Only the EU could decide to reform the new sugar reforms, and only DEFRA could be so unhelpful as to implement them through such short-term and irritatingly inconsistent measures. Just 2.2 million tonnes of quota has been given up across Europe since the 2006 reform, less than expected by the European Commission which has set a target of a 6 million tonne reduction by 2010. In response, the Commission agreed in September to fix aid for growers and contractors at 10%, while allowing beet growers to apply directly for a reduction of up to 10 % of factory quota.
So what does all this mean? You will already be aware that a Growers Initiative was set up by the Rural Payments Agency in October, allowing growers to give up all or part of their contract for quota sugar. This was on a first come first served basis, with the scheme being ended as soon as 10% of the national quota had been relinquished. Compensation payments have not been distributed though, following the launch of a new initiative involving the processors. Under this scheme, if British Sugar relinquishes more than 10% of its quota, the compensation offered through the Growers Initiative will be cancelled. Demonstrating its monopoly on the sugar industry, British Sugar applied to DEFRA in October to cut its quota by 13.5%, an offer which is likely to be accepted by the end of this week. This would mean that all UK growers would have to cut their quota by 13.5%, receiving compensation of what the NFU predicts to be around £28 per tonne of beet relinquished. If accepted by DEFRA, payments would come in two stages: the first not until June 2009, the second in February 2010.
This provides yet another headache for sugar beet growers, left once more at the mercy of bureaucrats who have no idea of how difficult it is to farm effectively when burdensome schemes are constantly being introduced. Growers in East Anglia may find consolation in the launch of the UK's first bioethanol plant at Wissington. Producing 70 million litres a year of bioethanol, this could perhaps be seen as a landmark event - though obviously not in the eyes of Hilary Benn who failed to turn up to open the plant. Promising to use surplus sugar from local beet, this could be a sign of better times ahead for East Anglia's farmers. But if British Sugar does not raise the price of normal sugar beet in the wake of the rise in price of combinable crops, then the new Wissington factory could be short of supply as some local farmers may look to ditch their sugar beet crop altogether. Perhaps this has already been envisaged, as British Sugar has entered a joint venture with BP and Dupont to build a 420 million litre bioethanol plant near Hull which will use UK-grown wheat.
