Beet producers deserve better
Thursday, August 07th, 2008 | Author: News Team
Over the next few months British Sugar will be processing virtually the entire British sugar beet crop to produce refined sugar for use in a multitude of industries ranging from confectionary to bio-ethanol. It is thought likely that this year British growers will produce in the region of 7.5 million tonnes of beet – mostly in the East Midlands and East Anglia – from which British Sugar will refine around 1 million tonnes of white sugar.
With substantially increased fuel and fertiliser costs, British producers were very unhappy with the £24/£25 per tonne price originally offered by British Sugar for their beet crop. After some persuading the National Farmers Union (NFU) recently met up with the company in an attempt to negotiate a better deal. Producers want around £30 per tonne, but despite the efforts of the NFU – efforts that have not impressed many producers from what we understand – the best they have been able to achieve is a revised offer that equates to around £26 per tonne. Now, whereas the big landowners and company owned combines can derive a useful profit based on this offer - due to being able to apply economies of scale - the smaller producer can’t.
By anyone’s standards £26 for a tonne of sugar beet can hardly be considered just reward. For the average beet producer it just about covers the cost of production with a little to spare – only the “big boys” on the large private and company estates have anything to celebrate. It is certainly not the sort of price on which the average producer will make his fortune, and brings into question the long-term viability of the sugar beet industry inasmuch as the “small man”, working the family-run farm, is concerned.
Yet, according to British Sugar’s own promotional blurb, last year they bought the entire British sugar beet crop for approximately ÂŁ180 million – which suggests a price paid to producers of around ÂŁ25 per tonne. That was, of course, before this year’s huge increases in both diesel and fertiliser costs.
Assuming producers are forced to accept the £26 per tonne currently on offer, then the cost to British Sugar of this year’s crop will be around £190 million. A lot of money – but perhaps not that much considering white sugar for October delivery is currently commanding a price of £398 per tonne! This would suggest that British Sugar’s £190 million outlay will realise some £398 million in terms of refined white sugar!
Under the circumstances, Land & People is left wondering what is preventing British Sugar from upping their offer from £26 per tonne for beet to at least £28 per tonne – if not the full £30 per tonne requested? Surely margins in the world of sugar refining can’t be that tight?
As matters stand both British Sugar and the NFU are leaving a taste in the mouths of producers – and it isn’t a sweet one! Additionally, the NFU is again seen as leaving itself open to the accusation that it is run by and for the “big man” – to the detriment of the many “little men” in the industry.
Land & People supports calls for a fair deal for our beet producers.
Category: Farming, Sugar beet | Leave a Comment
