Anger as British Sugar refuses to top up haulage allowance
© Tim Scrivener Sugar beet growers face soaring haulage costs to deliver their beet to the factories this season after talks between the NFU and British Sugar aimed at finding a solution broke down.
The NFU has been urging British Sugar, the sole processor of the UK’s sugar beet crop, to take action and introduce “exceptional measures” to urgently address the crisis in haulage costs.
Union leaders wrote to the processor back in September, calling for a minimum 10% increase in transport allowance rates during the 2021/22 beet-lifting campaign.
See also: Growers face delivering own beet due to HGV driver shortage
NFU Sugar board vice-chairman Simon Smith said growers were facing an “unprecedented crisis”, with other sectors paying up to £2,000 a day for haulage amid a shortage of HGV drivers due to a combination of Covid, Brexit and other factors.
Growers have seen haulage rates rise by as much as 20% and they have continued to climb, leaving some faced with the prospect of using their own tractors and trailers to deliver beet to British Sugar’s four sugar processing plants in Bury St Edmunds, Cantley, Newark and Wissington.
Minimal uplift
The NFU said the current model for calculating growers’ transport allowance payments was expected to deliver on a very minimal uplift at the end of the campaign, which will nowhere near cover the additional costs absorbed by growers.
But the union said British Sugar had refused to take action for the four in five growers that manage their haulage independently – despite acknowledging the issue exists.
Mr Smith said: “British Sugar has acknowledged the significantly higher haulage costs growers are bearing and that growers outside of their managed haulage scheme do not have the same clout or ability to offer outside work as British Sugar does to keep prices down.
“As a result, many growers are having to subsidise haulage costs, at the same time that British Sugar is benefiting from high sugar prices.”
“Yet again, this is another case of British Sugar using the beet growers to subsidise their business while they are posting healthy profits of their own. This short-sighted approach is to the detriment of the whole homegrown sugar industry’s long-term sustainability.”
Exceptional situation
Mr Smith added that the NFU had not asked for wholesale restructuring of the contract, but simply a “temporary sticking plaster” to account for this year’s exceptional circumstances.
“We believe British Sugar’s unwillingness to work with growers on this will not be forgotten,” he added.
One Norfolk sugar beet grower, who did not want to be named, told Farmers Weekly: “We don’t go through British Sugar’s managed haulage scheme. We deal directly with a haulier and he has put his rates up by 10% because of labour and fuel.
“We’re not going to get that money back. It’s out of our pockets.
“The price of sugar has gone up and British Sugar is making healthy profits. They should do the right thing and increase the Haulage Allowance rate.”
British Sugar responds to NFU criticism
British Sugar released a lengthy statement to the press in response to the criticism from the NFU.
The processor said the transport allowance is calculated by an NFU Sugar and British Sugar-agreed mechanism, which has stood the test of time over the past decade.
By its nature, it is adjusted year-by-year and calculated according to the costs of its beet delivery service.
Peter Watson, agriculture director at British Sugar, said securing logistics for the service this spring and summer had been hit by rising inflation, as well as fuel cost increases in the first half of the campaign.
“While we will not be making any exceptional adjustment to the transport allowance this campaign, we support growers in making their own risk-management decisions, including on sugar beet haulage,” said Mr Watson.
“We provide an opportunity for growers to insulate themselves from additional costs by joining the beet delivery service, should they not wish to make their own haulage arrangements.
“To provide further flexibility, we’re giving all growers – including those that have already submitted their 2022 contract offer – until 3 January 2022 to sign up to the beet delivery service.”
There is no limit to the number of growers that can join the service.
