British Sugar makes cash for contract tonnage offer

SUGAR BEET growers must choose whether to accept a cash offer from British Sugar to buy back contract tonnage this week, or wait for unknown EU compensation after sugar sector reforms in 2006.

British Sugar launched its permanent transfer scheme this week in an effort to correct the imbalance in the tonnage it contracts to producers and that needed to meet UK sugar quota. The deadline for applications is Friday, Feb 4.

Agricultural communications manager Paul Bee said better-yielding varieties and fewer impurities meant British Sugar needed to re-claim 160,000t, or about 2%, of national contract tonnage.

“We would have preferred to take this step earlier, but we have only learned now that this will be another campaign with no shortfall in production, so we had to make a relatively quick decision.” Payments to growers more than 60 miles from a processing factory would be worth 30/t, and 24/t for half that distance.

One Cambs farmer, who preferred not to be named, told farmers weekly the news had been well received among neighbouring growers. “I think it likely British Sugar’s offer will be over-subscribed.”

While the scheme appeared attractive at first, he said, there were reasons to be cautious. “Speaking for myself, I don”t like the short deadline to enter the scheme. At these rates, the deal will be worth around 20,000 to us, but is there another compensation package coming from Brussels?”

A lot depended on the reference year chosen for area payments after the 2006 reforms, he said. “If 2005 is chosen as the reference year, any quota we give up now will not be considered.”

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