments are in place to prevent some growers from continuing to expand and over-produce, although that has not been a problem in Hawai’i, he said.
Hawai’i producers, those being G&R on Kaua’i and Hawaiian Commercial & Sugar Company on Maui, have seen annual declines in tonnage harvested for several years, he noted.
HC&S has an allotment of 256,666 tons, and Kennett doesn’t think the Maui operation will produce more sugar than that, either.
“Hawai’i can live with its allotment.”
Staff Writer Paul C. Curtis can be reached at mailto:pcurtis@pulitzer.net or 245-3681 (ext. 224).
