Defra angers union over sugar compensation u-turn

By Linda Rano

- Last updated on GMT

Related tags: United kingdom, International trade, Tonne, British sugar

The UK National Farmer's Union (NFU) said yesterday it is
considering legal action after UK body Defra revealed it was
planning to re-open negotiations on how much compensation sugar
growers could receive.

According to the NFU, the Department for Environment, Food and Rural Affairs (Defra)'s plans to reopen agreements are "unlawful"​, as British Sugar had already successfully applied to renounce 13.5 per cent of the UK sugar quota as part of the EU sugar reforms. NFU Sugar had previously sent out a note to beet growers - including those who had already stopped growing due to factory closures in the West Midlands and York - to confirm that growers for the 2006, 2007 and 2008 crops would be eligible for compensation. The compensation would be made relevant to the number of years their tonnage was held in the reference period. If the tonnage was held for the entire reference period they would receive around €39 per tonne lost, the NFU said. However, NFU Sugar this week advised growers to now disregard these forecasts on compensation, as Defra wants to re-open negotiations on the sections pertaining to distribution of compensation between growers and contractors. In a letter to the growers, NFU Sugar said: "The NFU is angered by these developments. Defra's latest move only adds delay and uncertainty to theUK's bid for compensation. It also threatens to derail the whole process and undo the progress that has been made over several months in the interests of the entire industry. The NFU is currently considering legal action. We do not accept that there is scope for Defra to revist the application at this stage​." In a statement issued on 6 February, Associated British Foods, parent company to British Sugar, said that the compensation payable to British Sugar would be €93m made in two instalments of €31m by June 2009 and €62m by February 2010. Until now, 4.8m tonnes have been renounced within the restructuring scheme advocated by the EU sugar reforms. The reforms were introduced in 2006 to improve competitiveness and market orientation of the EU sugar sector, and to guarantee its long term future. The goal is to reduce the volume of sugar on the market by 6m tonnes by 2010, with exports limited to 1.374m tonnes and imports substantially increased.

Related topics: Commodities, Cocoa & Sugar

Related news

Show more