Sugar giant holding firm over crop price

The NFU continues to be locked in a dialogue with the Peterborough-based firm which counts a large number of the region’s sugar beet growers among its suppliers, after rejecting a £3 per tonne increase.

Earlier talks between the two parties had broken down with the NFU’s deputy sugar beet chairman Robert Law accusing the company of going behind the union’s back to negotiate with farmers individually. The price rise, to an average of £31.15 per tonne, inadequately covers the true costs of growing the crop, the NFU maintains.

But Colm McKay, British Sugar’s agriculture director, believes the offer on the table is not an unreasonable one.

Mr McKay said: “The enhancement of £3 per tonne to the agreed contract price is a direct result of listening to representations the NFU have been making to us over many months and is why we are disappointed and surprised that we have not yet reached consensus. Clearly, there are some growers that are telling the NFU the price needs to be even higher and we fully appreciate the NFU’s role is to represent all growers.

“We have sent the 2014 sugar beet offer documents to growers as we signed a contract in 2010 with the NFU, which obliged us to make an offer by June 30 each year. This obligation under the contract arose, as a result of feedback to us, that our growers wanted certainty of price each year, in order to decide whether they wanted to include beet as part of their rotation.

“We recognise that our enhanced price may not suit all growers but we continue to request growers to work out their margins using the prices we have announced and compare versus the alternatives and thus base their decision on that analysis, as they would do for any other crop.”

British Sugar does appreciate that sugar beet needs to deliver a margin to the grower that recognises the risks involved, Mr McKay said, but its offer, combined with the recent agreements for frost insurance, enhanced late delivery payments and planned investment in its factories, addresses this for the majority of growers, he said.

Mr McKay added: “In our continuing discussions with the NFU and outlined to growers in our recent communications, we believe these prices will deliver a significantly positive margin in favour of beet versus the alternatives and with alternative crop prices falling, that positive margin in favour of beet is increasing further.”

Doncaster sugar grower Chris Durdy, chairman of the NFU’s North East Sugar Board, said some growers were turning to other crops with better margins.

Mr McKay said: “Our only request before any grower makes a final decision is to complete their margin calculations to ensure they are basing their decision on the competitiveness of the crop.”