Saturday, October 20, 2018

Beet growers offered one-year contract for 2019/2020

October 1, 2018 by  
Filed under Crops

Sugar beet growers were promised the option of sharing more risk and reward as they were offered a one year contract price of £19.07/t with no crown tare deduction for 2019/2020 – equivalent to £20.42/t compared to previous contracts.

The offer followed lengthy talks between NFU Sugar and British Sugar which culminated in a commitment from the processor that the crown tare deduction will be removed permanently for all new contracts agreed from the 2019 crop onwards.

NFU Sugar chairman Michael Sly said: “After a protracted negotiation in the face of difficult market conditions NFU Sugar has reached agreement with British Sugar on improving the simplicity and transparency of contracting.”

The NFU and British Sugar have agreed to work together to develop a better risk/reward contract model with the intention of a one year pilot in 2020/21. They say this will give growers the option to share more of the reward and risk that exists in the sugar market.

Other parts of the deal include:

• Late Delivery Allowance payments in each campaign will be calculated based on the highest guaranteed minimum beet contract price paid during a campaign.

• Performance rules to be based on fulfilling at least one of two criteria, either delivering sufficient tonnage or planting a sufficient area of sugar beet.

• Restrictions on leasing reducing the ability for non-farmers to hold on to CTE, while maintaining the ability to lease between active growers.

The one-year contract includes a 15% (increasing from 10% in 2018) revenue share for growers above an EU average white sugar price of €375/tonne – down from €475/tonne in 2018/. There will be no new three-year deal on offer in 2019.

British Sugar agriculture director Colm McKay, said he believed the agreement would stand the sector in good stead. “Our industry is one of the most efficient in the world and we look forward to continuing to work with over 3,000 growers to produce a quality product.”

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