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Ongoing neonicotinoid ban to drive future sugar beet yield down and prices up
The 2023 EU blanket ban by the European Court of Justice (CJEU) on neonicotinoid pesticides means farmers are now planting fewer sugar beet crops and producing smaller yields, reducing supply and increasing the price of sugar. Against the backdrop of the high tariffs the EU places on most non-EU sugar imports, what will the ultimate impact be for the food and beverage industry?
What are neonicotinoid pesticides?
Neonicotinoids are insecticides used to protect sugar beet from the three types of virus yellows: beet yellowing virus (BYV), beet mild yellowing virus (BMYV) and beet chlorosis (BChV). These viruses are transmitted by aphids, which means they can spread rapidly, having the potential to devastate entire beet fields in just a matter of weeks.
Neonicotinoids are very effective against virus yellows, but they have long been linked to the decline of bees and other pollinators. As a result, the use of neonicotinoids was banned by the European Union in April 2018, with temporary derogations permitting farmers to use them in ‘emergency situations’ where ‘threat to plant production cannot be contained by any other reasonable means.’
When sugar beet seeds are coated with neonicotinoids, it fills the plant with the substance, so it provides all over protection, protecting the beet, yields and sugar production. However campaigning groups argue that seed spraying is not necessary as it’s performed before the plant exists and therefore before the farmer knows whether the aphids are present. Once absorbed into the seed, the entire plant becomes toxic to all insects, including friendly ones.
But crop seed industry experts claim that seed coating is actually less toxic to the environment because it allows farmers to use fewer, less poisonous chemicals rather than larger amounts of a spray on the whole crop.
On top of the neonicotinoid ban, late planting this year as a result of wet weather across the EU means the threat of aphids and disease is even greater than usual. Because there is no alternative for neonicotinoids, if they can’t be used for 23/24 plantings, the outlook for EU sugar beet looks bleak. On French farms that didn’t use neonicotinoids in 2020, virus yellows destroyed 31% of the crop, and the most affected farms lost 70% of their harvest.
Why is the ban necessary?
In December 2013, EU leaders prohibited the use of three neonicotinoid pesticides in order to protect honeybees. In May 2018, they further restricted the use of neonicotinoids, allowing them only in permanent greenhouses.
EU farmers responded by reducing their sugar beet acreage every year since 2017. Since 2018, about 15 Member States received 74 neonicotinoid emergency derogations. Over half of those were for sugar beet crops, saving many harvests and livelihoods. But on 19 January 2023, the European Court of Justice (CJEU) ruled against temporary emergency authorisations, or derogations, for use of banned neonicotinoids.
However, the ruling came as France and Austria were in the process of getting an emergency authorisation for 23/24. The Czech Republic, Spain, Croatia, Hungary, Romania, Lithuania, Slovakia and Finland had previously been granted a derogation for this year’s harvest, while Belgium, Poland and Germany decided not to allow seeds treated with neonicotinoids.
Despite the UK being able to set its own laws since Brexit, there is an overall ban on neonicotinoids which resulted in 25% of the national sugar beet crop being lost in 2020. However, Defra will authorise emergency use of the insecticide if independent modelling predicts a virus incidence of 63% or above, but even then, only for a short period of time.
The threat to beet sugar production
While some farms across the EU and UK managed to slip through the ban on derogations before it began and will be using neonicotinoids this year, many didn’t, so two threats to beet production remain. First, the impact of the disease itself that can kill up to 70% of a crop, and second, the disincentive to plant in the first place, without subsidies or government support. For example, the French sugar beet growers’ group CGB (Confédération Générale des Planteurs de Betteraves) asked in January for full compensation for losing most of the 2023 crop, but the situation remains uncertain.
The head of CGB last month said that the French sugar beet crop area was set to fall by 6-7% to a 14-year low. EU sugar production in the 2022/23 season was estimated at 14.8 million tonnes, a decline of 10% from the previous season, reflecting both lower yields and reduced planted area. The smaller harvest and increased refining costs because of high natural gas prices have led to higher prices within the EU, with the average EU price in February 2023 rising 83% on last year.
As the EU’s Farm to Fork and Biodiversity Strategies kick in towards 2030, beet sugar production will fall even further: Prices look set to keep rising for the next 18 months. The strategies target a 50% reduction in pesticide use, a 20% reduction in fertiliser use, a 50% reduction in nutrient leakage in groundwater, 25% of agricultural land to be used for organic farming, 10% of land set aside for environmental areas, and an increase in nature conservation areas by 30%.
What’s the solution?
Our recently published Global sugar market report revealed that—because of various forces and factors—global sugar production has taken a big hit. The end of derogations on the neonicotinoid ban has the potential to worsen the situation in the EU and the UK, driving sugar prices up further.
The only long-term solution to the neonicotinoid ban lies in alternative pesticides or successfully breeding pest-resistant crops. For example, organic farmers distract pests with pheromones and catch them in traps or buckets. The French Health Agency, ANSES, has identified four short-term solutions to replacing neonicotinoids: two conventional plant protection products with insecticidal properties, along with two farming techniques— mulching and organic fertilisation—in cultivated plots to reduce aphid populations.
Other solutions could include microorganisms, predatory insects or parasites who lay their eggs inside aphids, plant and mineral oils that provide physical protection for beets, and cultivation methods that combine growing beet with other plants.
One thing is for certain: without a realistic solution to the neonicotinoid ban and the resulting fall in European beet production, global sugar prices look set to keep rising.
Tight markets are tough for both buyers and suppliers, but with the right support and suppliers, food and beverage manufacturers can successfully navigate the ever-changing sugar supply landscape.
A board member and co-leader of the business, Ben is responsible for our marketing strategy and its execution by the agency team he leads and is the guardian of our corporate brand vision. He also manages key customers and distributors.
In 2005, he took on the role of globally sourcing our ‘speciality sugars’. With his background in laboratory product testing and following three decades of supplier visits, his expertise means we get high quality, consistent and reliable raw materials from ethical sources.