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2003 Hurricane Assistance Program for Louisiana's Sugarcane Producers and Sugarcane Processors

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Commodity Credit Corporation, USDA.




The Commodity Credit Corporation (CCC) is issuing this Notice to implement section 207 of the Agricultural Assistance Act of 2003. This Act requires CCC to provide compensation to Louisiana sugarcane producers and processors who suffered economic losses from the cumulative effects of Tropical Storm Isadore, Hurricane Lili, and excessive rains in October 2002. CCC will make payments to affected sugarcane processors. The processors shall then disburse payments to affected producers from the payments they receive in a manner reflecting current contracts between the two parties. This Notice provides eligibility criteria and application procedures that will be used to conduct this program.


The dates applicable to the 2003 Hurricane Assistance Program are as follows:

(1) Eligible producers have until August 18, 2003, to select a base year other than 1999 for the purpose of calculating their 2002-crop sugar loss.

(2) Farm operators have until September 2, 2003, to certify ownership tract sugar losses on their farms.

(3) Sugarcane processor applications must be submitted after September 4, 2003 but no later than September 22, 2003.

(4) Payments will be issued to applicants meeting all eligibility requirements beginning October 8, 2003, or as the Louisiana Farm Service Agency (FSA) State Executive Director determines.

(5) Producers must be paid within 30 days of the date the initial payments were made to the applicants.

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Barbara Fecso, Dairy and Sweeteners Group, USDA/FSA/EPAS, 1400 Independence Ave., SW., STOP 0516, Washington, DC 20250-0516; telephone (202) 720-4146; facsimile (202) 690-1480; electronic mail:

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Environmental Compliance

A review for the need of an environmental assessment was completed to consider this action's potential impacts on the human environment in accordance with the provisions of the National Environmental Policy Act of 1969 (NEPA), 42 U.S.C. 4321 et seq., regulations of the Council on Environmental Quality (40 CFR parts 1500-1508), and FSA's regulations for NEPA compliance, 7 CFR part 799. It was determined that this program will have slight to no significant impact on the quality of the human environment. Therefore, these actions are categorically excluded from compliance with 7 CFR part 799 and no further review or assessment is necessary. These findings are available for public review upon request.

Paperwork Reduction Act

Section 217(b) of Title II of Division N of the Consolidated Appropriations Resolution, 2003 (Public Law 108-7) (2003 Act) requires that this Notice be promulgated and the programs administered without regard to 44 U.S.C. 35, the Paperwork Reduction Act. Thus, information to be collected from the public to implement this program and the associated burden, in time and money, the information collection will have on the public do not need Office of Management and Budget approval and are not subject to the 60-day public comment period 5 CFR 1320.8(d)(1) requires.


This Notice implements the 2003 Hurricane Assistance Program. Section 207 of the 2003 Act authorizes this program which requires CCC to assist certain processors by providing them payments or commodities from CCC inventory. The law was intended to partially compensate Louisiana sugarcane producers and processors for losses related to the natural disaster declaration resulting from Tropical Storm Isadore, Hurricane Lili, and excessive rains in October 2002. CCC sugar inventory is not available. Thus, this program will be carried out by issuing payments. CCC has resolved other discretionary matters for carrying this program as follows:

Determination of Hurricane Assistance Program Payment Rate Per Pound

On February 20, 2003, the date the 2003 Act was passed, the sugar #14 New York Exchange nearby price for raw sugar was 21.96 cents per pound. Subtracting out the Louisiana average transportation cost per pound of 1.21 cents and Louisiana's average location discount results in a base price of about 20 cents per pound. Thus, CCC will make payments based on 20 cents per pound.

Determination of Loss Eligibility

To be eligible for this program, this notice requires evidence of a tract 2002-crop sugar percentage loss equal or greater than 20 percent. This percent loss, coupled with the estimated 15 percent economic loss due to time and money spent salvaging the sugarcane plants (which are perennials), maintenance to machinery damaged by mud, as well as on field repair and replanting, results in an implicit required loss of 35%. FSA is using the estimate of 15 percent economic loss based on a Louisiana State University study. Louisiana sugarcane processor and producer losses are estimated to be far greater than the amount of assistance the 2003 Act provided. Compensation will then be paid on a portion of losses exceeding this threshold—limited by the amount (150,000 tons or 300,000,000 pounds) provided in the 2003 Act.

2003 Hurricane Assistance Program Operation

I. Applicability

This Notice sets forth terms and conditions under which CCC will make payments to eligible Louisiana sugarcane processors for 2002-crop weather-related sugarcane losses. Start Printed Page 47011

II. Definitions

Commercially Recoverable Sugar (CRS) Final Settlement Payment Pounds. The total actual pounds of 96 sugar degrees the producer delivers to a sugarcane processor during a given crop year.

Farm. The acreage identified under one FSA Farm Serial Number.

Farm Operator. The person in general control of the farming operations on all ownership tracts of a farm during the program.

FSA. FSA means the Farm Service Agency.

Ownership Tract. A subset of the acreage of a farm associated with a separate ownership interest.

Producer. A person (including owners) who receives a payment or shares in the payment a sugarcane processor makes for delivery of sugarcane.

Split-Shippers. Farm operators who deliver their harvested cane to more than one sugarcane processor during a given crop year.

Sugarcane Processor. A person or entity who produces raw cane sugar by commercially processing sugarcane and has an allocation under the sugar marketing allotment program.

III. Applicant Eligibility Requirements

Applicants must meet all the following requirements to be eligible for 2003 Hurricane Assistance Program benefits:

(1) Be a sugarcane processor located in Louisiana.

(2) Be eligible to obtain a loan under section 156(a) of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7272(a)).

(3) Submit the application according to the requirements and deadlines the Notice specifies.

IV. Aggregate Amount of Assistance

Total compensation equals the market value of 150,000 tons or 300 million pounds of CCC sugar. CCC has determined that this value is 20 cents per pound (or $60 million in total). CCC will maintain a 7 percent reserve ($4.2 million) in the event of appeals. The reserve will be dispersed once the appeals process is satisfied.

V. 2002-Crop Sugar Loss

(1) Loss will be measured for each ownership tract by the following formula: Loss = [sugar per acre (base year) - sugar per acre (2002 crop)] × tract acres in 2002.

(2) The base year for figuring losses will be 1999 unless the producer requests a different year (2000 or 2001).

(A) Producers have until August 18, 2003, to select a different base year.

(B) The same base year will be used for all farms with the same operator. If some tracts (cannot be ALL tracts) had no production in the base year, the State yield will be used.

(C) Tracts with production in the base year and no FSA certified acres will require the operator to:

(i) Pick a different base year; or

(ii) Make this tract ineligible for disaster benefits.

(D) Tracts with FSA certified acreage and no production in the base year will require the operator to:

(i) Pick a different base year; or

(ii) Make this tract ineligible for disaster benefits.

(E) Tracts not harvested for sugar or seed will be assigned a zero yield in the base year.

(3) Sugar per acre for each ownership tract is calculated as:

(A) The CRS Final Settlement Payment Pounds from sugarcane processor records for the applicable year divided by

(B) The ownership tract's total cane acres (minus Payment-in-Kind acres) identified in the FSA Certified Acreage Report for the same year.

(4) The 1999 average state yield will be applied to any operator with no production history in 1999, 2000 or 2001 and produces sugarcane in the 2002 crop year.

(5) In the case of split-shippers, total FSA certified acres will be prorated to each mill based on pounds of sugar each mill produced. For mills that did not identify sugar produced by ownership tract at time of delivery, the total production will be prorated to each tract based on total FSA certified acres.

(6) Farm operators have until September 2, 2003, to certify ownership tract sugar losses on their farms.

(7) Applicants must submit a CCC-prescribed form certifying the sugarcane processor's loss calculation to CCC, no earlier than September 4, 2003, and no later than September 22, 2003.

(A) No late-filed applications will be accepted.

(B) All eligible farm operators must certify the loss calculations included in the application.

VI. 2002-Crop Eligible Tract Sugar Losses

(1) Ownership tract sugar losses are eligible if the tract's 2002-crop sugar percentage loss is equal to or greater than 20 percent.

(2) The 2002-crop sugar percentage loss for an FSA ownership tract is defined as: [1 − (sugar per acre (2002 crop) / sugar per acre (base year))] × 100.

The eligible tract sugar losses are defined as follows: 80% of the 2002-crop sugar losses greater than or equal to 40%, plus 60% of the 2002-crop sugar losses greater than or equal to 30% and less than 40%, plus 40% of the 2002-crop sugar losses greater than or equal to 20% and less than 30%.

(4) If the computed total of all 2002-crop eligible tract sugar losses across all eligible sugarcane processors is less than, or exceeds, 300 million pounds, a factor will be applied to make this total exactly 300 million pounds.

VII. Payment Calculation

An applicant's payment will equal the total eligible tract sugar losses for its producers multiplied by 20 cents per pound.

VIII. Payments to Affected Producers

Applicants must share their hurricane assistance payments with affected producers according to the percentage shares for dividing net revenue as stated in their 2002 farm processor/producer contracts. Payments to producers must be made within 30 days of the date initial payments were made to eligible processors.

IX. Contract Liability

All sugarcane processors and associated operators receiving a share of the total hurricane assistance payment are jointly and severally liable for program violations and resulting repayments, if applicable.

X. Misrepresentation, scheme, or device

A person shall be ineligible to receive assistance under this Notice and be subject to such other remedies as law may allow, if the FSA State or county committee, or any other FSA official, determines that such person has:

(1) Adopted a scheme or other device that tends to defeat the purpose of the program operated under this Notice,

(2) Made any fraudulent representation regarding this program, or

(3) Misrepresented any fact affecting a program determination.

XI. Creditor liens and claims; and CCC offsets and withholdings

(1) Any benefit or portion thereof due any person under this program shall be allowed without regard to questions of title under State law and without regard to any claim or lien in favor of any person, except agencies of the U.S. Government.

(2) CCC may offset or withhold any amount due CCC in accordance with the provisions of the regulations at 7 CFR part 1403 or successor regulations as designated by the Department. Start Printed Page 47012

XII. Administration

When circumstances beyond the applicant's control preclude compliance, the county committee may request the Louisiana FSA State Executive Director to grant relief. In such cases, except for statutory requirements, the Louisiana FSA State Executive Director may, in order to more equitably accomplish this Notice's goals, waive or modify deadlines if the failure to meet such deadlines does not adversely affect program operation. All program payments will be subject to review.

XIII. Appeals

Regulations at 7 CFR part 11 apply to this Notice. CCC is not involved in resolving disputes between processors and producers.

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Signed at Washington, DC, on August 1, 2003.

James R. Little,

Executive Vice President, Commodity Credit Corporation.

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[FR Doc. 03-20080 Filed 8-1-03; 4:24 pm]