7 November 1997

BSs contract proposals dismay NFU negotiators

By Philip Clarke

NATIONAL Farmers Union negotiators have responded with surprise and dismay at British Sugars decision to go public with its proposals to reform the beet contract, just days before submitting its own suggestions.

Negotiations between the two sides have been going on for over a year in an attempt to overhaul the so-called Inter Professional Agree-ment. Detailed BS proposals were put to the NFU in the spring and the sugar beet committee has been working on its response ever since.

"The aim is to get an IPA that gets growers and processors facing in the same direction," said chairman, Matt Twidale. "The NFU has been trying to create such an agreement and we are within a week of presenting it. I am disappointed that British Sugar has decided, unilaterally, to go out with its own proposals with a view to influencing the outcome."

In its four-page glossy, sent to over 9000 growers, BS outlines a number of proposed changes to the beet contract. These include:

lA voluntary "outgoers scheme" to allow contract tonnage to be traded.

lThe introduction of about 100,000t of new contracts, (subject to certain conditions).

lAn end to the early delivery bonus system.

lBritish Sugar to assume control of beet haulage.

lA new payment scale for sugar content and a purity bonus.

lAn end to the 30% siphon on tonnage when farms change hands, coupled with a sharpening of the "two years out of three" rule on contract performance.

BS claims these changes will not result in less money to growers (notwithstanding any adverse currency movements), but a "redistribution" to different parts of the contract. For example, savings from a tighter sugar content scale could go towards the purity bonus or the late delivery bonus, said agriculture director, Chris Carter.

The NFU has welcomed the idea of a transfer system for contract tonnage based on a free market tender, something for which it has been pressing for years.

But it has raised strong objections to some of the pre-conditions. For example, in order for the 100,000t of new contract tonnage to be allocated, the NFU has to accept that British Sugar will not have to pay for more A/B beet than is required to meet the national sugar quota (of 1.144m tonnes).

"In essence, they are looking for the right to downsize contracts," said NFU head of arable, Simon Lunnis. "Sometimes, due to high yield, they find they have more A and B beet than is needed to meet quota. They want to be able to downgrade this to C beet, rather than pay the full price. While we are not ruling this out of all negotiations, growers should know the 100,000t is not being offered out of the kindness of their hearts."

The other main gripe is over the issue of top tare. The NFU has long argued that BS is getting "something for nothing" from crown material removed in the tare house.

But in its brochure, British Sugar argues that EU regulations were drawn up in 1968 on the basis of tops being removed. "If taking crown tares had not been part of buying beet when the regulations were introduced, then support prices would have been set at a lower rate. This means there is no free sugar in crown material."

This is strongly contested by the NFU. "To suggest the support price would have been lower is an assumption, not a fact," said Mr Twidale. "Also, when the regulations were drawn up the average extraction achieved was 81%. Today it is into the mid-90s. British Sugar is getting paid the intervention price for crown sugar – so should the grower." &#42

Beet is lifted at Ickleton, Cambs, this week, ahead of heavy rains. But what is the outlook for growers as British Sugar publishes its contract proposals?