Select Committee on Environment, Food and Rural Affairs Written Evidence

Memorandum submitted by G R Ward & Co (O5)

  G R Ward & Co is a family-run business established in 1946, farming 1,500Ha in Lincolnshire, with an annual turnover of £3,000,000.

  We employ 20 people and currently grow 300Ha of sugar beet on our own account, mainly on our own land, however we do rent land from adjoining farmers which is, therefore, of a benefit to our neighbours' rotations on their farms. We contract harvest 1,000Ha for other farmers in the area and contract drill 300Ha.

  In addition we clean, load and haul 60,000 tonnes of sugar beet into Newark Factory. We store 6,000 tonnes of sugar beet pulp for the British Sugar Corporation and they also have an on-site bagging plant which employs a further two people. The sugar beet related activities represent 30% of our annual turnover and the removal of sugar beet would, therefore, destroy a substantial part of our business, leading inevitably to redundancies.

  Sugar beet creates a wide diversity of cropping on our land as it leads to a varied rotation of sugar beet, followed by spring drilled cereals, which are then followed by winter cereals, thereby creating a varied environment throughout the year for all the birds and wildlife. Were we to stop growing sugar beet the cropping rotations would become a very much more monocultured system, ie winter rape followed by winter cereals, therefore denying the winter ploughed fields and over wintered stubbles which are so important for over wintering wildlife.


  1.  Whilst we accept the need for reforms in the sugar industry, we believe it to be in everyone's interest, including third world countries, that a fair and sensible price is maintained for sugar. Providing this is balanced and leads to a stable market and enables efficient industries to operate and continue to invest in the future.

  2.  We wish to see maintenance of supply management through quotas for domestic EU sugar production on equivalent measures for the ACP and LDC developing country suppliers with access to the EU market.

  3.  Compensation should be paid to sugar beet growers in line with how CAP reform measures have been applied for other agricultural products. This compensation should be partly coupled to take account of the interdependent relationship between growers and processors.

  4.  Changes should be phased in gradually over a 10-year period.

  Our recommendation is NOT "status quo", which we do NOT support but we do support the Option 1.

  5.  The Option 3

    —  Globalisation/Liberalisation would stop sugar production everywhere in Europe and eliminate developing country imports as well as the decimation of our own industry and local businesses.

  6.  The Option 2

    —  Price Reduction we do not believe would be sustainable because isoglucose production would continue to expand.

    —  Developing countries under EBA could import from the world market to supply their own domestic needs and export their own production to the EU, the result would be to drive prices even lower with disastrous consequences for all stakeholders.

    —  There is no evidence to suggest that lower prices would be passed to the consumer as this has not happened with other commodities recently liberalised such as world coffee production.

  7.  UK Background

    (a)  The UK sugar market is already equally divided between beet production and imported cane sugar from the ACP countries and LDCs.

    (b)  The UK beet sector does not produce surplus quota sugar exported onto the world market with subsidies.

      —  The UK beet industry is consistently amongst the highest productivity in Europe, supporting 20,000 rural jobs. Consumers are supplied with a product known to be grown to high quality social and environmental standards.

    (c)  If sugar beet ceases to be grown in this country, there will be a shortage of animal feeds produced in this country as by-products, ie sugar beet shreds and pulp nuts and winter grazing sugar beet tops, all of which would need to be replaced, possibly by imports.


    (a)  80% of global production is retained in domestic markets; therefore the existing world market is mainly a "dump" market and not representative of true production costs. Therefore world market prices would be extremely volatile if consumers relied on purchasing all their sugar from it.

    (b)  Brazil has increased its production by using a cross subsidy from the ethanol industry against a background of devaluation of their currency, which has tripled their competitive value in an unfair way.

18 March 2004

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