British Sugar and NFU Sugar have announced its agreement on sugar beet contract terms for 2019/20 in a move to help deliver better transparency and certainty in a highly competitive market.
Both organisations have announced today (13 September) a one year 2019 contract price of £19.07/t with no crown tare deduction - the amount of low-sugar beet delivered - which is equivalent to £20.42/t under the terms and conditions of previous contracts.
Building on this increased focus on revenue share, British Sugar and NFU Sugar have also agreed to work together to develop a greater risk/reward contract model with the intention of a one year pilot in 2020/21.
The model has been described as an "important step" by both groups, as growers will have the option to share more of the reward and risk that exists in the sugar market.
Growers can expect to receive their contract offers online or in the post in the week commencing 24 September.
On reaching this agreement, Colm McKay, British Sugar’s Agriculture Director said: “Our industry is one of the most efficient in the world and we look forward to continuing to work with over 3,000 growers to produce a quality product.”
NFU Sugar board chairman, Michael Sly added: “After a protracted negotiation in the face of difficult market conditions NFU Sugar has reached agreement with British Sugar on improving the simplicity and transparency of contracting which we believe will put the sugar growing industry on a firm footing for the future.”
The agreement announced includes:
• A commitment from British Sugar that the crown tare deduction will be removed permanently for all new contracts agreed from the 2019 crop onwards
• No new three year deal on offer in 2019
• For the 2019 one year contract - a 15% (increasing from 10% in 2018) revenue share for growers above an EU average white sugar price of €375/tonne (down from €475/tonne in 2018)
• Late Delivery Allowance payments in each campaign to be calculated based on the highest guaranteed minimum beet contract price paid during a campaign
• Performance rules to be based on fulfilling at least one of two criteria, either delivering sufficient tonnage or planting a sufficient area of sugar beet.
• Restrictions on leasing reducing the ability for non-farmers to hold on to CTE, while maintaining the ability to lease between active growers
