2014 Farm Bill

Page 1

UNITED STATES DEPARTMENT OF AGRICULTURE

FARM SERVICE AGENCY FACT SHEET

October 2017

Feedstock Flexibility Program for Sugar

OVERVIEW

The Feedstock Flexibility Program (FFP) for sugar, 

established in Title IX of the Food, Conservation 

and Energy Act of 2008 (2008 Farm Bill), 

authorizes the U.S. Department of Agriculture 

(USDA) to purchase sugar from domestic 

sugarcane and sugar beet processors and sell it to 

bioenergy producers for biofuel production. The 

FFP was extended under the 2014 Farm Bill. The 

regulations governing the FFP are found at 7 CFR 

Part 1435, Subpart E (78 FR 45441, July 29, 2013).

BACKGROUND

Sugar beet and sugarcane processors can obtain 

loans from the USDA Commodity Credit 

Corporation (CCC) on their sugar production 

with maturities of up to nine months from when 

the sugarcane or sugar beet harvest begins. These 

loans, called marketing assistance loans, provide 

sugar producers with interim financing at harvest 

time to meet cash flow needs throughout the year 

without having to sell their commodity when 

market prices are typically at harvest-time lows. 

Storing the commodity in the interim also allows 

for more orderly marketing of the commodity 

throughout the year.

Upon loan maturity, the sugar processor may repay 

the loan in full or forfeit the collateral (sugar) to 

USDA to satisfy the loan. Giving CCC title to 

the loan collateral is known as a “forfeiture” of 

collateral. Thus, sugar producers always have the 

opportunity to receive at least the loan proceeds 

from their crop, which becomes a price floor on the 

returns to domestic sugar producers.

The 2014 Farm Bill requires that CCC avoid, to the 

extent practicable, the federal costs associated with 

sugar loan collateral forfeitures, including storage 

costs. The federal Sugar Loan Program minimizes 

forfeiture expenditures by limiting domestic supply 

to keep sugar prices above the price support floor 

created by the Sugar Loan Program. Domestic 

supply is controlled several ways: through the 

Sugar Marketing Allotment Program, which limits 

the quantity of sugar that domestic sugar beet and 

sugarcane processors can market; through the sugar 

tariff rate quotas, which allow a certain quantity of 

sugar to be imported at a lower tariff rate; through 

the FFP; and through other USDA authorities.

If USDA is faced with the likelihood of loan 

forfeitures, it is required to purchase surplus 

sugar and sell it to bioenergy producers to reduce 

the surplus in the food use market. If forfeitures 

do occur, the Secretary can dispose of the sugar 

inventory by a sale to bioenergy producers, by 

transfer to sugarcane and sugar beet processors 

under a payment-in-kind program, by the buyback 

of certificates of quota eligibility or by any means 

permitted for CCC-owned sugar before the 2014 

Farm Bill was enacted. 

FFP GENERAL RULES – SUGAR 

PURCHASERS

CCC must estimate by Sept. 1 the quantity of sugar 

that may be made available under the FFP for the 

following crop year. CCC must also re-estimate 

by Jan. 1, April 1 and July 1 the quantity of sugar 

that will be made available for purchase and sale 

under the FFP for the crop year. Under the FFP, 

the purchased or forfeited CCC sugar can be used 

for the production of bioenergy products, such as 

ethanol. The terms and conditions of any particular 

sugar purchase or sale under the FFP may change, 

and any changes in program administration will 

be included in the invitation announcing the sugar 

purchase or sale.

ELIGIBLE SUGAR TO BE PURCHASED 

BY CCC

CCC will only purchase raw sugar, refined sugar 

or in-process sugar for the FFP that is eligible to 

be held as collateral under the CCC Sugar Loan 

Program. That means that the sugar must be a 

product of the United States.

• Eligible sugar seller--The sugar seller must be 

located in the United States.
FACT SHEET

FFP for Sugar October 2017

• Eligible sugar buyer--An eligible sugar buyer/

bioenergy producer must produce bioenergy 

products, including fuel grade ethanol or other 

biofuels.

COMPETITIVE PROCEDURES

CCC will generally issue tenders for bids before 

entering into contracts with any eligible sugar 

seller or buyer. The intent is to select the bid(s) that 

represents the least cost to CCC of removing sugar 

from the market.

MISCELLANEOUS

As a sugar buyer, a bioenergy producer must take 

possession of the sugar no more than 30 days 

from the date of CCC’s purchase. Each bioenergy 

producer that purchases sugar through the FFP 

must provide proof as specified by CCC that the 

sugar has been used in the bioenergy factory for the 

production of bioenergy. The producer must permit 

access for USDA to verify compliance.

FOR MORE INFORMATION

This fact sheet is for informational purposes only; 

other restrictions may apply. For more information, 

visit www.fsa.usda.gov/pricesupport or contact 

Sheree Pryor, FSA/USDA, telephone 

(202) 720-3774.

_________________________________________

In accordance with Federal civil rights law and U.S. Department of Agriculture (USDA) civil rights regulations and policies, 

the USDA, its Agencies, offices, and employees, and institutions 

participating in or administering USDA programs are prohibited 

from discriminating based on race, color, national origin, religion, 

sex, gender identity (including gender expression), sexual orientation, disability, age, marital status, family/parental status, income 

derived from a public assistance program, political beliefs, or reprisal or retaliation for prior civil rights activity, in any program 

or activity conducted or funded by USDA (not all bases apply to 

all programs). Remedies and complaint filing deadlines vary by 

program or incident.

Persons with disabilities who require alternative means of communication for program information (e.g., Braille, large print, 

audiotape, American Sign Language, etc.) should contact the 

responsible Agency or USDA’s TARGET Center at (202) 720-2600 

(voice and TTY) or contact USDA through the Federal Relay 

Service at (800) 877-8339. Additionally, program information may 

be made available in languages other than English.

To file a program discrimination complaint, complete the USDA 

Program Discrimination Complaint Form, AD-3027, found online 

at http://www.ascr.usda.gov/complaint_filing_cust.html and at any 

USDA office or write a letter addressed to USDA and provide in 

the letter all of the information requested in the form. To request 

a copy of the complaint form, call (866) 632-9992. Submit your 

completed form or letter to USDA by:

1) mail: U.S. Department of Agriculture Office of the Assistant

 Secretary for Civil Rights 1400 Independence Avenue, SW

 Washington, D.C. 20250-9410;

2) fax: (202) 690-7442; or

3) email: program.intake@usda.gov.

USDA is an equal opportunity provider, employer, and lender.

Page 2