DEFRA has decided that compensation for lost production, following British Sugar's decision to relinquish 13.5% of its quota under the EU's restructuring scheme, should be split 86% in favour of the grower with 14% going to contractors.

This is in line with British Sugar's original proposal, which was agreed by DEFRA in February, then challenged by DEFRA in March.

The NFU says this means growers will receive in the region of €17/t (£13.60) of beet for 13.5% of their contract entitlement for delivery in each of the three reference years 2006/07, 2007/08 and 2008/09.

As such, a grower that held the same tonnage throughout that period will receive €51/t (£40.80) for 13.5% of their tonnage - subject to exchange rate changes.

NFU sugar board chairman William Martin said: "The application process in the UK has taken longer than most others across Europe, but we are relieved that all the pieces of the jigsaw are finally in place.

"We will soon be in discussions with the Rural Payments Agency on the logistics of the compensation payments, and will be ensuring the scheme is run as simply as possible to avoid any further delays or confusion.

"It is important that growers remember that the compensation payments will be made in two stages - the first in June 2009 and the second in February 2010."

NFU chief sugar beet adviser Helen Kirkman said the decision was long overdue, but at least it was the right outcome. The NFU would be dropping its legal challenge against DEFRA over the issue.