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.
OUR RECOMMENDATION:
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.
WORLD BACKGROUND
(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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