New contract agreed after sugar reforms

A NEW contract agreed between British Sugar and the National Farmers' Union will provide a platform on which to build a competitive and profitable UK sugar industry, the NFU's lead negotiator said yesterday.

A NEW contract agreed between British Sugar and the National Farmers' Union will provide a platform on which to build a competitive and profitable UK sugar industry, the NFU's lead negotiator said yesterday.

The three-year inter-professional agreement (IPA) is the result of several months of intensive discussions following reform of the European Union sugar regime which included a significant cut in guaranteed prices for beet growers.

Besides pricing and payment terms, the agreement includes a range of options for growers affected by British Sugar's decision to close two factories, in Shropshire and Yorkshire, including compensation for relinquishing contracted tonnage which would then become available to other growers.

John Hoyles, chairman of the NFU's sugar board, who farms near Wisbech, said: “The backdrop to these negotiations was the radical price cuts agreed as part of EU sugar reform. The NFU's approach to negotiating the new contract has therefore been equally radical.


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“The result is a simpler and totally flexible contract offering tangible improvements and more transparency. An added dimension to our negotiations has been the need to address implications of British Sugar's decision to close Allscott and York factories.

“As a result a range of options have been agreed borne out of discussions with affected grower 'focus groups'. We have negotiated better terms than are on offer elsewhere in the EU and have achieved a menu of options which include compensation from the processor and freedom to trade contracted tonnage.

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“Overall this deal forms a platform on which we can build a competitive, profitable British sugar industry for the future.”

The NFU negotiating team and advisers will be holding meetings around the country over the next two weeks to present the new contract in more detail and explain all the options available under the restructuring scheme.

Venues and dates include the East of England Showground, Peterborough on Friday, August 18; the Marriott Sprowston Manor Hotel, near Norwich, on Monday, August 21; the Courtyard by Marriot Hotel, Ipswich, on Tuesday, August 22; and the NFU Regional Office in Newmarket on Wednesday, August 23.

Each of the meetings will run from 8am to 10am, with tea and coffee on arrival. Those planning to attend are asked to call the NFU regional office on 01638 672100 or email east.anglia@nfuonline.com .

Richard Means, farming consultant at Strutt & Parker, said growers should now carefully evaluate the position of sugar beet within their rotations an consider collaboration with neighbours to improve efficiency.

“Sugar beet should be considered a specialist crop and a combination of maximising yields and making the most of economies of scale will be the best way of deriving a profit from the crop,” he said. “Co-ordinated growing will reduce costs of harvesting and haulage, improve efficiencies and concentrate management expertise.”

And Mr Means added: “With an estimated 1.3 million tonnes of quota being made available through the restructuring and British Sugar's commitment to purchase a further 500,000 tonnes from the EU, there is the potential for growers and grower groups to expand their quota.

“Improvements in varieties and agronomic techniques over recent years have seen higher yields and in combination with the recent quota cuts, this has reduced the area of land committed to beet. UK growers will have the opportunity to take on quota in order to maximise their farm gross margins.”

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