Keeping sugar farmers sweet

By Catherine Boal

- Last updated on GMT

Related tags: British sugar, European union, United kingdom, Sugar beet

British sugar growers can breathe a sigh of relief after learning
that one of the country's foremost beet producers will not be
closing facilities as originally thought.

After months of speculation, British Sugar has announced that it will increase production in the East Anglia beet-growing area as it seeks a greater share of the European market.

The news follows last month's closure of two factories in Yorkshire and the West Midlands and puts to rest rumours of a substantial slump in the industry.

In a letter sent by the company to farmers last week, the company reassured growers that "British Sugar remains committed to the UK beet sugar industry."

The primary British sugar processor intends to invest £27m (€39.9m) in its remaining four factories and purchase an additional 83,000 tonnes of the EU sugar quota.

In addition, the company will offer compensation to growers affected by the closure of the two factories.

The National Farmers Union (NFU) who represent all British sugar beet growers have signed a three-year inter-professional agreement with the processor.

NFU sugar board chairman John Hoyles said: " 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."

As part of the negotiations British Sugar agreed to pay £19 (€28.1) per tonne for beet - an improvement on the set EU minimum price of £17.50 (€25.9).

British Sugar is owned by the international food and ingredients manufacturer Associated British Foods and claim to be the lowest cost processor in the EU market.

In the future the company has pledged to work with the NFU in reducing the price of seed for growers, simplifying contracts and examining transport costs.

Related topics: Market Trends

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