In a field in Norfolk, the sight of lush green leaves sprouting from the soil are giving farmer Ed Lankfer cause for optimism. “I think this is one of the best crops we have ever grown,” he says, surveying one of his fields of sugar beet. The signs are promising so far for this year’s harvest – known in the trade as a campaign – which takes place later than for other crops, during the autumn and winter. It would mark quite the turnaround from 2020’s terrible harvest, when bad weather and pests caused yields of the white sugar-yielding root to plummet by as much as 60%, leaving Lankfer with a £12,000 loss. Sugar beet has been grown on Lankfer’s 225-hectare (556-acre) family farm in the village of Wereham since his grandfather first introduced it in 1928, alongside other crops. However, recent years of falling prices, coupled with risks from weather and disease, have many farmers questioning whether there is a future in growing it. This is before growers feel the impact of post-Brexit trade deals with large sugar producers such as Australia. It’s a concern for Lankfer, whose land is in international trade secretary Liz Truss’s constituency. He has twice hosted her at the farm to answer questions from growers. British farmers hail sugar beet for its role in crop rotation and the timing of its harvest. “It’s a good break crop, and it spreads the workload over the winter,” says Lankfer. The destination of his beet is visible from the field itself: the factory at nearby Wissington where it is processed, eventually ending up in products such as Coca-Cola and Cadbury chocolate, or bagged and sold to consumers under the Silver Spoon brand.
The processing site is owned by British Sugar, a subsidiary of the Primark owner Associated British Foods. The company is in a powerful position: it is the sole customer of the UK beet farmers’ crop. Many consumers who drink fizzy drinks or eat sweet treats may not realise that beet farms located all over eastern England, across swathes of East Anglia up into Lincolnshire, produce enough to cover half of the UK’s annual sugar consumption of close to 2m tonnes. The remainder comes from overseas beet or cane, meaning any reduction in British output would increase reliance on imports. Tate & Lyle, the food company which was a prominent supporter of Brexit, only processes imported raw cane sugar, mostly from the tropics, which arrives by ship at its huge refinery beside the Thames in east London. Like the villain Voldemort in the Harry Potter books, some beet farmers refuse to mention the company by name, grumbling about how Tate & Lyle products are branded with a union jack by virtue of being processed and packaged, but not grown, in the UK. Imported raw cane sugar is often cheaper than British or European-produced beet, yet domestic sugar producers were protected by quotas and subsidies during the UK’s EU membership while tariffs restricted the amount of cane imported, which goes some way to explaining Tate & Lyle’s pro-Brexit stance. “It’s a perfect storm, whichever way you want to look at it,” says Michael Sly, an arable farmer in the fens of north Cambridgeshire, and chair of the National Farmers Union’s (NFU) sugar board, which represents growers in their annual contract negotiations.
Farmers’ relationship with British Sugar and ongoing price discussions are at the forefront of Sly’s mind, and that’s before he considers the longer-term challenges of a potential surge of imports following the UK-Australia free trade arrangement and future trade deals. One-year contract prices for sugar beet agreed between British Sugar and the NFU have been in steady decline for most of the last decade. Having peaked at just under £32 a tonne in 2014, the price has slumped by more than a third to hover at about £20 a tonne for the past few years. Farmers are still nursing losses from last year’s harvest, and feel there is an imbalance in power in their relationship with British Sugar, which reported a 17% rise in revenue and a pre-tax profit of almost £55m in the year to 29 August 2020, according to its most recent accounts. Amid mounting pressures, some beet farmers are calling time on the crop. “Many growers are now talking about what they call beyond beet, and unfortunately we think with the new market dynamics, the industry will get smaller in future,” says Sly. James Peck, who runs Cambridgeshire-based PX Farms, was until recently the UK’s third-largest sugar beet grower. “We were heavily invested in it and we were committed, but the price went down, down, down,” he says. After the last harvest, Peck decided he’d had enough. “I went to one of our farms, 600 acres of beet, and at the end of it we lost £12,000. I stood there and thought I’ve been here, working really hard, I’ve had the men working 15-hour days in the cold and wet, and we lost all that money.” Peck sold his sugar beet machinery and is now concentrating on other, more profitable, crops such as oats, which are used for increasingly popular non-dairy milk. British Sugar says it recognises that 2020 was challenging and it is offering NFU Sugar a minimum contract price of £25 a tonne in the current negotiations, representing a 23% increase on last year. “We’ve proposed an improved offer with economics that work for both us and growers,” says Paul Kenward, managing director at British Sugar, adding that the company has launched an assurance scheme for farmers affected by yellowing viruses that can spoil the crop. “I am very confident about our future as an industry. We have great people, growers and customers that want to buy homegrown British sugar,” Kenward adds.
Even if beet prices improve, growers are fearful of the prospect of Australian sugar flooding the market as a result of the trade deal. Beet farmers feel they have been overlooked, but expect to be affected just as much as sheep and cattle farmers, located predominantly in Wales and Scotland. “All the signs are that for sugar actually it’s a tighter transition [than for lamb and beef],” says Sly. He calculates that, under the deal as it stands, by the end of the transition period in 2030 “there will be an additional 240,000 tonnes of tariff-free sugar into the marketplace”, equivalent to a quarter of the UK’s domestic sugar production. After the transition period, there will be no limit to how much Australian sugar can be imported.
Domestic growers feel unable to compete with the scale of Australian farms, where 30m tonnes of sugar cane were harvested in 2019-20, according to the Australian Bureau of Statistics. Sly points out that large sugar cane-producing nations also use certain pesticides that are no longer allowed in Europe. Back in Norfolk, Lankfer doesn’t plan to stop growing sugar beet, though his recent meeting with Truss only went some way to allaying his concerns. “She explains herself well, but after the meeting there were lots of ‘what ifs’. What if Australia falls out with China, and then Australia floods our market, which could happen with sugar?” Lankfer says. “My future is in her hands.” A Department for International Trade spokesperson said on Thursday: “The UK’s highly competitive sugar sector is one of the best in the world. We have always been clear that we have red lines in our trade negotiations which ensure UK goods are defended from unfair competition.” • This article was amended on 7 September 2021. It was imports of cane sugar that should have been referred to in the article, rather than sugar cane as an earlier version said.