October 30 2014 Latest news:
Saturday, July 26, 2014
Farmers facing a 24pc drop in the price of sugar beet for the 2015/16 campaign are being told that it is “fair in the circumstances”.
Under a deal hammered out by the NFU and British Sugar this week the price will go down from £31.67/t to £24/t.
The agreement has been worked out against a backdrop of high sugar stock levels and falling commodity prices which gave NFU negotiators little room for manoeuvre.
The price for surplus beet has not been announced but is “likely to be significantly lower”.
One saving grace is the fact the deal includes a £1/t bonus for those using the British Sugar Haulage scheme.
The NFU has also negotiated the possibility of a “contract holiday”, offering farmers the chance to grow less than their quota while still retaining full entitlement for 2016/2017.
The NFU’s sugar board chairman William Martin, who farms in north Cambridgeshire, said: “It is a fair price in the circumstances; it is a big loss but that is farming. The price of wheat, barley, rape and beef has dropped by the same amount. We are in agricultural commodities and they are very volatile things.
“We understand this price is unattractive so to give farmers choice we have got British Sugar to agree they can opt out for a year, if they want, on a contract holiday.”
Mr Martin said he would continue to grow sugar beet - “it still stacks up for me” - but other growers might feel there are better alternatives.
He admitted a lot of farm businesses would be facing a worrying time next year and it might have a bearing on investment decisions in some cases.
Ross Haddow, farm manager at the Stody Estate, in Melton Constable, said the deal reflected the reality “British Sugar have had declining sales in very competitive times”.
He said the economic situation had been exacerbated by a bigger crop than expected last year and an even larger over-supply this year.
However, the price announcement had not come as a shock to farmers as they had already faced the tumbling prices of other crops.
Mr Haddow said it was important farmers continued to work closely with British Sugar to protect the industry from the looming threat of continental competition. John Collen, who grows around 3,000 tonnes of beet at his farm at Gisleham, near Lowestoft, was far more critical.
He said he was unlikely to grow the crop next year and was currently looking at alternatives. He argued that the potential damage to the soil and to the yields in follow-on crops should be reflected in the price and added that farmers were feeling “very, very bruised”.
“It’s an appalling deal,” he said. “I have yet to find anybody who thinks this is anything but a kick in the teeth.”
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