Select Committee on International Development Appendices to the Minutes of Evidence


Memorandum submitted by the East of England Development Agency

  The sugar beet growing and processing industry is important to the economy of the UK. It is estimated that some 23,000 people are employed in the industry and many of these jobs tend to be located in the more remote rural areas. The economies of these areas are already under pressure as a result of the crisis in farming, and a range of other factors well set out in the recent Rural White Paper.

  It is also estimated that some 9,000 farm holdings include sugar beet as part of their crop rotation. Despite the fact that sugar beet prices have fallen by about 30 per cent over the past three years, mainly as a result of the relative strength of sterling against the euro, it is the sugar beet crop that is keeping many small and medium sized farms viable. The importance of the sugar beet crop to the agricultural industry in some parts of the country therefore must not be underestimated.

  The six counties of the East of England contain 60 per cent of the UK sugar beet crop area and over 50 per cent of the UK beet growers. Local haulage contractors, and many of the seed, fertiliser, agrochemical and machinery support industries for the whole UK beet industry together with four major beet processing factories, a retail packaging unit and three R&D centres of excellence are all to be found in the region. The sugar beet industry and supply chain businesses are therefore of significant importance to the economy, and particularly the rural economy, of the East of England.

  The proposal to allow tariff and duty free access to the UK market by the 48 least developed countries (the EBA initiative) could result in a sugar quota reduction of up to 40 per cent. A reduction of this magnitude could seriously undermine the economics of sugar beet production and processing in the UK with the consequent threat to many of the jobs in this sector. The proposal could also impact adversely on those African, Caribbean and Pacific countries that currently export sugar to the EU. The EBA initiative together with the review of the EU sugar regime will have significant implications for the whole of the sugar industry. In view of the concentration of the sugar industry activities, the impact in the East of England is likely to be particularly severe.

  These are complex and inter-related issues and it is therefore important that the committees should consider the whole range of issues together. It is also important that adequate time is allowed for detailed consultation to enable all the issues to be thoroughly investigated and understood. The potential impact of the proposals should also be carefully assessed. These points are important in order to minimise the risk of irreversible damage to a vulnerable industry. When decisions are made, an adequate timescale for implementation should be allowed to enable the whole industry to adjust to the changes. Individual businesses, too, will need help and support during the period of change and the contribution the England Rural Development Programme can play to facilitate this process should be explored.

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