Select Committee on Environment, Food and Rural Affairs Written Evidence

Memorandum submitted by the Norfolk Rural Economy Board (Shaping the Future) (O42)


  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.


  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.


  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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