The world market challenge for the UK beet sugar industry

Sugar beet is an important mainstay of the arable rotation for those farmers who supply the UK crop. The home-grown industry found its origin in the wartime needs of selfsufficiency, but has since out-grown the aims of a government-owned corporation to become a highly efficient and dynamic example of innovation and technology in the food industry. Both growers and British Sugar have made huge strides through the consistent application of new technology during the past 60 years since the old 'Corporation' was formed from the then disparate group of former independent sugar companies. Sugar yields have risen markedly over time, although environmental pressures and climate change will require a continued focus on R&D to ensure sustainable production methods are available to meet the challenges that these issues pose. After government control was relinquished in the late 1970s, British Sugar was acquired by Associated British Foods and is nOw part of one of the largest agri-business groupings in the UK. Rationalisation of processing capacity has seen the original 18 factories reduced to just nine sites today, although continued investment has maintained throughput levels and raised labour productivity. Despite these efficiencies, the UK has only sufficient sugar quota to satisfy just over half its domestic consumption and contributes nothing to the exports of EU quota surpluses, which the industry is nevertheless required to fund through levies. Reform pressure, both from inside and outside the EU, will present increasingly greater challenges beyond the next review of the Sugar Regime in 2001, focusing the spotlight clearly on lower costs of production in both growing and processing. The result will be seen in further rationalisation of processing and lower support prices in line with a continued commitment to the GAIT Uruguay agreement to reduce import tariffs and export funding. EU expansion will necessitate further harmonisation which is likely to fuel this process.