British Sugar pledges to realign 'balance of price and risk' for farmers
- Credit: Gary Naylor
British Sugar bosses have accepted the balance between risk and reward was "incorrect" during a beet campaign beset by bad weather and crop disease - following demands for better prices from disgruntled growers.
The disastrous 2020/21 season saw yields ravaged by aphid-borne virus yellows disease in the absence of banned pesticides, while the driest May on record affected the crop’s establishment before heavy rain caused harvesting difficulties in the winter.
Some growers lost thousands of pounds as yields plummeted, and some have quit the crop entirely, blaming low prices for failing to cover the rising risks.
British Sugar has introduced an enhanced support package including a market-linked bonus and a £12m Virus Yellows Assurance Fund, while a new pilot scheme is offering some growers the chance to invest a percentage of their crop into a futures-linked variable-price contract.
Kit Papworth, a Norfolk member of the National Farmers' Union's sugar board, said rising sugar prices meant some growers on the pilot were now selling their beet at £28 per tonne - much more than the standard contracts - which had created a "disparity" in the industry.
"The stars have absolutely aligned in terms of the pressure on growers," he said. "I know one grower who has lost £500,000 growing sugar beet this year. As a result people are fleeing the industry and there is a strong feeling that the price will really have to jump.
"A lot of people are talking about it starting with a three. Anything over £30 per tonne would be a big leap. But if British Sugar wants to fill their factories that is what it is going to have to be considering."
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Peter Watson, agriculture director at British Sugar, said the company was doing everything it could to support growers after a "hopefully long forgotten" campaign - but a price over £30 per tonne was "unrealistic".
"I think it is fair to say it was an exceptionally difficult season for growing sugar beet," he said. "Everything from the heavy rains through to the viruses a have definitely impacted on crop yield and fundamentally there were a lot of things not in our control which made it a really hard year.
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"There is always a debate about affordability in this. How realistic is £30 per tonne? Not very realistic. Similarly we also recognise that the current prices are probably too low for growers as well. So there is a balance to be had.
"We recognise that the balance of price and risk was probably incorrect for last year and we are doing something about it. You can do that through improving the prices, or you can do it by reducing the risk. We are trying to do both.
"The (futures) contract was open to all growers. It is a pilot scheme, based upon the world market price for sugar, and a good bit of news is that both the world and EU prices are moving up. As a result we are pretty confident that the overall beet price will move up in the coming years.
"We must recognise that some growers have lost 80pc of their crop, they may choose to make those decisions [to leave the industry] and we respect them for that.
"But we also recognise that we want to reward loyalty for people who stay in, and one of the things we are looking at is supporting our hardest-hit growers going forward as well. So it is definitely an issue for us, but something that we will absolutely work on, and we believe we will get a package with the NFU that makes sugar beet attractive."
Mr Watson said last season's yields were down about 25pc on the five-year average, with overall sugar production at about 0.9m tonnes, down from 1.19 tonnes the previous year.
But there is much more optimism for the forthcoming crop.
"This year's crop looks a lot healthier in terms of the virus yellows potential," he said. " It is about one tenth of last year's risk. So that in particular is a lot more encouraging.
"This year's seed potential from the latest varieties is about 4.5pc greater than it was the previous year. In addition to that we have got better seed treatments which is probably another 1pc.
"We were 98pc drilled by mid-April, which was great. We could do with a little bit more rain, like every other spring crop out there, but we are cautiously optimistic that we will get a good crop."