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Wednesday, March 21, 1979
Full Committee
Business Meeting

Sugar and Sweetener Policy
H.R. 2172 and related bills

Attached is a memorandum describing the effect of the Bedell amendment. Discussion occurred and without objection the Bedell amendment was withdrawn.

Discussion continued and Mrs. Heckler moved to amend the Glickman amendment to include "forest products" after the words "derived therefrom" and before the phrase "or any other commodities covered under the Act". Chairman Foley suggested that she propose "all agricultural and forestry products". Mrs. Heckler had no objection and the Chairman suggested language reading "from sugar, sugar beets, and any by-product of corn or commodities covered under this Act, or other commodities of an agricultural or forestry nature".

Discussion continued and Mr. Kelly offered a substitute amendment to use the language of the Glickman amendment but to strike the words "covered under the Act".

Discussion occurred and by a voice vote the Heckler amendment to the Glickman amendment was not agreed to. By a voice vote the Kelly substitute amendment to the Glickman amendment was not approved. The question occurred on the Glickman amendment and by a show of hands vote of 13 yeas-6 nays the amendment was agreed to. Mr. Kelly requested a recorded vote and 6 Members sustained the request. The vote follows:

Thus, by a roll call vote of 27 yeas-7 nays the Glickman amendment was approved. Mr. Grassley was not present at the time the vote was taken, but his unanimous consent request during the meeting was agreed to.

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Wednesday, March 21, 1979
Full Committee
Business Meeting

Sugar and Sweetener Policy
H.R. 2172 and related bills

Mr. de la Garza offered the attached amendment in an attempt to strike a compromise relative to the price objective and to the labor provisions. Discussion occurred on the amendment. Staff was directed to prepare a brief analysis of the de la Garza amendment for consideration at the next meeting.

Mr. Harkin asked unanimous consent that his vote be recorded as "no" on the Johnson amendment (see vote of March 20). The Chairman stated that he had Mr. Harkin's proxy at that time but was not sure how it should have been voted. There was no objection to the Harkin request.

At 11:58 a.m. the meeting was adjourned to reconvene at 10:00 a.m. on Thursday, March 22, for further consideration of pending sugar legislation.

གྱི་ཆཆ9ཟློགཐོ་རྟཅིན

Glenda Temple

47-987 0

GLICKMAN AMENDMENT

March 21, 1979

Sec. 407. Loan Guarantees for Construction, Conversion, or Modification of Facilities for Industrial Hydrocarbon and Alcohols Production.

The Commodity Credit Corporation is authorized to provide loan guarantees for construction, conversion, or modification of facilities for the

production and marketing of industrial hydrocarbons and alcohols

derived at least in part from sugarcane, sugar beets, or any by-product

derived therefrom, corn or any by-product derived therefrom, or any other covered under the Act,

commodities from a guarantee fund of up to $25 million, but not to

exceed the amount of special import duties collected, under authority of the Act, in each of the two fiscal years beginning October 1, 1979.

I plan to offer an amendment to the International Sugar Stabilization
Act this week that would give the Secretary of Agriculture an additional
option for disposal of sugar that is already, or may be in the future,
under CCC ownership. Many observers of the near- to mid-term sugar market
project that the chances are that the government will never recover the
full market value for the sugar which it has under its control due to
the tremendous supply/demand imbalance, and that the government may very
well end up disposing of its stocks by making it available for cattle feed.
From a budgetary perspective alone, I believe that we should consider any
other possible end uses that could be reasonably exploited.

Specifically, my amendment would direct the Secretary to make an assessment
of the likelihood that the sugar stocks under his control can be disposed
of at a price reasonably near the acquisition cost to the government. (This
assessment should also take into account estimates of the storage costs
that would be involved in holding the sugar for extended periods of time.)
If this assessment were to conclude that the government would likely take
a substantial loss by holding the stocks and attempting to find what are
now regarded as traditional outletes for them, the Secretary is empowered.
to earmark the sugar specifically as feedstocks for alcohol fuels production
and negotiate with the operators of domestic alcohol fuels facilities for
the processing of the sugar into fuel grade alcohol. The language would
allow the Secretary a great deal of latitude in determining the terms and
method of implementation of such an arrangement. For instance, he could
contract for the processing of the sugar with a production facility by
calling for a mutually agreed upon price per gallon, with the payment being
made either in the form of an equivalent amount of alcohol or direct
payment. The Secretary could also either take the alcohol over for direct
sale by the government, or he could choose to arrange for the processor to
handle the marketing. The important thing about the amendment is that it
opens up a new, but very significant outlet, for surplus sugar.

On the following page is a fact sheet that attempts to outline what some
of the effects of the amendment might be.

Obviously, the price received for a pound of sugar used as feedstock in alcohol production is less than what could be received for that sugar if the full market value (artificially derived) could be received for it. (Alcohol fuels price: $225/ton; 15¢ market value price: $300/ton.) However, several factors must be taken into account. First, it is unlikely that the market value price will ever be received for the sugar now under government control. Second, storage costs would be negated if the sugar were processed into alcohol. Third, alcohol as a fuel extender would serve a very useful purpose in light of the current gasoline squeeze, and there should be a premium coefficient built into these cost figures to account for the displacement of imports that would result, however small.

I believe that the amendment is worthy of support. It does nothing more than to give the Secretary the authority to pursue the application of government-owned sugar to a valuable end use--that of fuel alcohol-if he determines that the traditional outlets for the sugar would not allow the government to recoup its acquisition costs. It does this by giving the authority to the Secretary to release sugar stocks at prices below the mandated release level-if the stocks are intended for use as feedstocks for alcohol fuels: