NFU Sugar has agreed a three year Inter-Professional Agreement
for beet growers following several months of intensive negotiations
with British Sugar.
The negotiations also incorporate a range of options for growers
affected by British Sugar’s decision to close two factories.
NFU Sugar board chairman John Hoyles said: “The backdrop
to these negotiations was the radical price cuts agreed as part
of EU sugar reform. The NFU’s approach to negotiating the
new contract has therefore been equally radical.
“The result is a simpler and totally flexible contract offering
tangible improvements and more transparency. An added dimension
to our negotiations has been the need to address implications of
British Sugar’s decision to close Allscott and York factories.
“As a result a range of options have been agreed borne out
of discussions with affected grower ‘Focus Groups’.
We have negotiated better terms than are on offer elsewhere in
the EU and have achieved a menu of options which include compensation
from the processor and freedom to trade contracted tonnage.
“Overall this deal forms a platform on which we can build
a competitive, profitable British sugar industry for the future.”
The NFU negotiating team and advisers will be holding meetings
around the country over the next two weeks to present the new contract
in more detail and explain all the options available under the
Mr Hoyles said: “We’re still dissatisfied with the
contracted beet price that the processor’s offering but it’s
a significant advance on British Sugar’s original offer and
compares favourably to the situation in other EU countries and
the EU minimum of £17.50.
“We will continue to encourage growers to calculate their
production costs accurately so they can determine whether the beet
price continues to offer them an acceptable return on their farm.
Among the NFU’s negotiating achievements are improved payment
terms, full payment for sugar in crowns and freedom to trade contracted
tonnage year round. We have also negotiated for the full transport
allowance to be paid for the duration of the agreement. It will
not be reduced as the beet price falls.
“It is unfortunate that the deal has been overshadowed by
British Sugar’s announcement to close two factories but by
requiring this part of our negotiation to be a prerequisite in
reaching overall agreement between us on the new IPA, the NFU managed
to increase the pressure on the processor to improve options and
the level of compensation.
1. NFU Sugar has agreed a final beet price for 2009 of £19/tonne.
It will be linked to the wheat price and will include late delivery
allowances. This new price equates to around 7.5 million tonnes
or £11 million.
2. Contract terms for the new IPA remain unchanged. Beet prices
will be 2006: £22.86, 2007: £20.28, 2008: £19.22
and 2009: £19 (linked to wheat prices for the first time,
starting from £75 per tonne to £95 per tonne)
3. There will be no cuts to the EU Transport scheme. It will remain
unchanged at £25 million.
4. Beet growers affected by factory closures will be given an
extra year to grow for 2007 with £8 per tonne being offered
to surrender contracts. NFU Sugar estimates this will affect around
5. Payment terms will change for the better seeing growers paid
on the fourth Tuesday after delivery. This is a change from a set
date once a month.
6. Beet contracts will be more flexible allowing growers to buy
and sell contracts and grow on different plots from previous years.
7. Growers can contact the NFU Helpline for more information on
0870 066 1974
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