Changes have been unveiled as part of the 2021 sugar beet contract offer, including a new Virus Yellows assurance fund and a futures-linked contract pilot.
British Sugar and NFU Sugar have concluded negotiations for one-year and three-year sugar beet contracts from 2021.
The assurance fund will compensate growers for a proportion of yield losses suffered where Virus Yellows has been present in the crop.
This is a three-year £12 million fund underwritten by British Sugar, covering all new and existing contracts.
The one-year contract for 2021 will pay £20.30 per adjusted tonne, with a market bonus triggered when the adjusted EU reference price exceeds €375/t. The bonus would pay growers 10% of the value above this level.
The three-year contract for 2021-23 will pay £21.18 per adjusted tonne, with a market bonus triggered when the adjusted EU reference price exceeds €400/t. The bonus would pay growers 25% of the value above this level.
The base contract prices are equivalent to those in the 2020 contract, British Sugar and NFU Sugar say.
In addition, both groups have agreed to pilot a futures-linked variable priced contract, giving growers the ability to make their own pricing decisions for a portion of their contract.
Growers will have access to the sugar futures market for the first time in the UK in order to decide when to fix the price of beet on this contract.
NFU Sugar board chair Michael Sly said the negotiation took place during a challenging time for the industry, particularly with the Virus Yellows issue growers were facing.
“NFU Sugar has worked constructively with British Sugar to deliver a credible deal which includes a ground-breaking Virus Yellows assurance fund, to help mitigate some of the growers’ risk.
"The innovative futures-based contract, announced as a pilot today, means that growers can - for the first time - price their own sugar beet.
“This deal builds on the work of previous years in providing greater transparency and lays stronger foundations for the future."
He added: "In what will be a more volatile world, we believe this agreement helps support a sustainable homegrown sugar industry in the UK.”
British Sugar agriculture director Peter Watson said the new contracts offered a competitive support package for growers.
"We are pleased to offer our new Virus Yellows assurance in the contracts, to help support growers through the challenges of the disease," he said.
“Growers will also continue to see investment in the future of the sugar industry, through science-led advice and guidance from the BBRO, innovation in seed technology, and industry-wide advocacy for plant protection products and future breeding techniques.”
The 2021 price list for sugar beet seed, as agreed by the joint British Sugar and NFU Sugar Seed Working Group, will be in the coming days.
