TALKING POINT
TALKING POINT
More freedom and
flexibility can only
make for a better and
more profitable sugar
beet industry, says
Marie Skinner
I am grateful to pigeons. The large number of woods on my farm, well populated by hungry flocks of the bird, meant that back in the 1970s I kept growing sugar beet and didnt replace it with oilseed rape. Controlling pigeons would have been a problem, asking British Sugar for more quota was easier.
In those days, contracted tonnage entitlement (what is inaccurately called quota) was freely available. Now, 25 years later, a third of my farm grows the most consistently, profitable crop available. It is why an arable farmer said to me, with a hint of envy: "Its all right for you, youve got sugar beet and youre protected by a closed shop."
He is struggling to make a decent return from his combinable cropped farm, whereas my arable operation, despite drastically declining income, remains in profit. He felt it unfair that he could not improve the income potential of his farm by growing sugar beet. Quota was fixed in the past; I had it, he didnt and there was nothing he could do to acquire it – until now.
British Sugar is allowing a trade in quota, with prices determined by the market. It is a new scheme giving an opportunity for new entrants to enter the industry and for existing growers to increase the scale of their operation or cash in their new asset and quit beet growing.
It should have happened years ago. Trading will put flexibility into the sugar industry, increase efficiency and keep the sugar industry moving forward. It should benefit both grower and processor.
So, why is the outgoers scheme a one-off that can only happen this year? If it is right to enable industry restructuring this year, it should be right for it to happen every year?
Constant change within the industry is essential if UK sugar production is to remain competitive. A major review of the sugar regime will occur in 2006 and, with the CAP mid-term review soon, nothing is guaranteed, not even prices. After 2006, pressure from free market forces will increase and for the sugar industry to survive, it must be efficient. The key to achieving that is encouraging change, not trying to control it.
BS should get on with its own job of processing beet and marketing sugar and leave farmers free to do what they are good at, growing beet. Growers need the freedom to choose their own cropping system. Those who want to grow beet should be free to do so, within the financial constraints imposed by the commercial cost of quota.
BS should relax, welcome increased trade in quota and realise that a grower who buys it will make absolutely sure that all the contracted tonnage is grown and delivered to the factory in good condition. They could not afford to get it wrong, in the way some growers do now.
The constructive approach would be to use this year as a pilot scheme for trading quota, leading to the setting up of a trading mechanism for future years, with rules set jointly by BS and the NFU to protect the quality and reliability of future production.
Then, everyone should step back and leave it to growers to decide who wants beet, who doesnt, and at what price. The market will determine what happens and it will work. It will be a better mechanism for selecting effective, competitive beet growers than leaving production frozen in the hands of existing growers.
So, back to my quota: At £50/t Ill sell but at £30/t Ill keep growing. If I dont sell this year Ill just have to hope that one day BS allows quota trading to become a permanent part of the sugar industry.