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Firms close as rates for grain

11th January 2007
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Page 14, 11th January 2007 — Firms close as rates for grain
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and sugar beet fall by 3% Hauliers in the agricultural sector have been hit by a double whammy of rate cuts and rising fuel and wage costs. David Harris reports.

HAULIERS CARRYING grain and sugar beet were paid less per tonne last year than in 2005 even though their fuel and wage costs went up sharply, according to the annual survey just published by the Home Grown Cereals Association (HGCA).

The survey found that rates being achieved for UK journeys fell by an average of 3%, equating to 22p/tonne, with rates for longer journeys falling more than rates for shorter ones.

This fall, which was good news for producers but less welcome for hauliers, is the first for several years, according to the HGCA.

Ed Weetman,of Staffs-basedbulk haulier Ed Weetman Haulage & Storage,reports:"In real terms rates have fallen a bit more than 3% because of increasing fuel andwages, which is why quite a few grain hauliers have thrown in the towel."

Weetman adds that prospects for beet hauliers have not been helped by the closure of two sugar beet factories in Shropshire and Yorkshire by British Sugar because it means that "quite a lot of surplus trucks are j ob-hunting" . And Clive Warcup, of Driffield, East Yorksbased Clive Warcup Transport, points out that a smaller grain crop in 2006 did not help because there were fewer loads to be carried.

The arable area farmed in 2006 fell by 2.6%; cereal acreage fell by 2.4% and sugar beet by 11.9%, according to government figures.

Andrew Flux, assistant director at the HGCA,says:"It's true there was a little bit less grain to carry and a significant fall in the amount of sugar beet, but my impression is that the real reason for the fall in rates was competitiveness" For agricultural hauliers, falling rates can only add to existing financial pressures. Weetman remarks that in 2007 his firm will have to "look at its policies and see where to go from here, because 75% of our work is agriculturalminded". Unfortunately for Weetman, the other major area of work for the firm is carrying road salt, a business that has been badly hit by warmer winters.

His conclusion is a simple one: "We need more frost."


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