The administration's sugar subsidy plan, designed to help the nation's hard-pressed sugar farmers, could also result in millions of dollars in income for large sugar processing and milling companies.
That point is being brought home by a group opposing sugar subsidies, the Corn Refiners Association, who have estimated that the H. L. Hunt family's Great Western Sugar Co. could receive some $10 million if sugar prices remain below specified levels and the government makes the maximum subsidy payments the President has proposed.
Another large sugar beet processor, Holly Sugar Corp., could get about $9 million, according to the corn refiners, who produce a sweet syrup that can replace sugar in many uses.
The sugar subsidy plan calls for a maximum 2-cents-a-pound payment when sugar prices fall below 13.5 cents a pound. But officials have concluded there is no legal or practical way to make the subsidy payments directly to farmers and that instead they must, as one source put it, "send a small number of large checks" to millers and processors for distribution to growers.
The Agriculture Department has been trying to determine what strings it can attach to those payments to control the distribution of money to farmers.
One apparently favored device would require millers and processors to share the payment in accordance with their traditional contracts with growers. That, generally, would mean about 62 to 53 per cent to farmers with 37 to 38 per cent kept by millers and processors.
With maximum federal payments estimated at about $240 million, that ratio would leave some $89 million for processors and millers. (Sugar processors turn sugar beets into finished sugar; millers turn cane into raw sugar and sell it to refiners, who produce finished sugar.)
"That's one option," said Agriculture's Howard Hjort of this distribution plan. However, "the actual fact is that that question (of redistribution) has not been resolved."
The department hopes to have a complete set of regulations for the subsidy plan drawn up by Monday for publication in the Federal Register the next day. There would then eb a period in which the department would receive public reaction.
The corn refiners group used the normal 37-38 per cent share and maximum possible payments in computing the value of the subsidies kept by millers and processors. The administration's plan calls for subsidies to make up the difference between actual selling prices and 13.5 cents a pound; however, the payment would not exceed 2 cents regardless of how low prices go.
Farmers have not been alone in feeling the impact of months of depressed sugar prices following the huge price runup of 1974 and 1975. Processors and millers have suffered, too; four sugar beet processing plants have been closed in recent months because of losses, throwing whole farming communities into economic dislocation.
Thus farmers have an interest in seeing profitable milling and processing facilities. Too, some facilities are cooperatives owned by the farmers who use them.
On the other hand, U.S. Sugar Corp. in Florida grows 85 per cent of the 300,000 tons of sugar it mills from cane. Therefore, it would stand to keep almost all of the roughly $11 million payment it could get under the subsidy program.