Questionable Payments and Loan Defaults in Sugar Programs: Report to the Congress

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Page 2 - Secretary") is authorized and directed to make available through loans, purchases, or other operations, price support to cooperators for any crop of any basic agricultural commodity...
Page 1 - ... substantial cause of serious injury or threat thereof to the domestic industry producing an article like or directly competitive with the imported article (19 USC 2251-2254).
Page 6 - ... in payments by USDA above the support price for sugar. — Processors were underpaid about $465,000 because three sugar processors failed to comply with USDA reporting regulations. — Some sugar processors paid about $3.5 million less than would otherwise have been paid to their producers because USDA did not provide sufficiently explicit directions on how producer payments were to be computed. Agricultural workers do not share program benefits since the authorizing legislation does not require...
Page 17 - ... eligible sugar and had made an administrative decision to further extend the eligibility, pending a legal opinion, to permit the practice described above. In this regard, USDA has requested our advice on this issue and our response is currently under development. USDA's Office of Inspector General, in its broader review of the payment program, stated that "ASCS made an administrative decision which permitted program participants to claim support payments of $8.9 million on prior years
Page 11 - USDA paid about $6.l million in price-support payments for sugar we believe may have been ineligible for participation in the payment program. The specific elements of these payments are as follows. — Three integrated raw sugar processor/refiners received increased price-support payments of about $4.8 million because of the methods of determining eligibility and marketing USDA permitted in claiming payments. — At least three beet sugar processors received price-support payments in excess of $800,000...
Page 23 - Act of l977, the Secretary of Agriculture establish minimum wage rates for agricultural employees engaged in sugar production. The rates set were above the Federal minimum wage. The now defunct Sugar Act also mandated minimum wages for sugar agricultural workers. CONCLUSIONS The administration of the sugar price-support payment program has resulted in what we believe to be questionable payments of about $26.9 million to processors. These payments resulted from a variety of decisions made by USDA...
Page v - GAO's suggestion to limit support payments to any one processor such that the sum of Government payments and market prices does not exceed the support level would create a strong disincentive to individual processors to obtain a high market price. The Department also believes that there is ample precedent in other commodity programs for these payments. GAO believes that it is to each firm's advantage to get the best possible price and that payments above the support level are not needed as an incentive....
Page 14 - ... examine their refined sugar production and commitment records, and the third said approval would be needed from the firm's attorneys before permission could be granted for us to examine such records. The processor/refiners apparently adopted this position because they believed that all raw sugar they produced from sugarcane they either grew or purchased from independent Louisiana growers was eligible for price-support payments without considering refined sugar marketed or committed. ! We used...
Page 7 - November 7, l977, for future delivery of sugar could not participate in the loan program and before this amendment had been ineligible to receive direct payments. Primarily because final weights are not known for some time after sugar is reported as marketed, USDA decided to make initial payments to processors for 90 percent of the pounds reported as marketed. I/ The...
Page 13 - ... subsidy payments at their highest. These two processor/ refiners considered their sugar marketed as it was processed into refined sugar. The third processor/refiner had allocated the amount of sugar placed under the payment program based on the period over which it expected to sell sugar from the l977 crop.

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