The relationship of sugar crop growers and processors is obligatory symbiotic. Both cane and beet are perishable crops and should be processed in a matter of a days. On the other hand, cane mills and beet factories can do only one thing: process sugar crops.
This survey updates the information and analysis provided in “Analysis of cane and beet payment systems” (MECAS(06)04). It shows the diversity of cane and beet payment systems in existence around the world. Cane and beet payment systems define the relationships between growers and processors in all sugar industries. Not only do they determine how industry revenues are distributed between them, they are also essential in establishing the incentives at both field and factory levels.
The survey shows that in most of the 22 cane-producing countries and in all beet producing countries under survey, the delivered cane and beet are paid for not only based on weight but also on the feedstock quality (primarily, sucrose content). It can also be noted, that although a range of revenue sharing systems are used in most producing countries, there are several pivotal economies where prices are fixed. Thus, in the cane segment, in 16 countries, industries are operating revenue sharing systems, yet six countries with fixed prices for cane include India, the world’s largest sugar producer. These six countries are responsible for about 30% of global cane sugar production. In the beet segment, prices are fixed by governments in five countries (Belarus, China, Egypt, Morocco, and Turkey) while revenue sharing systems are used in many EU countries, as well as Russia, Ukraine and the US.
In general, the share of the sugar value for beet growers is usually in between 40% to 60%, while for cane growers their share is 50% to over 70%. Actual growers’ revenues under fixed price systems are also within these ranges. Cane and beet payment systems are reflecting local circumstances. In short, there is no single, or best, way for proceeds to be shared. Both cane and beet are grown in competition with alternative crops. In this situation neither revenue sharing nor fixed prices offer long-term stability to the sector. It can be suggested that the best way to keep and strengthen the financial health of the sector might be the diversification of the revenue streams through value adding by-products which is unachievable without proper and fair incentives for both processors and growers.
Introduction Part I. General Overview Part II. Cane Payment Systems Types of Cane Payment Systems Fixed Cane Prices Revenue Sharing Systems General Observations Individual Country Surveys 1. Australia 2. Brazil 3. China 4. Colombia 5. Costa Rica 6. Dominican Republic 7. Egypt 8. El Salvador 9. Eswatini 10. Ethiopia 11. Fiji 12. India 13. Indonesia 14. Kenya 15. Mauritius 16. Mexico 17. Morocco 18. Pakistan 19. Philippines 20. South Africa 21. Thailand 22. US Part III Beet Payment Systems Types of Beet Payment Systems Individual Country Surveys 1. Belarus 2. China 3. Egypt 4. European Union 5. Morocco 6. Russia 7. Turkey 8. Ukraine 9. US Conclusion