THE BEET SUGAR MILLIONS
" . ; Since, however, on review of all the facts put before us we are unable to find positive justification for the expenditure of a sum of several millions per annum on an industry which has no reasonable prospects of ever becoming self-supporting and on the pro- duction of a crop which, without that assistance, would, at present sugar prices, be practically valueless, we cannot recommend the continuance of assistance." THIS pregnant sentence from the majority report of the United Kingdom Sugar Industry Inquiry Committee sums up the result of a long and painstaking inquiry. There is nothing surprising in the conclusion except that fifty-five meetings and special investigation by accountants should have been needed to reach it.
What are the facts as to the sugar consumed in this country ? It is made up as to 25 per cent. of home produce and 35 per cent. from Empire sources, the remaining 40 per cent. coming from outside the Empire. Foreign raw sugar costs 4s. 5d. per cwt., sugar from beet 18s. There are at present eighteen factories in operation in Great Britain, 400,000 acres under beet, 46,000 growers, many of them working on a very small scale indeed, and the average production in each year of bright sunshine has been less than ten tons to the acre.
As commentary on the campaign already being organized in support of an essentially indefensible mis- use of public funds, a few further facts are to be noted. The percentage of beet to arable in Great Britain is 3.3 and to total crops and grass 1.36. The chief sugar- beet area is found in Norfolk, Suffolk, Lincolnshire and the Isle of Ely. Out of 400,000 acres 250,000 are there ; in the past three years this section of England has been responsible for two-thirds of our sugar-beet production. Those who protest that the East Anglian farmers will be ruined by a withdrawal of a subsidy which has dealt far more generously with great capitalistic interests than with them may be reminded that when the subsidy started in 1924 there was no payment for wheat-growing. Its introduction is calculated to benefit Norfolk, Suffolk, the Isle of Ely and the larger part of Lincolnshire considerably.
The suitability of these islands for beet production has gone unquestioned, but Holland, Belgium, France and Germany (in the order named) can produce better crops ; in fact, Holland, whence come Dutch financiers and second-hand machinery for English factories, produces nearly 50 per cent. more beet to the acre ; it has taken ten years and some exceptional summers to raise our average yield from eight tons to nearly ten. Since 1924, the total subsidy, with abatement of duty, has so far cost the Exchequer (according to Sir Herbert Samuel, whose statement was made in the House of Commons and went unchallenged) £47,000,000, and the 1934-35 figure is put by the Greene Committee at over £7,000,000. The factories claim to have employed rather more than 2,000 regular, and perhaps 6,000-7,000 seasonal, workers. The best conducted of these establish- ments, those run by experts, are indeed in an enviable condition ; the total State assistance just about equals the amount paid for beet raised on English soil. The Cantley factory on a capital of £500,000 had paid gross dividends of nearly £1,000,000 down to March, 1234 ; Ely, with £450,000 , capital, had paid £545,000, Ipswich, with £400,000; had- paid £420,000 ; these are the " Dutch Group " factories. The United Sugar Company of the, Bury Group had paid £894,000 on a capital of £300,000. These then are some financial results of the British Sugar Subsidy Act passed in March, 1925, and made retrospective. Though . the assistance has fallen from 23s. 8d. cwt. in the first year to 12s. in 1984, the latter figure must remain as hard to justify as the former.
There is no doubt, of course, that the subsidy has resulted in larger employment and a closer and better cultivation of the land and a definite lightening of the depression so long prevalent in East Anglia. Sugar beet demands and repays heavy dressings ; the tech- nique of production is improving year by year ; manu- facturing costs have dropped by nearly 60 per cent. ; but the fact remains that an acre of best beet grown in England under most favourable conditions of soil and sun will not yield one half of the sugar that an acre of cane from the sugar plantations of the British Empire has to offer. The actual market value of sugar produced in 1933 was not 50 per cent. of the amount paid by the Government to assist in its production. Foreign capitalists were quick to grasp the prospects that this departure from common sense and sound finance held in store, and 30 per cent. of the money in the sugar beet industry is said to have been supplied from abroad, over £1,000,000 worth of machinery, not all of it new, coming from the same source. Among the directors of the English Sugar Beet Corporation are that great expert, Mr. J. P. Van Rossum, and others from Holland. One of the firms with a large interest in British Sugar Manu- facturers is the Czechoslovak armament firm of Skoda. Less than two years ago the Dutch Group of four factories was showing a profit of £2,500,000 on an issued share capital of less than £2,000,000.
It is impossible to trace in detail the ramifications of this vast undertaking. which has dealt a crippling' blow to Empire trade in cane sugar and has ensured an outlet for the home-grown product at three times the market price. It is now suggested in certain quarters that a levy of 2s. 4d. per cwt. on imported sugar, or all sugar, should be introduced for the benefit of home producers in place of Government subsidy. In ten years this would produce nearly £50,000,000 for sugar factory shareholders and others, mainly at the expense of the consumer. The desire of the sugar interests so to entrench themselves is intelligible enough, but sugar- consumers, whether manufacturers of confectionery and other commodities or humble householders, will be strangely apathetic if they fail to make the strongest protest against such a project.
The least satisfactory side of the whole affair is that the agricultural labourer and the small farmer have been brought in to reinforce the argument for the subsidy. How, in fact, does it stand with them ? As we showed last week, it would be actually an economy to abolish the subsidy and settle each labourer on the land at a cost of £750 a head. Alternatively, we might borrow a striking calculation from Sir Herbert Samuel, who, speaking of the subsidy for 1930-31, which was upwards of £6,000;000, pointed out that for that money (a) agricultural workers employed on sugar beet could have been paid £2 a week, and (b) sugar factory workers £8, both for doing nothing, (c) 'a subsidy of £3 per acre could have been given to farmers to grow other crops. and (d) at the same time there would have been some £3,000,000 left to buy sugar and present 'it to the public. These figures would require some revision' today, but not a great deal. • There must, of course, be a reasonable process of tran- sition. No one would suggest that the beet sugar subsidy should' be withdrawn in toto without. warning to farmers and fa'ctories. The • majority report of the Greene Com-- mittee recognized that fully. But the end of the subsidy ought to be • announced definitely and decisively. The factories can make little claim for consideration. They have had their reward—and on a lavish scale. The far- • mer, on the other hand, has to make his adjustments and he must be given reasonable time for that. The general principle of assistance to the agricultural industry is not in question. All that is involved here is a resolve that assistance on_an intolerably profligate scale, to encourage the production of a commodity with which the world, even without an ounce of the English beet-crop, is over- stocked, shall end, and the public money thus saved be invested in accordance with the dictates of rational economics.
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