Anyone who lives in York, especially those who live towards the north side, knows that there is a sugar factory in the city.

The smell given off as the sugar beet is delivered is distinctive. It is as distinctive as the aromas from the Nestle chocolate factory at the other side of the city.

Some miles out of York, the villages are reminded of the existence of the factory when the wind is in certain directions.

On our farm we are well aware of the sugar factory. Sugar beet has been grown here practically every year, for many years. It is grown on a contract which guarantees a certain price for a certain total weight of beet. There is an adjustment to take account of the sweetness of the beet, and a contribution to the haulage costs. Down the years growing beet has been a nice little earner.

The violent swings which affect some crops which are more directly related to the market have not affected sugar beet. So, provided the job is done correctly, a modest profit can be made each year.

York is now the most northerly sugar factory. There used to be a Scottish one at Ayr, but this, together with a number of smaller factories, such as that in Selby, was closed down in the interests of greater processing efficiency. Concentrating on fewer, larger factories and investing heavily in them has made the UK industry the European leader in terms of cost-efficiency and innovation.

Sugar can, of course, be produced not only from beet but also from cane. The sugar marketed in this country by Tate and Lyle is cane sugar, that by the British Sugar subsidiary Silver Spoon is beet sugar.

Sugar cane is grown in warmer climates. Many Commonwealth countries are involved in cane sugar production. Their access to the UK market was specifically protected when we joined the Common Market.

The result of this is that British Sugar and Tate and Lyle each provide about 1.1million tonnes of sugar for the 2.2 million tonnes home market. Perfect balance. There is no exportable surplus of UK sugar and, therefore, no export subsidies are payable.

In a situation where large parts of global trade are in the hands of a relatively small number of traders, there is no real world price. Some countries export huge amounts of sugar on to the world market.

Brazil is a major player and as their exports have risen, the price on the so- called world market has fallen. The stable EU price has become attractive to other world producers, and a number of non governmental organisations such as Oxfam have taken a view that the stance of the EU is not helping poorer countries. They feel the EU should reduce the price paid to growers.

The developing world producers, however, have decided they would like to trade into Europe, but at the existing European price. Not for them the everlasting downward pressure on farm prices.

The cost per person per day in the UK of sugar in all products is about six pence. It does not seem much.

If UK farmers have to take a smaller price what chance is there of seeing a reduction in the price of, for example, Coca Cola? One suspects the cash will just go into the pockets of the large companies.

There are 20,000 British jobs dependent directly on the UK sugar industry, as well as others on farms.

This must not be another UK industry that gets exported because of neglect.

Updated: 10:09 Tuesday, November 18, 2003