Annex 3
BRITAIN'S BEET SUGAR SUPPLY CHAIN
A Report describing the Economic Impact of the
British Beet Sugar Industry in 2005 by Professor Peter Midmore
and Dr John Strak—June 2005
EXECUTIVE SUMMARY
This report aims to describe and to analyse
the British beet sugar supply chain in 2005 and to update the
employment and income generation effects found in an earlier report
in 1994. A key objective was to estimate the number of jobs directly
and indirectly created by the production and processing of sugar
beet to produce sugar and its co-products. An examination of the
quality of jobs involved in the supply chain was also undertaken.
The beet sugar supply chain directly involves
around 12,000 different firms—of which about 7,000 are farming
businesses.
Gross Value Added (GVA) per employee in the
sugar manufacturing sector is around £124,000—which
is about three times the average GVA per employee in food manufacturing
and more than twice the GVA per employee in the IT sector.
British Sugar is probably the largest single
customer for the engineering sector in the East of England region
with an annual spend of around £75 million. Likewise, its
spend on transport (£31 million) and contractors (£32
million) make it a major customer for many businesses, while farmers
receive over £250 million annually for the sugar beet they
supply to British Sugar.
British Sugar's operations extend well beyond
sugar beet processing and sugar production. Sugar beet production
on the farm leads to sugar production in the factory when combined
with inputs of R & D, engineering technology, chemicals, energy,
labour and management skills/technical know how. Co-products include:
reclaimed aggregates and topsoil (branded as TOPSOIL), lime (branded
as LimeX), high efficiency low carbon electricity supply to the
local grid, inputs for other industries such as molasses for fermentation
and beet pulp for the animal feed industry, tomatoes, and hi-tech
biotechnological extraction operations to produce betaine and
raffinate. Scientific and technological operations dependent on
sugar beet include Germain's beet seed pelleting operations and
the BBSRC Broom's Barn Research Station.
British Sugar's operations emphasise environmental
best practice through recycling, re-use, effluent control and
waste minimisation. Nothing is wasted that can possibly be re-cycled,
including even residual heat and CO2 used for tomatoes at Wissington.
While sugar beet contributes to the sustainability of arable farming
through its importance as a rotational crop.
The beet sugar supply chain information available
from British Sugar was utilised in a standard input/output methodology
that enabled the calculation of the number of jobs in, and associated
with, the beet sugar supply chain.
A recent estimate of c 6,600 jobs created in
the beet sugar industry, by the University of Cambridge (2004),
is rejected as being implausibly low and based on inadequate data.
We estimate that almost 13,000 jobs are created
directly and indirectly by the activity associated with the beet
sugar supply chain. This estimate rises to around 18,500 jobs
if the induced effects of employment in the beet sugar industry
are included. These estimates indicate that the beet sugar industry
has continued to improve its productivity since 1994, when an
estimate of c 23,000 jobs was made. The fall in jobs since then
has occurred without affecting the overall level of sugar output
and whilst several new co-products and services have been developed.
This implies that the investment in skills and technology in the
beet sugar supply chain has been both substantial and effective.
According to ONS figures, 55.4% of employees
in the UK sugar manufacturing sector have a higher education qualification.
This compares with 24.8% of the general population of working
age, 16.8% of the food and drink manufacturing sector in the UK,
13.7% of the food and drink manufacturing sector in the East of
England, and 8% of the industrial workforce with a higher education
qualification.
We assessed the quality of jobs in the beet
sugar supply chain by different methods. In the national approach,
the beet sugar industry is shown to create more jobs at higher
earnings levels than the food industry generally. In local comparisons,
an employee in a British Sugar factory has an 8 in 10 chance of
being paid above average earnings, compared with a worker outside
the factory gate who has only a 3 in 10 chance of obtaining above
average earnings. It is clear that the beet sugar supply chain
employs workers who are paid above average and who are highly
skilled.
British Sugar
September 2005
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