24 May 2002

A joint effort is key

to industrys future

The prospect of foreign

competition,

potential

new disease threats

and processing angst

see UK sugar beet

production in danger

of losing its

sweetness.

Andrew Blake opens

this special feature

by asking the

industrys leaders to

chart the way ahead

AFTER the turmoil of beet growing last season it is important that all involved work together to keep the broader picture in mind.

That is the firm message from both Mike Blacker, the NFUs new sugar beet committee chairman, and Karl Carter, British Sugars agricultural and operations director.

Factory stoppages and the dropping of rhizomania controls just as new strains of the disease may be emerging certainly need addressing. But they are relatively minor problems compared with the potential disruption when the EUs current sugar regime is reformed in 2006 and the Everything But Arms trade initiative begins to bite, they say.

Maintaining sugar beet as a key and viable UK arable option is vital, stresses Mr Blacker.

"As a united industry, we must do all we can to avoid a return to the 1970s when we lost 15% of the crop to oilseed rape. It has to be in our interests to consistently meet our national quota."

Half of parent company Associated British Foods profitability comes from British Sugar, and with bio-ethanol opportunities on the horizon, BS is fully committed to the crop, stresses Mr Carter.

The UK has the EUs lowest operating costs and its growers are third in terms of beet output. So everything must be done to defend the nation against quota cuts when the regime is reviewed in 2003, he says. "Its a very profitable industry."

Mr Carter believes there will be little change then – rather a gentle easing of support ahead of EBA obligations. However any quota cuts should be absorbed by less efficient member states, like Italy, Spain and Greece, he argues.

"Maybe Brussels needs to find something like our out-goers scheme to help them."

The big challenge once all tariff barriers disappear in 2009 under EBA will be learning to live with the threat of cheap imports, both men agree.

In the meantime, while EU prices remain relatively high, the EBA initiative is likely to see increasing amounts of competitive sugar coming in from abroad, other than under existing agreements with African, Caribbean and Pacific producers.

Mr Carters biggest concern is that commodity traders rather than the poorer countries the EBA treaty intends to help will be the main beneficiaries.

"A lot of people stand to make a lot of money through carousel trading, and we believe it needs some form of control." Essentially the exercise takes advantage of the differences between EU and world prices, he explains.

"The threats facing our industry are very real," says Mr Blacker. "We really have to start lobbying now to influence the way things develop. For a start other member states already have more than a 20% advantage over us because of the £/k relationship." Every 10p on the value of the k puts another £5/t on the value of UK beet, he calculates.

The importance of sugar beet in the arable rotation, especially for East Anglia which grows about 60% of the crop, cannot be over-emphasised to decision-makers, he adds. "Sugar beet cannot be viewed in isolation." &#42

British Sugar is keen to invest in biofuel given the right government incentive, says Karl Carter.

Battling for a brighter beet future requires UK co-operation, says the NFUs Mike Blacker.

Future fuel

AN EU directive scheduled for 2005, aimed at cutting carbon dioxide emissions, could give beet growing a big boost. But much depends on the UK governments willingness to implement it, believes Mr Carter.

"It will require member states to include 2% bio-fuels in its transport fuels, rising by 0.75%/yr to 2010." In the UK alone that 2% could equate to 2m t of sugar beet, or about a quarter of the current crop, he calculates.

France is already modifying some of its factories specifically for producing bio-ethanol, he notes. The main cloud on the horizon is Brazils huge potentially competing output.

"ABF and British Sugar are definitely prepared to invest in bio-ethanol. But we cant seem to persuade the British government to support its own industry."

Western concern

West midlands beet growers are due for a "culture shock" following closure of Kidderminster factory, according to Mr Blacker. The main result is that they will be faced with longer campaigns.

Combined intake of Kidderminster and Allscott factories was 7500t/day. But even after a £14m modernisation Allscott will still only be able to process 6000t/day.

Mr Carter says he has every sympathy with western growers, but believes the investment is a prime example of the companys commitment to the industrys future.

"The alternative option was to do nothing, wait to see how the EU regime turned out, and possibly end up having no beet growing at all in the west. Growers do have to share some of the pain."

Advice to help store beet correctly to limit losses in the longer campaigns will be readily available, notes business development manager Peter Williams.

Take broader view – new chair

DEVELOPING communication links with the NFUs beet growers to ensure the wider issues affecting them are fully appreciated is a priority for Mike Blacker. "Engaging all growers in the increasing number of key policy areas is key in getting informed debate and co-ordinated lobbying."

Yorks-based Mr Blacker, who served as Matt Twidales vice chairman, took over at the end of the last campaign.

Among his plans are a new emailing service and regular news bulletins to beet-growing members. Last year, NFU Sugar Beet launched its own web-site for sugar beet growers providing forum for discussion on a choice of issues of interest and concern.

He readily acknowledges their frustrations caused by Wissington factorys problems and the NFU continues to seek proper redress for the problems of last campaign.

"As our monopoly buyer there really is no excuse for British Sugar to be allowed to get away with what it did. At the end of the day, it seems that growers are taking all the risks."

In the light of that he hopes to explore contractual changes to the IPA to ensure risk is more fairly balanced within the industry.

"I also want to see some improvement to the payments structure. Cash flow is the life blood of the industry." He believes BSs willingness to modify its seven-week delivery period arrangement during Wissing- tons troubles sets a valuable and welcome precedent.

Mr Blacker says it is worth noting that although BS believes it has found the answer to its filter blockages, the pcc/extra agitation solution still has to be proven in practice. "Well be going into another campaign with something thats untested on a field scale. British Sugar will need to act to rebuild growers confidence in their ability to process the UK crop in a reasonable time window."

Discovery of the new so-called p-strain of rhizomania in Norfolk, which no UK varieties can tolerate, is also worrying.

"It does make me concerned, especially since we have been effectively containing rhizomania for many years under our PZ status that expired at the end of March.

"The new strain is potentially more destructive but little is known about how it behaves in UK conditions."

The industrys future policy on rhizomania is being finalised and is aimed at continued control of the disease by a structured and common sense management strategy agreed by the industry as a whole. Another priority will be to track the new strain and understand much more about it."

&#8226 EU regime & EBA big influences.

&#8226 Joint UK industry effort required.

&#8226 Bio-ethanol fuel prospects.

&#8226 Rhizo & processing local problems.