Growers show interest in beet quota trade scheme
Growers show interest in beet quota trade scheme
By Robert Harris
SUGAR beet growers are showing keen interest in the new outgoers scheme announced by British Sugar and the NFU this week, which allows quota to be bought and sold for the first time in the UK.
Described as a "one-off", the scheme allows producers to sell part or all of their 2002 contract tonnage during the next few weeks to other growers or new entrants.
Details outlined by BS and the NFU during last years Inter-Professional Agreement talks have been thrashed out over the past 12 months. The scheme opened on Monday and will run until mid-October.
BS and the NFU said it would give growers greater flexibility and improve industry efficiency. "We believe this is the best and quickest way of getting beet into the hands of good growers," said Karl Carter, BS agricultural operations director.
Matt Twidale, chairman of the NFU sugar beet committee, said the scheme offered real benefits to the industry. He reported plenty of interest from potential buyers and sellers.
"Growers who want to retire or give up the crop will receive a fair value for their quota. It will allow good growers who want to expand to do so, and will allow new entrants into the sector. This will remove the criticism that beet growing is a closed shop."
BS will act as an overseer, not as a broker. "Some people are concerned that deals have to go through an agent and will incur commission charges," said Mr Carter. "But growers can talk to each other directly." British Sugar will help by publishing lists of acquiring and relinquishing growers.
Although no one can predict uptake, a similar operation in Ireland saw 20% of the total contract tonnage change hands. If that were repeated here, the number of sugar beet producers could fall below 7000.
Prices are likely to vary according to location and a farms yield potential.
"The only market evidence so far is the Rhizomania leasing scheme and the grey leasing market," said David Wright of Lincoln-based agents JH Walter. "If you apply the same sort of relationship between lease and purchase price that milk quota has, you could get to about £50/t." But given the short time available, he expected a "strange" market.
Duncan Clark, of Boston-based agents DCFM, said his office had been struggling to cope with inquiries. Early trading – 1200t in three lots midweek – made £60/t. "That is the current price and is probably a fair marker."
He urged growers to act quickly. British Sugar could regulate transfers to suit factory capacity and it had no plans to extend or repeat the scheme. "If growers wait too long, they could miss out."
lNon-growers can receive details of the scheme from British Sugar (0870-240 2314). *