Agriculture Secretary Bob Bergland has been urged to help financially strapped U.S. sugar producers by restricting imports and imposing price supports for the first time - all to raise sugar prices.
Sources said a departmental study recommends that the administration seek a price of 13 to 14 cents a pound for raw sugar, which was selling at 10.66 cents a pound yesterday. One industry estimate holds that each penny-a-pound increase costs American consumers $225 million a year.
An initial - and less costly - proposal, the direct payment of federal subsidies to growers, was rejected by the Office of Management and Budget at a time when the President has expressed a goal of balancing the federal budget in his first term, one source said.
Bergland can modify the recommendations before sending them to the White House, but they are close to his previous statement on reducing sugar imports and within a penny of what he sought for supports in Congress last year. A former House member, Bergland represented a district that lies in the Red River sugarbeet growing region of Minnesota.
For the past year, sugar has been selling at prices below the estimated average cost of producing it - 15 cents a pound in the United States. That severe deflation of the sugar market followed the heady days of 1974 when demand far outstripped supplies and prices rose to record levels and then dropped, but remained high, in 1975.
Unfortunately for producers, the 40-year-old Sugar Act expired in 1974 and Congress refused to extend it at a time of record high prices. The act provided for sugar import quotas to maintain domestic market prices above the worldwide levels. The rationale was that while consumers paid more, they were assured of a supply of sugar.
The proposal sent to Bergland now recommends a level of 4.2 million tons of imported sugar. About 4.5 million tons were imported last year. The import reductions, with a price support level of 13 to 14 cents a pound, is designed to raise sugar producers' receipts.
It would be the first time price supports have been used for sugar. Both the import restrictions and the support levels could be ordered under existing laws.
Some civil rights and labor groups, however, may try to force the issue to Capitol Hill, where they hope to add minimum wage provisions for sugar field workers, who lost protection when the Sugar Act expired and lower farm labor wage rates took effect. Many workers actually saw their hourly pay rate drop.
In a telegram yesterday to Bergland, the Leadership Conference on Civil Rights said: "We believe the nation would consider it absolutely shocking if you granted millions in new subsidies and quota restriction benefits to the growers and the industry while leaving the workers in penury and helplessness."
Conference Chairman Clarence M. Mitchell Jr. said that while growers and industry made "obscene profits" in 1974 and 1975, field workers labored on without a share of the new bounty.
Mitchell said his organization, composed of 135 civil rights, labor and other groups, will oppose any sugar aid if field workers are not included.
The import quotas and price supports are also opposed by refiners and most users, who say that high sugar prices make sugar substitutes - primarily corn syrup - more competitive.