NFU remains opposed to raw cane sugar ATQ

Following a period of consultation, the government has announced its decision to maintain the ATQ for raw cane sugar at its current volume of 260,000t for 2025.

It has also committed to review the process for determining the ATQ and related considerations for 2026 and beyond.

Read the announcement in full at: GOV.UK | Government response to the review of the UK’s raw cane sugar ATQ and related considerations.

NFU position

The ATQ constitutes a significant threat to the UK beet sector in pitting it against world sugar produced in ways which are often illegal here in the UK.

The government’s decision again asks homegrown beet growers to go toe-to-toe with major producers such as Brazil, which benefit from a competitive advantage derived from regulatory divergence with the UK.

Allowing such sugar to enter the UK market tariff-free simply exports the environmental footprint of production while undercutting domestic producers.

Removal is the only long-term position, in respect of the review of this ATQ, which sufficiently protects UK sugar beet growers from the threat posed.

NFU Sugar Board chair Michael Sly said: “We continue to consider a zero-tariff quota for raw cane sugar highly concerning, unjustified, and unnecessary.

“As recently as August, the government committed in its ‘new deal for farmers’ that we would not be undercut by low standards in trade deals.

“British sugar beet growers are some of the most efficient in the world but allowing tariff free access to sugar from any country, produced in ways that would be illegal in the UK, simply undercuts them. This quota system also undermines the existing preferential access granted to developing countries.

“We remain fundamentally opposed to an ATQ for raw cane sugar, regardless of its size.”

The NFU has submitted its response, highlighting the threat the raw can sugar ATQ poses to the UK sugar beet sector.

The homegrown sugar beet sector is one of the most efficient in the world and over the last 15 years boasts yield enhancements of over 20%.

It is committed to continually improving both its efficiency and environmental footprint guided by the research and development conducted by the independently industry funded BBRO (British Beet Research Organisation).

In supressing the domestic sugar price, the ATQ devalues UK sugar beet, limiting investment in the sector and reducing resilience to future price and supply shocks.

Any reduction to the UKGT would have a similar effect to the ATQ in facilitating reduced cost imports of raw cane sugar from anywhere in the world.

Impact on wider government policy

The government is committed to supporting the development of ACP (African, Caribbean & Pacific) and LDCs (Least Developed Countries) through its preferential trade agreements.

However, the ATQ has led to the near total displacement of imports from ACP/LDC countries in favour of imports from Brazil.

Between 2020 and 2023, imports from ACP/LDC countries contracted by 73% while imports from Brazil during the same time frame increased by 206%.

Any extension of the ATQ or reduction in the UKGT would not only further undermine government policy regarding developing country trade, but fundamentally weaken its position in future trade negotiations in devaluing access to the UK sugar market.

The impact of this would likely be felt beyond the sugar sector with concessions on other sensitive agricultural lines likely sought by prospective trade partners instead.

NFU view

The NFU believes that there are sufficient quantities of sugar available for the UK market via domestic production and existing trading partners with free trade or preferential agreements.

Any raw cane sugar ATQ, regardless of size, or reduction to the UKGT would simply function as a back door to the domestic market for imported sugar owing its competitive advantage to having been produced in ways which are illegal here in the UK.

The government has launched a wide-ranging consultation regarding the raw cane sugar ATQ and the UK GT on raw cane sugar.

Introduced in 2021, the ATQ allows tariff-free access for 260,000t a year of raw cane sugar into the UK from anywhere in the world. The government had committed to conduct a full review of the ATQ by the end of 2024.

The consultation seeks stakeholder views regarding the potential extension, expansion, reduction, or removal of the ATQ as well as the implications of any changes to the UKGT.

This follows, and is separate to, a snap consultation in 2023, where the government proposed an increase to the volume of the raw cane sugar ATQ for the remainder of the 2023 calendar year.

The government decided not to expand the ATQ, a decision which was welcomed by the NFU.

Find out more at: GOV.UK | Review of the UK’s raw cane sugar ATQ and related considerations.