DEFRA agrees allocation of compensation for sugar growers and contractors

By Linda Rano

- Last updated on GMT

Related tags: United kingdom

The allocation of aid between UK sugar beet growers and contractors
will remain unchanged from the original proposal made in British
Sugar's application, despite suggestions it could have been
re-negotiated, said the UK Department of Environment, Food and
Rural Affairs (DEFRA).

Under the terms of the compensation package, British Sugar will receive 90 per cent and 10 per cent shared between growers and contractors, a spokesman for National Farmers Union (NFU) Sugar Board explained to Of the 10 per cent segment, 86 per cent of the compensation will be paid to growers and 14 per cent to contractors. NFU Sugar Board Chairman William Martin said: "The application process in theUKhas taken longer than most others acrossEurope. But we are relieved that all the pieces of the jigsaw are finally in place and we can have some certainty about how the 13.5 per cent quota renunciation, and the accompanying compensation, will be handled." ​ In March DEFRA said it was planning to re-open negotiations on how the 10 per cent should be divided. But the NFU, representing growers' interests, said it considered the move unlawful, since the application had been agreed. Also, re-opening talks would have added uncertainly and delayed the UK's compensation claims, it added. Compensation payments will be made in two stages; first in June 2009 and then in February 2010. The NFU is to write to growers explaining details of the agreement. Sugar reform progress ​ Plans for reform of the EU sugar sector were drawn up in 2005 and started to be implemented in 2006 with the aim of improving the competitiveness of the EU sugar sector and guaranteeing its long term future. Speaking at a seminar hosted by Danish firm Danisco earlier this month, EU agriculture commissioner Mariann Fisher Boel confirmed that 5.65m tonnes out of the target of 6m tonnes had now been given up, leaving a shortfall of just 350,000 tonnes. "This is a resounding success that will leave the sector leaner and fitter for the future," she said. Danisco ​ Danisco is planning to spin off its sugar division as a separate company or to sell it by the end of 2008. Its aim is to maximise development opportunities for both areas of activity, while giving shareholders the choice on whether to back sugar or ingredients.

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