Beet growers to gain £4m as BS and NFU settle
By Philip Clarke
SUGAR beet growers are set to benefit to the tune of £4m a year following a ground-breaking deal between the NFU and British Sugar.
Following four years of sometimes acrimonious negotiations, the two parties have devised a new Inter Professional Agreement (IPA), setting out contract terms between producers and the factories.
The centrepiece is a new payment for crown tare, paying growers for the sugar content of tops. The NFU has long argued that BS has been getting "something for nothing" from this material.
The new IPA will include a formula to covert this into clean adjusted tonnes, so increasing the value of each delivery. "This will be capped at 10% crown per tonne of clean beet, to discourage the delivery of green material," says a joint statement.
The total amount to be paid for crown sugar is estimated at £4m a year, but £1m of this will come from savings on early delivery bonuses, which are being cut from 1% a day to 0.5% a day from Sept 30.
But producers will also receive £1m in the form of increased purity bonuses. This will be allocated on a stepped scale, depending on each growers average amino nitrogen content for the year. Producers in the top 25% purity band will share in 40% of the bonus.
A new sugar content schedule has also been drawn up, to encourage both parties to strive for higher yields. "The current schedule has worked against us," said BS operations director Karl Carter. "Higher sugar content allows us some gain in processing efficiency, but not as much as the extra it costs us."
The new scale will still reward growers, he stresses, following the transfer of another £500,000 from early delivery bonus savings to the sugar content premium.
NFU sugar beet chairman Matt Twidale described the new package as "balanced". "There is something in it for both parties. BS has conceded a bit on crown tare and purity. Weve conceded a bit on the sugar scale and early delivery."
But the reduction in early delivery bonus would at least allow BS to open its factories a week earlier, he added, so reducing the risk for growers. More importantly, the package would get some much needed cash into producers pockets.
The £4m will take the form of additional contract tonnage, with an extra 215,000t allocated for next season. There will also be a retrospective payment of £3.3m, (worth about 48p/t), for this season to go out in May – £3m for crown tare and £300,000 for purity.
BS has also made a commitment to look for an additional £2m a year to pay producers over the next five years. Savings in haulage is one possibility, though the NFU is adamant that transport remains the growers responsibility.
A one-off outgoers scheme is also being set up on a tender basis, to help people leave the industry. The parties plan to find a way of reducing contract tonnage by 40,000t a year to account for increases in sugar yield. *