Sugar cut this year or next: It’s your choice

Sugar beet growers are being given a choice as to whether to plant their normal contracted tonnage this spring and take a cut next year, or wait until Brussels has determined this season’s quota cut and reduce their plantings accordingly.

The situation has arisen because Brussels has said it needs to reduce this year’s sugar output substantially to respect WTO export restraints.

But it has not yet declared what that cut will be.

“This situation, and the accompanying uncertainty, is particularly disappointing when growers have allocated land, applied fertiliser and purchased seed,” says a joint letter to growers from NFU sugar chairman Mike Blacker and British Sugar agriculture director Karl Carter.

“The lack of decision from Brussels adds to the concerns growers already have over price cuts.”

To help growers manage this year’s quota cut, BS has therefore agreed to “block” (put in store) any sugar produced in 2006/07 in proportion to any quota cuts Brussels announces now or later in the season.

This sugar will then be set against next year’s sugar quota, leading to a reduced contracted tonnage for growers in 2007/08.

“This will allow you to reduce your area next season to accommodate the quota reduction then,” says the letter.

Payment will be adjusted accordingly.

This course of action is called Option 1, and if growers wish to take it up, they do not need to notify BS and can press on with drilling the area for their normal contracted tonnage.

“But we understand that there may be growers who wish to reduce their area this year,” the letter adds.

“This alternative option (Option 2) can be offered to growers once the quota cut is known.”

Brussels is still keeping quiet on when this announcement will be, though the sugar management committee meeting on 2 March is considered most likely.

But it is now clear that the cut, when it comes, will be “non-linear”.

Member state experts agreed this week that countries with larger B quotas, such as France and Germany, should give up more of their output than those countries with smaller B quotas, such as the UK.

It was also agreed that those countries set to lose most production as a result of last November’s sugar reform, such as Spain and Ireland, will be treated more leniently.

EU agriculture ministers will sign off this arrangement in Brussels on Monday (20 February) after which all eyes will be on the EU Commission to reveal the total size of the cut.

The expectation is that it will be between 2m tonnes and 3m tonnes, equivalent to 10-15% in total.

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