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Growers quit in sugar-beet shake-up

- 16 October 2001
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16 October 2001



Growers quit in sugar-beet shake-up

By Tom Allen-Stevens

MORE than 1000 growers have quit growing sugar beet in the biggest quota shake-up since the crop was first grown in the 1920s.

Around 600,000t of contract entitlement changed hands in an outgoers scheme co-ordinated by British Sugar and the National Farmers Union.

Initial results from the scheme, which closed on Monday (15 October), show 1200 growers have left the industry, said British Sugars Paul Bee.

Subject to British Sugar appraisal, their sugar beet quota will be shared between 80 potential new growers and about 400 existing growers.

“We left the redistribution largely down to market forces, with a small incentive for entitlement into the York factory,” said Mr Bee.

The company paid 5/t of the cost of the A and B contract entitlement traded within 30 miles of York, bringing an extra 55,000t into the factory.

“Its a bigger factory than the amount of beet up there and the Newark/York boundary has been rather too close to Newark,” said Mr Bee.

Despite this, there was interest in increased supplies to Newark, so trading into that factory there was suspended shortly after the scheme started.

But growers in the rhizomania-infested areas of East Anglia found little incentive to give up – despite record cases of the virus this year.

Just 20,000t moved out of Norfolks Wissington factory, amounting to just one day of the factorys total 2m tonne annual throughput, said Mr Bee.

Quota prices dropped considerably after the scheme started two months ago, according to consultant Mark Ford of Grantham-based Brown and Co.

Initially, this price was 47/t, but this quickly fell to 30-35, he said. Some reports even suggested that prices fell to less than the beet price of 27.65/t.


But Mr Ford said there was no shortage of interest.

“Things really picked up in the last week. I had buyers for five times the amount of contract entitlement I sold. Its been really successful.”

However, a hoped-for tax incentive has not materialised. All amounts will be treated as income revenue or cost, said the Inland Revenue.

Quota will be reviewed by the European Commission in 2005, giving buyers just four years of guaranteed life for the purchased entitlement.

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