Monday, July 15, 2019

Truce signed in sugar beet war

February 15, 2010 by  
Filed under News & Business, Crops


Farm leaders and British Sugar have signed a four-year truce in their dispute over sugar beet prices.

The deal will see quota sugar beet prices determined annually by a mechanism developed by independent agricultural consultants.

The agreement, which will be in place this summer for crops sown in 2011, follows intensive talks between the NFU and the processing giant.

The four-year framework was announced on Saturday (13 February).

Under the agreement, a guaranteed price will be issued before contracting starts on or before 30 June 2010.

Prices in subsequent years will be determined by the same mechanism.

NFU sugar board chairman William Martin said the deal would mean less adversarial relationships between growers and British Sugar and a framework to improve the competitiveness of the sector.

It would also lead to greater certainty, said Mr Martin.

“We believe it is the most progressive sugar beet agreement to be found anywhere in Europe, and is at the leading edge for any agricultural product.”

In effect, the mechanism transfers exposure to volatile variable costs from growers to British Sugar.

The beet price will be calculated using four components – production costs, overheads and margins, currency fluctuations and a wheat related bonus.

A fertiliser price increase of £3/t of beet between seasons, for example, will now be reflected in full in the beet price paid to growers.

Only beet required for quota sugar is covered by the price mechanism.

But the deal also covers beet contracting, whole beet sampling, transport arrangements, an out-goers scheme and funding for research.

On transport, the £1 additional allowance will remain available in 2011/12.

But it is likely to be replaced within four years by a system where British Sugar either arranges for cleaning, loading and delivery or pays the equivalent amount to growers.

Meanwhile, the contracting process will be accelerated.

The aim is to benefit the whole sector by requiring British Sugar to issue a form of offer and the agreed beet price to every grower entitled to contracted tonnage on or before 30 June.

Individual growers will then have until 31 July to complete and return their growers offer direct to British Sugar.

The processor will then confirm the agreed tonnage and fixed price for contracted tonnage in a binding contract.

Karl Carter, British Sugar technology director said the partnership agreement represented a firm platform for everyone involved ahead of the next round of sugar regime reforms, which are due in 2015.

British Sugar has also agreed to invest up to £7m in an outgoers scheme for growers who wish surrender their contract entitlements.

Details of the scheme, which would be voluntary, have still to be finalised.

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