British Sugar and the NFU have agreed new one and three-year sugar beet contracts for 2021 and 2021-23. For the first time there is compensation for Virus Yellows disease loss and a pilot project to link returns to sugar futures prices.

The base contract prices are equivalent to those in the 2020 contract. The one-year 2021 contract will pay £20.30 per adjusted tonne, with a market bonus should the adjusted EU reference price exceed €375/tonne. The bonus is worth 10% of the value above this level.

The 2021-23 contract pays £21.18 per adjusted tonne, with a market bonus if the adjusted EU reference price exceeds €400/tonne. The bonus would pay growers 25% of the value above this level.

British Sugar will introduce a Virus Yellows crop assurance fund from 2021. The three-year, £12 million fund will cover all new and existing contracts, and is designed to compensate growers for a proportion of yield losses through the disease. The mechanism kicks in where a grower delivers less than 90% of the contracted tonnage (the first 10% of lost yield acts as an excess), subject to planting a sufficient area and certain other conditions. British Sugar will pay 45% of the value of the shortfall to a ceiling of 35% yield loss.

The company will trial a new futures-linked contract to a pilot group of up to 100 beet growers, who can allocate up to 10% of their tonnage, for the 2021 crop. It says growers will have access to the sugar futures market for the first time in the UK, in order to decide when to fix the price of beet on this contract.

“Our new contracts offer a competitive support package for each and every grower, which sees a fair price, market-linked bonuses, and flexibility and innovation,” says British Sugar agriculture director Peter Watson. “Given the difficulties many growers have faced in recent months with aphids, we are particularly pleased to offer our new Virus Yellows assurance in the contracts, to help support growers through the challenges of the disease.

“Growers will also continue to see investment in the future of the sugar industry, through science-led advice and guidance from the BBRO, innovation in seed technology, and industry-wide advocacy for plant protection products and future breeding techniques.”

• Sugar beet seed prices for 2021, as agreed by the joint British Sugar and NFU Sugar Seed Working Group, will be released shortly, with British Sugar predicting an average saving of some 5% on grower seed costs. Seed can be ordered online from September 10th.