Memorandum submitted by the Norfolk Rural
Economy Board (Shaping the Future) (O42)
NOTE
Shaping the Future is the economic partnership
within Norfolk, representing Norfolk County Council, local authorities,
education and a wide range of business interests. It seeks to
improve local employment prospects; increase local business profitability;
provide long-term strategic planning and establish priorities;
while ensuring that the county retains its essential character
and qualities. It is designed to make informed decisions and share
resources to deliver actions. The Rural Economy Board has been
established by Shaping the Future in recognition of the importance
of this sector to Norfolk's overall economy; its particular concerns
are the agricultural and food processing industries.
EXECUTIVE SUMMARY
Sugar production is of fundamental importance
to Norfolk's rural economy. The county has 30% of the national
sugar beet area, two sugar processing factories and extensive
economic activity generated through the supply of haulage and
other services. It makes a considerable contribution to employment
levels with a range of skills; to farm and associated business
sustainability; and to biodiversity.
On the proposed reform of the European Union
sugar regime, Shaping the Future's Rural Economy Board supports
the adoption of the European Commission's Option 1, as being the
only one that will give local stakeholders an opportunity to survive
and possibly prosper. The Board believes that the UK's present
position in relation to sugar production and marketing demonstrates
responsibility and a fair balance between domestic and overseas
producers.
The industry has an established environmental
and social awareness. It has the potential for further and innovative
development. Its survival will make a significant contribution
to the sustainability of Norfolk's economy and the Rural Economy
Board urges the UK government to stress these points vigorously
when negotiating the future of the industry with the European
Union.
SUBMISSION
1. Sugar production is extremely important
to Norfolk's economy. Changes to the sugar regime will impact
upon Norfolk's economic, social and environmental sustainability.
2. Economic. Some 30.3% of the British
sugar beet crop is grown here on 1,876 farms, with currently (2002
DEFRA Agricultural Census) a total of 51,223 ha. With a rotation
allowance of four years between crops, sugar beet determines cropping
programmes and yields for 205,000 ha of arable land in the county—67%
of the arable area. It is thus a mainstay of Norfolk farming,
of fundamental and crucial significance.
Extrapolations from University of Reading figures
for employment in the sugar sector suggest that there are in the
region of 5,500 jobs dependent on sugar beet production, transport,
etc (but not processing—see below) in Norfolk.
3. There are two sugar processing factories
in Norfolk (at Cantley and Wissington), providing full-time employment
for 260 people and part-time jobs for 225 more, with an additional
500 employed as direct contractors supporting these plants. The
Committee should note that Wissington has a catchment area that
includes parts of Cambridgeshire, Lincolnshire and Suffolk as
well as Norfolk.
4. Social. Jobs in the sugar beet-related
industries are generally mechanised, with higher skills and pay
levels than many in the fresh produce and food processing sectors.
Recent research has highlighted low pay as a major concern in
rural employment in Norfolk. The beet industry ameliorates this
to some extent and its contribution towards limiting social exclusion
is significant.
5. Environmental. Sugar beet as
a crop contributes to Norfolk's biodiversity, allowing over-wintering
of stubble and providing a habitat that is distinctive from the
all-pervading cereals that would be most likely to replace it
within a rotation. Beet and its cultivation also improves soil
structure.
6. Regional considerations. Maintaining
sugar production and processing in Norfolk contributes towards
the objectives of the Sustainable Development Framework for the
East of England (adopted by East of England Development Agency,
East of England Rural Affairs Forum and Government Office for
the East of England on behalf of the Government). These include:
maintaining a viable agricultural industry; encouraging local
provision of, and access, to jobs; protecting the biodiversity
of rural areas; and growing the "green economy".
7. Change. Local sugar-beet growers
are anxious about the future, facing as they already do substantial
changes and income reduction following the Mid Term Reform of
the EU Common Agricultural Policy. These are due for implementation
in 2005. Farmers do however accept the inevitability of change,
including the likelihood of some reduction in price.
8. In our view, any changes should enable
efficient growers to make reasonable profits from growing the
crop, albeit there may be an overall reduction in the national
tonnage produced. We would not oppose measures which concentrated
production in the most agronomically suitable and efficient areas,
especially those, such as Norfolk, where there is already an efficient
and environmentally-aware infrastructure.
9. Preferred option. In this regard,
only the Commission's Option 1 comes near to meeting the needs
of local producers, the processing industry and the wider community.
It maintains supply management. It advocates
responsible reforms and a rationalisation of the European sugar
sector, while maintaining a level of supply management adequate
to ensure a stable market and imposing similar measures on preferential
developing country suppliers. As such, these measures would represent
a progressive and sustainable reform of the sector, while not
being a mere maintenance of the status quo.
However, we would support two further modifications:
(i) a phasing-in of changes to allow farmers
time to adjust; and
(ii) compensation in line with CAP MTR as
applied to other agricultural products, providing that this includes
an element of partial coupling to reflect the interdependence
of growing and processing.
10. Rejected options. Options 2
and 3 would lead to the destruction of the local sugar Beet industry
and are unacceptable. Locally, they would lead to a significant
reduction in Rural Industry Gross Domestic Product, leading to
a widespread reduction in rural employment across a range of related
industries. In many of the rural areas affected, such as Norfolk,
little alternative employment opportunity exists. Biodiversity
would be reduced.
Nationally and strategically, they would leave
the UK exposed to very volatile sugar markets, at the end of long
and vulnerable supply routes. They would also leave the UK without
a basis for developing biofuels, with their associated CO2 emission
benefits
Internationally, increased world production
of cane sugar would lead to further pressure on rainforest areas,
substantially increased food miles and allied environmental degradation.
11. The UK case. We would urge Defra
to press the UK sugar industry's case most strongly and with utmost
vigour to the European Commission. In this regard, we consider
the following points relevant and powerfully supportive of the
UK's position as being responsible, concerned and aware of its
obligations:
— The UK already shares its sugar market
equally between domestic growers and those from ACP countries,
LDCs and beneficiaries of the Everything But Arms agreement. The
UK is the only major EU sugar-producing country which can claim
this degree of access to cane producers.
— The UK domestic sugar market is in
balance between supply from both beet and cane and domestic consumption.
— UK domestic producers do not produce
surplus sugar for subsidy-supported export.
— Levies collected from UK beet producers
do, however, support subsidised quota exports from other EU Member
Sate producers.
— The UK beet industry has made substantial
and sustainable improvements to its productivity and efficiency
over the past 20 years.
— The industry has been a responsible
contributor to meeting UK environmental and social standards,
and to increasing biodiversity.
— UK sugar consumers (including food
manufacturers) have confidence in the quality and provenance of
the local product, backed as it is by comprehensive and strict
assurance protocols.
— Recent UK government decisions not
to allow commercial growing of genetically modified sugar beet
will allow manufacturer and consumer choice over GM sugar inclusion.
GM-free beet sugar would not be widely available if the UK became
dependent on imports from world markets and its sourcing would
lead inevitably to higher consumer prices.
— The sugar processing industry has
the potential for forming the basis of an innovative and environmentally-friendly
biofuel industry, providing employment at a range of skill levels
and maintaining the biodiversity inherent in mixed-cropping regimes.
— The sugar beet industry is an essential
component of Norfolk's rural economy both in terms of widespread
employment impact and environmental impact.
30 March 2004
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