USA: Sugar Industry Sees 'PIK' as Step Toward Correcting Market
The U.S. sugar industry, suffering the lowest prices in 22 years, expressed relief today that action by the Department of Agriculture (USDA) is a positive move toward restoring stability in the supply and marketing of sugar.Specifically, USDA announced it is initiating a "payment-in-kind," or PIK, program for sugar. Under a PIK program, farmers will have the option of not harvesting a portion of their 2000 crop, and in return receive from USDA sugar the agency has or will be obtaining through purchase or forfeiture.Earlier this week, James Horvath, president and CEO of American Crystal Sugar Company, a cooperative owned by 3,000 farmer-shareholders in the Red River Valley of Minnesota and North Dakota, testified before the Senate Agriculture Committee on the value of a PIK program, which is authorized under federal law as a cost-saving measure.He said his farmer-owners "are supportive of this (PIK) concept. We believe it achieves several worthwhile objectives for the industry and the government." He listed these benefits for PIK:
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