Sugar reforms ‘threaten UK beet sector’, warn NFU

Plans to reform the European Union sugar regime threaten to mean lower beet prices for growers, the NFU has warned.

NFU sugar board chairman William Martin called for three essentials to help protect British growers in the light of the reforms.

First, farmers needed to see the continuation of the inter-professional agreement which sets the UK beet price, with no erosion of growers’ rights.

Secondly, the sugar quota system needed to be extended to 2020, said Mr Martin. Thirdly, he added, the European Commission should better manage the internal market.

Mr Martin gave evidence to the House of Lords Agriculture, Fisheries, Environment and Energy EU Sub-Committee on Wednesday (20 June).

CAP reform meant much of the existing EU sugar regime would lapse, he said, including the end of sugar quotas and a potential erosion of growers’ rights from 2015.

These proposals were now subject to negotiation in Brussels.

“The 3,500 sugar beet growers in England have only one customer; British Sugar,” he said.

“There is an imbalance in market power in our supply chain but thankfully the current EU rules allow growers to overcome that imbalance through the existence of inter-professional agreements.

“This agreement includes the ability for the NFU to collectively negotiate on behalf of sugar beet growers. Unfortunately the commission’s proposals put these vital powers at risk.

Mr Martin said British Sugar and the NFU had created a genuinely positive relationship through the existence of the inter-professional agreement.

“It’s a top-class agreement that extends benefits far beyond the ability to collectively negotiate the price of sugar beet,” he said.

“It creates the right collaborative framework to drive the industry forward and the stability both sides of our industry need to make long term investments.”

The UK beet industry was rightly proud of its performance, Mr Martin said. It was one of the most efficient sugar industries in the EU sugar sector. “I have no doubt, given the right framework for long term investment and a period of policy stability, that the outlook for our industry is bullish. But we are not there yet, he added.”

“There is an imbalance in market power in our supply chain but thankfully the current EU rules allow growers to overcome that imbalance through the existence of inter-professional agreements. This agreement includes the ability for the NFU to collectively negotiate on behalf of sugar beet growers. Unfortunately the commission’s proposals put these vital powers at risk.”
Willam Martin

Radical reform of the EU’s sugar regime in 2006 to remove inefficient producers hadn’t prevented the closure of one of England’s highly efficient sugar beet factories, said Mr Martin.

“That factory has gone, but stability through to 2020 will give British Sugar opportunities to invest in existing processing facilities and for growers to continue to make in-field efficiency gains.

“Our target is to increase productivity by four per cent per annum and while I have no doubt that this is a tough target, it’s worth aiming for if we are to be globally competitive by 2020.

“At the time of the last reform no-one, including the European Commission, could predict the events that unfolded on the global market.”

Within the space of three years, the EU had gone from being the world’s second largest exporter of sugar to being a significant importer.

“There have been recent supply difficulties in some areas, but the EU balance sheets suggest that we have increasing sugar stocks, so the market is not short.

Therefore my third request is for the European Commission to manage the internal market more effectively, by deploying the tools it has available in a more timely and more efficient manner.”

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