Sugar beet growers get extra year to deal with reform

SUGAR beet growers will be given an extra year to accommodate the impact of reform, if yet another leaked document is to be believed.

Details which emerged at the Cereals Event 2005 suggest the previously announced price cuts will take place over three years – not two – starting with the 2006/07 crop.

Commenting on the leak, NFU sugar beet chairman Mike Blacker said the development was better news for growers. “We would appear to be looking at a longer transition to arrive at the final price cut, whatever that ends up being,” he said.

But he remained concerned by the level of price cuts being proposed. The new details suggest a beet price cut of 24% for 2006/07, a further 10% for 2007/08, with the remainder in 2008/09.

The leaked document also suggests the levy on growers to fund an industry restructuring scheme will be charged over three, rather than two years.

The scheme is designed to pay inefficient processors to shut down factories and hand back quota.

“From one point of view, the extra year is good news,” said NFU sugar adviser Helen Kirkman. “It gives us a better chance of killing off the EU quota we need to, to sort out the structural surplus.”

But while the NFU is supportive of the principle of restructuring scheme, British Sugar is indicating it does not want to participate.

It is looking to expand. “We believe we are the lowest cost producer in Europe,” the company’s Karl Carter said. “If there’s going to be a survivor it will be the UK.”

That could leave UK growers paying the EU restructuring levy but receiving no benefit, a situation which worries the NFU.

“Our concern is that there is no incentive for growers – they get no share of the compensation paid to processors,” said Ms Kirkman. “We would not be happy with a position where there’s a restructuring scheme that is not going to deliver any benefits to UK growers.”

There is an indication in the leak of the likely share-out of the 1m tonnes of C quota which processors can buy back and “convert” into and A & B quota. France with over 351,000t looks set to be allocated the most. The UK is in fourth place with 83,000t, behind Germany and Poland.

Formal proposals from the European Commission on sugar reform are not expected until 22 June.

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