NFU secures higher sugar beet price

Following renegotiation of the 2008 and 2009 beet prices with British Sugar, the NFU has secured a deal that could see the beet price hit £24 per tonne in 2009, an increase of over £4 above the original agreement.

The beet price for the 2008 campaign, to which growers have already signed up, could also increase to around £21, from an original price of just over £19 per tonne.

NFU sugar board chairman John Hoyles said: "UK beet growers have played a big part in achieving these figures. They have added their voice to that of the NFU negotiators in telling British Sugar at every opportunity that the beet price wasn't sustainable at current levels. That message and the very real threat of growers abandoning beet production permanently for more profitable alternatives prompted candid and intensive price discussions between the parties."

The latest negotiations should mark a turning point, according to Mr Hoyles: "British Sugar has listened to growers and taken their concerns seriously", he said. The processor seems ready to work more closely with growers, accepting as they do that they need to guarantee supply and that this depends on paying a realistic price for the raw material.

"We have agreed a mechanism which could generate prices way above those achieved by any other EU member state. This agreement also sends a positive message to growers doubting British Sugar's commitment to the UK industry."

However, the NFU is still telling growers to keep track of their costs and to grow beet only when it makes economic sense to do so. "The days of growing sugar beet simply out of tradition have long gone", said Mr Hoyles.

Growers have 15 days from receipt of the 'Form of Notification' to cancel their 2008 contract without penalty. If they decide to cancel, they will forfeit their contract without payment but will remain entitled to compensation arising from the recent round of EU reforms although this may exempt growers from being eligible for compensation arising from any further restructuring which may be announced in spring 2008.

Defra is expected to make its decision on British Sugar's application to renounce 13.5 pre cent of UK quota in January.