NFU urges Minister to step in amid an 'unfolding crisis' in the sugar sector

The union has written to the Farming Minister asking him to exercise powers available to set the sugar supply price after negotiations broke down and British Sugar communicated its contract offer to growers without agreement

Alex Black

03 November 2023 • 3 min read

NFU President Minette Batters has written to the Farming Minister asking him to step in on an ‘unfolding crisis' in the sugar sector.

The letter, seen by Farmers Guardian, outlines the union's shock and frustration that British Sugar has, following months of negotiations, failed to agree terms for the supply of sugar beet for the 2024/25 contract year with the NFU and directly approached growers with a unilateral contract offer.

In the letter, Ms Batters said it was in ‘total disregard' for the integral role played by the NFU, and an ‘abrupt and unprecedented departure' from the established practice which has been in place for decades with the British Sugar as the sole buyer and processor for the sector.

British Sugar

British Sugar's decision to communicate directly with growers means it now requires an urgent resolution which will only be achieved by immediate Defra intervention, Ms Batters said.

She called for a statement to industry ahead of Monday November 6 confirming the NFU's vital role under Article 125 of the ‘CMO Regulation' and the invalidity of contracts formed on this offer.

The union also asked for regulations to be amended to avoid a repeat and the exercise of statutory powers under section 69 of the Food Act 1984 to determine the terms for the 2024/25 contract year.

In a separate letter to growers, NFU Sugar chair Michael Sly said the board believed the processor's actions had been done ‘in the hope' individual growers would accept a contract which gives significantly less value than NFU believed they should.

He added it would ‘thus enable British Sugar to retain significantly more of the higher profits we believe they will earn in the 2024/25 period'.

Profits

"We understand some growers have been told by British Sugar account managers that the difference between British Sugar's offer and NFU Sugar's position is only £2/t and if they contract early they will have access to better yielding seed that would more than make up this difference," he said.

"To be clear, NFU Sugar is fighting to deliver a package that has much greater value than this to growers, in properly sharing the extra revenue British Sugar is due to make from the extremely high forecast global sugar prices in the 2024 contract period."

Growers were also invited to an emergency NFU Sugar meeting at 16:30 on November 3, with the board wanting growers to show solidarity with the union's stance.

Defra

A Defra spokesperson said: "We are aware of ongoing negotiations and are in touch with the relevant parties. We are considering what action may be needed as part of the dispute resolution process.

"We recognise the importance of sugar beet farmers and their vital contribution to UK sugar production. It is important that farmers are paid a fair price for their product whilst also keeping the price of beet sugar competitive."