A frost insurance scheme is being introduced to protect sugar beet growers from crop losses during extreme weather events.
The NFU aims to introduce the scheme for the 2012/13 campaign to protect growers against the loss of a proportion of their crop in situations of severe frost, as experienced in the disastrous 2010/11 campaign.
The safety net will ensure growers do not have to bear the total cost arising from failing to deliver beet to British Sugar’s factories in case of extreme early frost.
The NFU will issue full details of the scheme, which has an annual cap of £15m, in due course.
For this campaign, growers will be invoiced the surcharge. But in future years, British Sugar and the NFU will incorporate the cost of the insurance within the beet pricing mechanism – and the 2013/14 beet price reflects this.
Robert Law, NFU Sugar vice chairman, said: “The frost insurance scheme will cover 2012 and if certain weather events happen around the turn of the year, growers will be covered.
“People will be able to recover 50% of the costs of contracted beet that they cannot deliver to the factories. But it’s still in everyone’s best interests to deliver the crop where they possibly can.”
At Cereals, British Sugar and NFU announced that beet growers have been offered a contract tonnage beet price of £26.51/t for 2013/14.
The price has been fixed using the beet price mechanism, reflecting increased growing cost, the forward cereals prices for 2013 and the weaker £/€ exchange rate.
“If the currency had been the same as last year (€1=88p), we would have been on £28.50/t,” said Mr Law.
“If the costs had stayed the same, we would have been right down at £25.20/t. But the increased costs have added another £1.30/t, up to £26.51/t.”
The industrial contract price, for out-of-quota uses such as bio-fuel, is available in 2013/14 at a fixed £25.51/t.
The price for surplus beet in 2013/14 will not be less than £20/t of adjusted beet.
Meanwhile, British Sugar and the NFU have agreed to introduce new “formula-based” Late Delivery Allowance (LDA) payments for the 2013/14 crop onwards.
This will pay 50% more than historic yield losses caused by storage between 8 January to 28 February, and in a “ground-breaking” agreement, 100% more from 1 March onwards.
Future payments will be based on new research trials, to be conducted by the British Beet Research Organisation (BBRO), to measure sugar losses during beet storage. Historically, these are 0.13% yield a day, stored.
All LDA payments will be based on the UK beet price, rather than the EU’s minimum beet price. At current prices this is an extra payment of about 30%.
Colm McKay, British Sugar’s agriculture director, said: “We have addressed grower concerns over the length of campaigns via our enhanced LDA payments, which will more than cover the losses experienced in a well-managed clamp.”
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