Cereals 2009: Sugar beet talks heading for stalemate

2010 beet contract talks between NFU and British Sugar are heading towards a stalemate and a repeat of last year’s drawn out negotiations.

Speaking at a Cereals 2009 seminar, the NFU sugar chairman William Martin defended the union’s call for a sugar beet price of £34.50/t next year, while BS continued to call it “unrealistic”.

Mr Martin insisted the higher price was needed to cover production costs and encourage long-term reinvestment. “British Sugar has said it wants long-term confidence and investment in the sector, so we asked growers what this meant for them – that’s how we arrived at this price.

“Let’s not forget, ABF [British Sugar’s parent company] announced profits from its sugar division were up 21% and has publically said that there are good prospects for the sector now that the European sugar regime policy has settled down. The currency has also helped them and I think it’s right farmers get to share in this.”

Mr Martin said the NFU “stands ready” to receive grower contracts before passing them to British Sugar, as it did during last year’s negotiations. “It’s too premature to say what will happen yet, but we are prepared to receive contracts if that’s what growers want us to do.”

But BS’s Robin Limb said the net margin for sugar beet at last year’s price of £26/t stood up well compared with other crops and there was no justification for the price proposed by the NFU. Results from a survey of 250 growers last season found an average net margin (before rent and finance charges) of £489.95/ha, with the top 25% of growers achieving a margin of £964.90/ha.

“Negotiations are effectively stalled at the moment, but there is a very bright future for beet, providing it’s at realistic prices.”

Mr Martin also repeated calls for changes to the crown tare rules to ensure growers were paid for everything grown and said better compensation should also be given to reflect the risk associated with long campaigns. The easiest way to do that was to improve the existing late delivery terms, he said.

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