WORD ON THE GROUND: They can't produce British sugar without British growers
Many local farms grow sugar beet and supply the monopsony (sole) buyer, British Sugar (BS). The NFU Sugar Team negotiate for and represent the 3,000 growers. A symbiotic relationship benefited both farmers and BS for 100 years with a long-term approach to joint profitability and viability. No longer, with BS driving down the price to unsustainable levels.
We have lost neonic seed treatment and the 2020 sugar beet crop succumbed to aphids and the virus yellow disease. Beet yields halved.
Most farm crops are governed by the economics of a free market – a short crop leads to higher prices to compensate, but not the sugar beet price, which is fixed.
The breakeven yield at the current beet price is 85t/ha. Losses of 45t/ha at £21/t are £1,000/ha. An average farmer grows 40ha and has lost £40,000. UK growers in high pressure regions have lost a staggering £43 million growing the 2020 crop.
A sensible supplier/customer relationship would have led to discussions about mitigation or potentially underwriting losses and support for the grower base.
BS’s Managing Director, Paul Kenward, and Director of Agriculture, Pete Watson, recently spoke to 340 NFU growers. It was clear that BS do not comprehend the severity and finality of the situation or accept that the risk of growing the crop should be shared. Growers lost £1,000/ha and BS refused to contribute even £80/ha. The MD knows the price of everything and the value of nothing. Growers were unimpressed, disappointed and cannot see a future in growing beet.
Investment and employment are at risk on farm and in the sector. BS co products - Aggregates, Topsoil, Animal feed, Electricity, Soil Conditioning (Lime), Renewable energy, Bioethanol, and Horticulture will not exist without beet processing.
Farmers are acutely aware of progressive reductions to Direct Farm Payments. Growers have also voted to end potato and horticultural levy payments and support of R&D. Winds of change are blowing through the agricultural industry.
BS need to develop a sustainable price structure or risk the future of the UK sugar industry.
Farmers will not grow an unprofitable and high-risk crop. BS cannot produce British sugar without British growers.