USDA TO PURCHASE U.S. SUGAR, REDUCE COST TO GOVERNMENT 
                                            Release No. 0159.00 
                                                                
                                                                
                             Mary Beth Schultheis (202) 720-4623
                                   mary_beth.schultheis@usda.gov



USDA TO PURCHASE U.S. SUGAR, REDUCE COST TO GOVERNMENT 

        WASHINGTON, May 11, 2000 -- Agriculture Secretary Dan Glickman
announced today that the U.S. Department of Agriculture's Commodity Credit
Corporation (CCC) will buy U.S. sugar to reduce the cost of expected sugar
program loan forfeitures, support sugar growers, and help stabilize low market
prices.  The CCC will seek to buy approximately 150,000 tons of sugar, at
least 75 percent of which will be refined sugar. 
                    
     "We are acting to help address dramatically low sugar prices,"
Secretary Glickman said.  "By buying U.S. sugar now, we expect to save as much
as $6 million in administrative costs that the government might otherwise
incur from expected loan forfeitures later this summer."   

     Domestic prices that U.S. sugar producers receive have fallen 25 percent
over the past year due to excessive supplies of sugar.  Good weather,
productivity improvements, expanded plantings, and increased imports of sugar
from other countries contributed to the oversupply of sugar.  

     In taking this short-term action to discourage forfeitures and reduce
CCC costs, however,  Glickman also challenged the sugar industry to reform its
program.  

     "We expect the sugar industry to rapidly develop conservation and
production options that can form the basis of a sustainable sugar policy," 
Glickman said.  "Simply relying on continued government purchases over the
longer term is neither feasible nor realistic." 

     In addition, Glickman urged sugar growers and processors to voluntarily
increase their participation in USDA's Conservation Reserve Program.  

     "Enrollment would not only help the industry but improve environmental
quality for all Americans," said Glickman.  

     The CCC's action will remove excess sugar from the market, helping to
stabilize prices and prevent the costly forfeiture of sugar pledged as
collateral under the CCC's loan program.

     The CCC will purchase the sugar using its authority under the cost
reduction option of the Food Security Act of 1985.  The CCC plans to store the
purchased sugar and will not sell it back into a depressed U.S. sugar market. 

     Additional purchases may occur in the future, depending on price and
market
conditions.  

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