UK: EU sugar regime reform inquiry hears three asks from NFU Sugar

National Farmer’ Union (NFU) Sugar Board chairman William Martin has called for help to protect British growers in the light of EU sugar reforms.

Mr Martin gave evidence to the House of Lords Agriculture, Fisheries, Environment and Energy EU Sub-Committee on Wednesday as part of its follow up inquiry to the EU sugar regime reform. The European Commission’s current proposals to reform the CAP mean that much of the existing EU sugar regime will lapse, including the end of sugar quotas and a potential erosion of growers’ rights from 2015. These proposals are now subject to negotiation in Brussels.

During the evidence session, Mr Martin asked for three key ingredients to cushion the end of the EU’s sugar regime: The continuation of the inter-professional agreement with no erosion of growers’ rights, an extension of sugar quota through to 2020 and effective use of the powers held by European Commission to better manage the internal market.

“The 3,500 sugar beet growers in England have only one customer; British Sugar,” he said. “Clearly there is an imbalance in market power in our supply chain but thankfully the current EU rules allow growers to overcome that imbalance through the existence of inter-professional agreements. This agreement includes the ability for the NFU to collectively negotiate on behalf of sugar beet growers. Unfortunately the Commission’s proposals put these vital powers at risk.

“British Sugar and the NFU have created a genuinely positive relationship through the existence of our IPA. It’s a top class agreement that extends benefits far beyond the ability to collectively negotiate the price of sugar beet. It creates the right collaborative framework to drive the industry forward and the stability both sides of our industry need to make long term investments.

“The UK beet industry is rightly proud of its performance. It is one of the most efficient sugar industries in the EU sugar sector and I have no doubt, given the right framework for long term investment and a period of policy stability, that the outlook for our industry is bullish. But we are not there yet.

“Radical reform of the EU’s sugar regime in 2006 to remove inefficient producers didn’t work and in 2008 we were forced to accept the closure of one of England’s highly efficient sugar beet factories. That factory has gone, but stability through to 2020 will give British Sugar opportunities to invest in existing processing facilities and for growers to continue to make in-field efficiency gains. Our target is to increase productivity by four per cent per annum and while I have no doubt that this is a tough target, it’s worth aiming for if we are to be globally competitive by 2020.

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“At the time of the last reform no-one, including the European Commission, could predict the events that unfolded on the global market. The EU went from being the world’s second largest exporter of sugar, to a significant importer within the space of three years. There have been recent supply difficulties in some areas, but the EU balance sheets suggest that we have increasing sugar stocks, so the market is not short. Therefore my third request is for the European Commission to manage the internal market more effectively, by deploying the tools it has available in a more timely and more efficient manner.”