5 June 1998

BS transport plans worry growers and hauliers

Transport, a significant issue

in the renegotiation of the

Inter-Professional Agreement

(IPA) between the NFU and British Sugar, is causing

concern among many

growers and hauliers, reports

Norfolk farmer Marie Skinner

CURRENTLY growers are responsible for delivering their sugar beet to the factory using farm transport or paying a haulier.

New British Sugar proposals would end this system. Transport control would pass from grower to processor. Beet would have to be delivered on haulage directly-hired, organised and paid for by BS.

Beet transport costs are covered by a specific EU Regulation (206/68). For the UK (and other later EU entrants) this requires processors and growers to share costs. The amount each pays is not defined and must be determined by local negotiation. In the UK, the contract obliges BS to pay growers an allowance which they use to settle transport bills.

Over the years the allowance has fallen as higher sugar content beet and increasing rates of sugar extraction mean less beet is needed to produce a given amount of sugar.

Consequently growers appear to lose out as "unused" transport allowance of several £m is kept by BS. But under the regulations terms and existing IPA the company meets all its obligations.

BS proposes to make transport arrangements more efficient, reducing costs and saving money for growers. The idea is based on centralised co-ordination, moving to 25t lorries, farm and factory turn-round times of 20 min and a 5.5-day week delivery.

The firm believes changes would lower overall haulage charges, and cut £5m from the bill. 50% of the predicted savings would be passed on to growers.

NFU view

Matt Twidale, chairman of the NFU Sugar Beet Committee, is concerned that the saving to growers would not be guaranteed. Any rise in haulage costs after the scheme is introduced would be deducted from the "extra" money promised to growers, he says. "By agreeing to it, growers will lose flexibility and freedom to plan their own haulage, but still carry the risk of lower returns if transport costs rise."

He is not convinced the scheme will give growers a real financial advantage, especially as a third of the crop is hauled by growers themselves and many farm lorries would become unviable if contracts for carting beet were lost.

The present system works well and efficiently and has caused no complaints, he points out.

"Growers will move to larger vehicles and make improvements to transport, but they will do it themselves when it makes commercial sense. Regimenting the national contract would remove their right to manage their businesses in their own way."

British Sugar view

Clive Francis, BS deputy managing director, accepts the original proposals were unpopular with the NFU, growers and hauliers, and offer some amendments.

First, changes would be introduced over five years, giving growers and hauliers time to make full use of current plant and equipment. Second, he assures the NFU that the guaranteed payments will represent a real rise in growers income.

"Reorganising transport provides an important opportunity to increase the value to growers of a new IPA," insists Mr Francis. &#42

Proposed changes to sugar beet transport are controversial. British Sugar insists they will offer growers savings. But others are less sure and foresee practical problems.

TRANSPORT DEBATE

&#8226 Part of IPA renegotiations.

&#8226 BS cost saving proposals.

&#8226 Half savings to growers.

&#8226 NFU unconvinced.