East Anglia's sugar beet growers hailed a 48pc increase in the price paid for their crops as "excellent news" as they battle soaring fuel and fertiliser costs.
The "landmark" price of £40 per tonne was announced for the 2023/24 campaign, following negotiations between British Sugar and the National Farmers' Union sugar board (NFU Sugar).
The offer also includes a "yield guarantee" product to protect income against yield losses, and an option for growers to commit up to 20pc of their tonnage to a variable-priced contract, linked to futures markets.
Fenland grower and NFU Sugar board chair Michael Sly said he was "incredibly pleased" with the increased price, up from £27 the previous year.
“With growers facing significant cost increases, and the prices of alternative crops having risen to unprecedented levels, I am glad we agreed on a contract offer that should keep sugar beet as a valued part of growers’ rotations," he said.
"I am hopeful this deal gives the opportunity for re-investment into the sugar beet sector and provides confidence for the future."
Farmers had been calling for higher beet prices to reflect the risk of growing the crop, which in recent years has been hit by weather problems and aphid-borne virus yellows infections in the absence of banned pesticides.
As a result, some growers have reduced their acreage, and some quit the crop entirely.
Mr Sly added: “After a couple of challenging seasons, which highlighted the increased risks growers are facing, I am pleased we have found a pioneering way of allowing growers to mitigate their yield risk.
“There is no doubt that we have been concerned about the decline in growing area over the past two years and the subsequent impact this had on the supplier base. It was important this deal addressed that and I hope now we will see that decline reverse and the industry rebound.”
British Sugar managing director Paul Kenward said the contract offer of £40 per tonne offers growers "a healthy margin even at today's high costs, compares very favourably with alternative crops, and offers yield guarantees for a small payment".
“We are confident that this straightforward, attractive offer provides choice, security and profitability during an extremely challenging time for all growers," he added.
"On top of a compelling price, we have listened to calls for flexibility and growers now have an option to opt-in to the new risk mitigation option we are offering for yield protection, as well as a cash advance option for the 2023 crop."
The offer also includes revised multi-year prices and a local premium of £2 per tonne for growers within 20 miles of one of British Sugar's four factories, at Cantley and Wissington in Norfolk, Bury St Edmunds in Suffolk, and Newark in Nottinghamshire.
North Norfolk contractor Kit Papworth, also an NFU Sugar representative, said: "This price is excellent news for farmers, but it is reflective of very high input costs right now, particularly fertiliser and diesel which are incredibly expensive.
"After some tricky years of virus yellows disease, all sides felt we needed to restore some confidence in the industry."
Charles Whitaker, managing partner in the Norwich office of rural agency Brown and Co, said the "landmark" price agreement was a "very positive step" for an important regional industry.
And he encouraged other sectors to follow suit amid the “apocalyptic impact on global agricultural economics" caused by the war in Ukraine.
“Let us hope that other large-scale food processing and food supply companies see the light as the competition for land use to return positive margins for farmers and growers reaches new heights in the run-up to committing to the 2023 season in the next few weeks," he said.
“Retailers and food processors need to work to provide greater certainty for farmers if they want to hold land areas for 2023 in a globally disrupted farming landscape.
"Peas and root vegetable crops look particularly vulnerable at present with little encouragement for growers to maintain area for 2023 with such massive cost inflation and increased risk, and opportunity of better margins from broadacre combinable crops."
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