I’ve had a number of sugar-beet farmers from the East Midlands contact me about a problem caused by the end of beet quotas. Normally, of course, removing quotas would be cause for celebration. We approve of deregulation and free markets. But in this case, the timing, and the way the Commission (and the processing industry) have handled it, have resulted in — guess what — a huge problem for British farmers. British growers are effectively being penalised for their very high efficiency.
The British sugar industry comprises “growers” and “the processor” (British Sugar). Both parties have significantly increased efficiency in recent years, to rate very highly in the EU league table. This should have partially insulated the UK from the draconian cuts in production required in the EU to stop the scandalous dumping of sugar exports (which has now been achieved).
The sugar sector funded massive compensation payments to inefficient industries to quit production, but several refused this inducement, obliging the EU to demand cuts from more efficient industries like the UK’s.
The sugar processing factory in York closed abruptly in 2008 as a consequence, following only a year after the closure of the West Midlands factory. This had been done to keep the industry at maximum efficiency and to fulfil what the EU demanded, which you might have hoped would protect the UK from the EU “knife” and further damaging changes. This whole process has obviously meant job losses from the former factories, and cropping dilemmas for former growers.
The French, predictably, adopted a more casual approach towards their processing efficiency, relying on their highly productive growers in the warm and fertile Paris Basin to keep the industry efficient as a whole. Meanwhile, perversely, there has been a dramatic increase in world sugar demand and the UK would like to take advantage of it. But we can’t do that from flattened factories. It will take time to build the extra capacity, and the EU quota system which obliged our factories to close in the first place should be retained to 2020 so that we can expand in confidence.
If the quota system is removed as proposed in 2015, the French industry will be able take advantage of all the extra demand, leaving the UK penalised for playing strictly by the rules. This is an all-too-familiar theme over the years, and we don’t want to see it played out yet again.