exiting a british sugar contract

[Dan Attle]

asking for a friend.... anyone ever left a 3 year contract with 2 years left to run cant see beet getting any better next year without a cold winter or neonics
thoughts please

 

[Ruston3w]

asking for a friend.... anyone ever left a 3 year contract with 2 years left to run cant see beet getting any better next year without a cold winter or neonics
thoughts please

That's a coincidence, I have a friend who wished he hadn't two more years to go......of course if he sticks to his contract they may sort it? A contract is a contract after all , I signed up thinking it would go one way or the other in 3 years and should see it through.
Richard.

 

[Daniel]

Why worry when the director has some warm regards for you?

A message from Peter Watson, Agriculture Director​

Dear Grower As the country enters another lockdown, for those of us within Agriculture and key workers, we continue to keep our heads down and do the job in hand. So first and foremost, I want to say thank you for all your hard work and effort; we appreciate everything you are doing to ensure the factories remain supplied with beet. I want to take a moment to reflect on the lay of the land. The weather has, quite frankly, been erratic and it’s making campaign a real challenge. Couple that with what we’re going through with Virus Yellows, and the fact that some of you are having to manage late-season Cercospora, too, we appreciate how it feels when your yields take a hit. Please take comfort in knowing the contract performance rules will not be applied to the 2020-crop results. Similarly, this year’s yield performance will not count towards the five-year averages for next year’s Virus Yellows Assurance Scheme and will be discounted from your 5 year average, in consideration of future planning yield. Also know that your British Sugar Contract Manager is always available to support you in all aspects of the sugar beet crop. Although I can’t control the weather, there are other areas where we are working hard for the long-term sustainability of our homegrown sugar industry. Together with NFU Sugar and BBRO, we’re maintaining regular dialogue with Government on the challenges our industry faces, including advocating for a level playing field. We’ll share more on this in the coming weeks and months. And whilst I talk of support, the challenges for farming across all sectors, as well as responding to COVID-19, can lead to far-reaching implications, both financially and emotionally. In these extremely trying times please know there is professional support available for you and your families. We’ve provided links to a handful of organisations for your awareness. On a final note, whilst we don’t know what the latest lockdown will mean for us all as we head towards the festive season, I hope you get some quality time with family and friends. Please take care and stay safe. Warmest regards Peter Watson Agriculture Director​

 

[Flat 10]

asking for a friend.... anyone ever left a 3 year contract with 2 years left to run cant see beet getting any better next year without a cold winter or neonics
thoughts please

They might ask you to pay them equivalent value of the beet? Not sure whether they will bother to enforce or not....

 

[teslacoils]

Just remember in two years time, when they suddenly come up with some kind of wonder offer, that bs really, really don't give a damn about you even if you've grown for 80 years.

 

[B'o'B]

It would be interesting to ask your fieldsman what area they think you should plant to ensure you meet your quota Next year.
Ive just had a quick read through the IPA and to me it looks like the only recourse BS has would be to reduce your tonnage going forward and force you to buy at least some seed.

 

[Breckland Boy]

It would be interesting to ask your fieldsman what area they think you should plant to ensure you meet your quota Next year.
Ive just had a quick read through the IPA and to me it looks like the only recourse BS has would be to reduce your tonnage going forward and force you to buy at least some seed.

To be eligible for the virus scheme, the area needed is the offer/ contract tonnage divided by the growers 5yr average adjusted yield. 5 Yr average can be found on the BS webpage. This years crop will not count in the 5yr average.

 

[B'o'B]

To be eligible for the virus scheme, the area needed is the offer/ contract tonnage divided by the growers 5yr average adjusted yield. 5 Yr average can be found on the BS webpage. This years crop will not count in the 5yr average.

If OP is giving up beet they’re not going to be too worried about missing out on the virus scheme

 

[Breckland Boy]

If OP is giving up beet they’re not going to be too worried about missing out on the virus scheme

Nfu sugar sent out a mail last week suggesting if you have part of a 3 year contract remaining BS expect you to honour it. However, I agree just buying seed may be enough under the IPA.

 

[ih1455xl]

There must be a break clause in the contract what if you cease trading and start up under a new name?

 

[B'o'B]

Nfu sugar sent out a mail last week suggesting if you have part of a 3 year contract remaining BS expect you to honour it. However, I agree just buying seed may be enough under the IPA.

Yes I read that, which made me wonder exactly what penalties were in the contract for none delivery.

To me (and I am wholly unqualified in contract law) if you returned your seed order form with 1 unit of the cheapest seed ordered in the remaining years and pay for the seed, you have honoured the minimum requirement of the contract (although probably worth returning the Crop Area Declaration on time as well). There are no penalties, which I can see, other than reducing a growers quota that BS have available to them under the IPA, which does govern the 3 year contract as well as the 1 year contract.

There is no provision for BS to recoup monies for beet not delivered or provision to force a grower to buy in beet to make up a shortfall.

It may be worth the OP asking NFU Sugar what the minimum requirement to meet their contract obligations would be, and if serious about giving up possibly getting a second opinion from a contracts law specialist.

 

[Hindsight]

Yes I read that, which made me wonder exactly what penalties were in the contract for none delivery.

To me (and I am wholly unqualified in contract law) if you returned your seed order form with 1 unit of the cheapest seed ordered in the remaining years and pay for the seed, you have honoured the minimum requirement of the contract (although probably worth returning the Crop Area Declaration on time as well). There are no penalties, which I can see, other than reducing a growers quota that BS have available to them under the IPA, which does govern the 3 year contract as well as the 1 year contract.

There is no provision for BS to recoup monies for beet not delivered or provision to force a grower to buy in beet to make up a shortfall.

It may be worth the OP asking NFU Sugar what the minimum requirement to meet their contract obligations would be, and if serious about giving up possibly getting a second opinion from a contracts law specialist.

B'o'B while I concurr with do growers trust NFU Sugar committee? A nasty thing for me to say, but say it has to be said and asked.

What growers are suggesting is not growing the beet. In my little patch I know of growers on three year contracts that do not want to grow the beet and would give it a miss, unless there is a neonic treatment. I reckon we could be talking millions of tonnes, and if sufficient growers do this action it in effect places a significant financial loss on BS, as they have no beet to process. Would ABF stand by and allow that to run.

The NFU Sugar committee could be put in a very difficult place condoning such action. I cannot answer that question. So in my humble opinion growers want to take such action my want to take QC opinion on the contract independent of NFU Sugar.

Your thoughts?

Of course George Eustace and the Conservative Government could solve this issue in a moment.

 

[teslacoils]

Thing is, given the retained nfu lawyers fees, surely they already know what the penalties / minimum requirements of the three year contract are , and as a members organisation should be able to give you growers the answers you need - after all, they are supposed to be working for you .....rather than for British sugar.

 

[B'o'B]

B'o'B while I concurr with do growers trust NFU Sugar committee? A nasty thing for me to say, but say it has to be said and asked.

What growers are suggesting is not growing the beet. In my little patch I know of growers on three year contracts that do not want to grow the beet and would give it a miss, unless there is a neonic treatment. I reckon we could be talking millions of tonnes, and if sufficient growers do this action it in effect places a significant financial loss on BS, as they have no beet to process. Would ABF stand by and allow that to run. I doubt it.

The NFU Sugar committee would be put in a very difficult place condoning such action. I cannot answer that question. So in my humble opinion growers want to take such action my want to take QC opinion on the contract independent of NFU Sugar.

Your thoughts?

Of course George Eustace and the Conservative Government could solve this issue in a moment.

That’s why I also suggested seeking a second opinion, I don’t completely trust NFU sugar either. Although it would be interesting to see what answer they came up with as to what the minimum requirements to fulfill the contract are as it appears to be well laid out in the IPA.

BS imposed a large loss on my business without a second thought in 2011! When they could have processed my beet at Bury, but they had moved my contact to Newark a couple a years earlier and Newark couldn’t cope with it, they refused to allow me to send my beet into Bury. (It’s a long story that’s not worth revisiting here.)
If the contract doesn’t allow BS to impose meaningful financial penalties on someone giving up beet then that is what they agreed to when they negotiated the IPA. BS have had it their own way for too long and the IPA now reflects that, in that BS never foresaw a situation where droves of farmers might want to drop growing beet all at the same time. I have little sympathy for BS. It’s the hauliers, contractors and farmers I feel sorry for. Had BS acted with a more sympathetic attitude when I was dealing with them I would have more sympathy for them now!
As I said at the time “for a company that deals in sugar they don’t half leave a bitter taste when you deal with them!”

 

[DrWazzock]

If you sign a contract you sign a contract. You just have to be careful what you sign.
If it was the other way round and BS reneged and wouldn’t take the beet what would people be saying.
I didn’t sign, but not really entirely because of the virus. Personal circumstances. I could see beet maybe having a 50/50 chance of coming good next year with a cold winter and kinder spring.
If I had spent on infrastructure and kit and had a system that is in place and working on a reasonable scale I wouldn’t be throwing my hat in yet, annoying as the virus problem may be.

 

[deleted user 837354]

Buy the seed, 'give' it to someone else or grow food for animals with it?

BS have been this way for years. They know that they will be able to extract more and more sugar from the crop as technology improves so they actually need all their growers less and less. It's a circus.

 

[B'o'B]

If it was the other way round and BS reneged and wouldn’t take the beet what would people be saying.

I feel that in 2011 BS did renege on their end of the contract, so I stopped dealing with them.

I’m not suggesting reneging on the contract, but if your business is going to suffer badly by going all out to fulfill the contracted tonnage it is a sensible business decision to see what the minimum requirements of the contract is. If the shoe was on the other foot BS would have a team of lawyers looking for ways out.

Since 2011 BS have pushed even more risk onto growers and at the same time squeezed the price as hard as they dare.

Is it my imagination or did the contracts come out early this year? I bet if they offered £40/t to all growers for next year then very few would drop out!

 

[farmerfred86]

we’re maintaining regular dialogue with Government on the challenges our industry faces

I think it all comes down to this "dialogue with government". Contract managers will be reading this forum/thread and they will be well aware what growers are thinking. They aren't idiots and they wont just be sat around hoping for the best.

 

[robbie]

Having read this thread and others on here along with chatting to fellow beet growers there is definitely a watershed moment approaching.

I think BS will do what they can to maintain a competitive sugar industry in this country but what will really be interesting to see is what the true colours of NFU sugar are over the next few months.

Theres a lot of growers who want out of there contracts for next year and I'll put money on the NFU siding with the BS, itll confirm what we all suspected for a while that they are indeed in the pocket of BS and not truly working for the grower.

 

[farmerfred86]

Having read this thread and others on here along with chatting to fellow beet growers there is definitely a watershed moment approaching.

I think BS will do what they can to maintain a competitive sugar industry in this country but what will really be interesting to see is what the true colours of NFU sugar are over the next few months.

Theres a lot of growers who want out of there contracts for next year and I'll put money on the NFU siding with the BS, itll confirm what we all suspected for a while that they are indeed in the pocket of BS and not truly working for the grower.

I think that's a little harsh... at the end of the day NFUS still want a viable BS and they have to work together. There is no point demanding £30/t and crying when they don't accept.