20 August 1999

Still time to avoid sugar beet deadlock, says NFU

By Robert Harris

SUGAR beet contract negotiations moved a step closer to arbitration last week.

Both the NFU and British Sugar have applied to the ministry to appoint a determiner. Neither side is prepared to give enough ground on several contentious issues, notably the issue of payment for sugar in crown tare, and talks are deadlocked.

But there is still time to avoid what is likely to be an expensive and lengthy process, says Matt Twidale, chairman of the NFU sugar beet committee.

"We are ready to talk to British Sugar at any time. I would like to come to a proper and sensible conclusion. But after three-and-a-half years of negotiations, still we are nowhere. If we do not get it right this time, five years down the road it is all going to happen again."

At a series of meetings organised by BS last week to explain its proposals to growers, farmers left the company in no doubt that they were backing the NFU, he adds. That was despite BSs intention to withdraw all concessions, including the £3m on offer for crown sugar, if talks go to arbitration. "These are simply threats to dissuade us from going down the arbitration route," says Mr Twidale. "Growers gave us 100% support."

Over 1000 farmers attended the series of meetings, says Clive Francis, BS deputy managing director. "The general consensus was that growers, and the beet committee, thought arbitration could and should be avoided."

But, while there is scope to make small changes to some of the proposals, it is unlikely that BS can move enough, he adds. "Even at this late stage you cant rule out the possibility of a settlement. But I wont underestimate the massive gap between us. Realistically, if the other partys aspirations are a million miles away you end up with a third party involved."

Meanwhile, sugar beet contracts leased under British Sugars new tender system met a keen trade, with available tonnage twelve times over-subscribed.

Releasing the figures this week, BS said 70% of the tonnage offered by growers on rhizomania-affected farms had been assigned to other growers, resulting in a pool price of £13.70/t, slightly higher than the £12/t many observers predicted.

The other 30% remains with growers who placed too high a reserve on their tonnage, says the companys Robin Limb. "They have the option to secure a private deal by the end of October, or they can continue to grow beet and receive compensation if they then get an outbreak."

Agricultural director Chris Carter is pleased with the result. "Together with privately agreed transfers, the stewardship scheme will make a significant contribution to avoiding the spread of rhizomania." &#42

Weather fears push milling up

FEED wheat prices eased this week as the weather closed in, but best milling premiums continued to climb to over £20/t.

Fears are rising that milling wheat, which accounts for a third of the UK area, will be hard hit by the weather. Reports of sprouting, especially in the Midlands, would, if confirmed, mean poor protein and Hagberg levels.

That is good news for those with milling wheats in the barn. Spot and forward values are now up to £23/t over feed in some areas, and £20/t is common, says Martin Parry of Andover-based Group Cereal Services. Group 2 wheats are fetching up to £15/t over feed.

Much still to cut

But much of the crop still to be cut could end up as feed wheat, adding to an already potentially big crop. Ex-farm feed prices slipped by about £2/t to average £70/t as a result. However, consumers short of supplies are paying £3-£4/t more, says Ian Wallis of Cargill.

Weather is also having a direct effect. "The UK will have another large exportable surplus, and poor quality would mean prices need to be heavily discounted to compete with a French crop that has already been harvested and is of high quality."

It is too early to assess what level of damage may have been done, he adds. "A few reports of crops sprouting and turning black have been enough to put the market on edge.

"It wont be until the crop has been cut, dried and tested that a clearer picture emerges." And there is not the urgency in the north, where most crops are only just reaching maturity, he notes.

News that the Home-Grown Cereals Authoritys planting survey puts the wheat area at 1.93m hectares, nearly 65,000ha (160,500 acres) above the ministrys latest estimate, has also reduced support for the feed wheat market, suggesting a total wheat crop of more than 15m tonnes. "On the basis of a five-year average yield this amendment will add about 500,000t to the UK crop," says Dalgetys Gary Hutchings.

lCereal exports from the EU received another big boost last week as Brussels market managers continued their aggressive stance by awarding almost 1m tonnes of licenses to shippers.

Higher subsidy

Just over a quarter of that – 257,000t – was for free market soft wheat. That was close to the previous weeks total despite Brussels having to grant a slightly higher subsidy of k33.25/t (£22/t) after US soft red winter wheat (the global benchmark) slipped to $93/t (£58/t).

A further 100,000t of wheat was released for export from intervention stores, priced at k85-k94/t (£56-62/t). And export licenses for 235,000t of free market barley and more from intervention stores were also granted. &#42

IB to unblock grain delays

LONG delays experienced by growers and traders trying to enter grain into intervention could soon be a bad memory after Intervention Board action to improve the process.

Some applicants had to wait up to two months last season before grain was accepted. One reason for the bottleneck was the fact that there was only one approved laboratory in the country.

After lobbying by the NFU, the board has agreed to look at increasing the number of approved laboratories. It has also made in-situ storage – where intervention grain is held on farm or local store – more viable, by reducing the minimum wheat offer from 500t to 100t, as for barley, and by increasing the storage rate by 10.5%.

Fengrains Chris Barnes reckons the improvements are "a step in the right direction". But they will be academic this year as far as wheat is concerned. "We are 30% through the crop and everything has lost its Hagberg."

Some barley will go into intervention. But with no guarantee of when grain will be released, farmers tempted by the changes will have to plan carefully, he adds. &#42


&#8226 FLAX growers whose crops were ruined by last autumns deluge are to receive area aid after all.

Although the crops could not be processed, the EU Commission has authorised MAFF to make the payments, worth about £6m.

The move follows pressure by the NFU both in Whitehall and Brussels, says president Ben Gill. "This is good news for all UK flax producers who were worried that they might have lost out totally on their 1998 crop."

Growers should receive cheques from the Intervention Board within four to six weeks.

&#8226 FARMERS and landowners from Objective 5b areas of the Lake District and Pennines are urged not to miss out on valuable grant aid applications which must be made by the end of September.

Penrith-based chartered surveyors Clark Scott-Harden say grants covering 40-80% of costs are available and include moorland management to improve the environment for heather and grouse as well as sheep rearing.

"As well as grants for farm diversification and tourism, aid is also available for beef and sheep producers including up to 40% for new stock buildings." &#42

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