British Sugar and NFU Sugar agree new one and three-year contracts
British Sugar, which has a factory at Wissington, and NFU Sugar, which represents sugar beet growers in the UK, have agreed one-year and three-year sugar beet contracts from 2021 which will include compensation cover for yields affected by a virus transmitted by aphids.
It is thought that a mild winter combined with a ban on the use of certain insecticides has left crops more vulnerable than ever to Virus Yellows, which can reduce sugar beet yields by half.
The Virus Yellows crop assurance fund to be introduced from 2021 will compensate growers for a 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.
The one-year contract for 2021 will pay £20.30 per adjusted tonne, with a market bonus triggered when the adjusted EU reference price exceeds €375/t. The bonus would pay growers 10% of the value above this level.
The three-year contract for 2021-23 will pay £21.18 per adjusted tonne, with a market bonus triggered when the adjusted EU reference price exceeds €400/t. The bonus would pay growers 25% of the value above this level.
The base contract prices are equivalent to those in the 2020 contract.
In addition, NFU Sugar and British Sugar have agreed to pilot an innovative futures-linked variable priced contract, giving growers the ability to make their own pricing decisions for a portion of their contract.
Growers will have access to the sugar futures market for the first time in the UK in order to decide when to fix the price of beet on this contract.
NFU Sugar board chair Michael Sly said: “This negotiation has taken place during some very challenging times for our industry, particularly with the ongoing Virus Yellows issue growers are facing.
“NFU Sugar has worked constructively with British Sugar to deliver a credible deal which includes a ground-breaking Virus Yellows assurance fund, to help mitigate some of the growers’ risk.
“We have also been working hard over the past couple of years, to develop a new risk management tool for growers. The innovative futures-based contract means that growers can, for the first time, price their own sugar beet."
British Sugar agriculture director Peter Watson said: “Our new contracts offer a competitive support package for each and every grower, which sees a fair price, market-linked bonuses, and flexibility and innovation. Given the difficulties many growers have faced in recent months with aphids, we are particularly pleased to offer our new Virus Yellows assurance in the contracts, to help support growers through the challenges of the disease."
