NFU Sugar and British Sugar have announced a one-year sugar beet contract from 2022, including the continuation of the virus yellows assurance scheme and the futures-linked contract.
The contract for 2022 will pay a fixed price of £27 per adjusted tonne. Current multi-year contracted growers will have the option to upgrade to a fixed £25 per adjusted tonne by contracting for an additional year. There will be no separate market-linked bonus and these prices are on a zero-crown tare basis, meaning that growers are paid for the entire roots of beet they deliver.
The virus yellows crop assurance scheme will continue to compensate growers for the proportion of yield losses suffered where a grower has the disease present in their crop. This is a three-year, £12 million fund, underwritten by British Sugar covering all new and existing contracts and there are no changes to the terms and conditions.
In addition, both organisations have agreed to continue the innovative futures-linked variable priced contract, giving growers the ability to make their own pricing decisions for a portion of their contract. This will now be open to all growers, who will have the option to allocate up to 10% of their tonnage onto this contract.
Another new point is a local premium for all growers up to 28 miles from their nearest factory. This will start at £2 per tonne for growers up to nine miles and will reduce on a linear scale down to 10p per mile up to 28 miles.
NFU Sugar board chairman Michael Sly said: “Following another difficult negotiation, we have finally managed to agree on terms with British Sugar. The substantial increase in the one-year contract price reflects the increased costs and risk sugar beet growers now face and recognises the fact that sugar beet must offer returns comparable with alternatives.
“After a successful pilot this year, the futures-linked variable priced contract will now be available to all UK sugar beet growers. This contract offers both growers and the processor the potential to lock in attractive prices, meaning all parties can benefit from it. Other countries around the EU are starting to follow our lead on this and I am sure that this type of contract will become increasingly common as EU countries modernise their thinking and practices.”
Peter Watson, agriculture director, British Sugar said: “We are pleased to be able to share the agreed contract prices with growers after a long negotiation. Our aim was always to agree on a fair and sustainable price for all and we believe this is what we have achieved.
“Together with our Virus Yellows assurance scheme, the new local premium and the futures-linked contract we believe the contracts offer a competitive package for growers.”