The United States Farm Security and Rural Investment Act of 2002: Implications for CARICOM Sugar Producers

Trading Issues: Future of Export Agriculture — Traditional and Non-traditional Although the final version of the 2002 US Farm Bill, dubbed, The Farm Security Act of 2001, has not yet been agreed upon, on the basis of the versions submitted by the US House of Senate there are likely to be major changes to the US sugar program that will undoubtedly impact the Caribbean sugar producers. Such changes are aimed at bolstering the ailing US sugar program that is proving to be both difficult and expensive to administer in a manner that continues to provide stability to the US growers at minimum cost to the government treasury. Expanding domestic production, increasing imports and international commitments under the WTO and NAFTA have within recent years severely weakened the effectiveness of the Program and have wreaked havoc in the industry. Among the changes proposed are the following: (a) increasing the minimum level of sugar imports from 1.13 million metric tons (MMT) to 1.38; (b) providing the US Secretary of Agriculture with the discretion to adjust the loan rates; (c) requiring that the program be administered at no net cost to the Federal government; and (d) reinstating the marketing allotment for domestically grown sugar. With the use of a modified version of a World Sugar Policy Simulation Model the impacts of these likely changes on US domestic consumption and production of sugar are analyzed and implications drawn fro the CARICON-US sugar quota holders.