Report of the cooperative The European sugar market will enter a new era in 2017, when sugar production is no longer regulated by the European Union. The sugar beet growers, the cooperative and the sugar business have all prepared themselves for the changes. In the final year of the common sugar market organisation, the beet price paid to members exceeded expectations.

The Members’ Council met on three occasions during the year. The measures and investments in anticipation of the end of the common sugar market were frequent points of discussion. Cosun successfully introduced a new sugar supply system based on member certificates. The introduction of the new system required an amendment of the cooperative’s Articles of Association and regulations.

The Members’ Council also approved a proposal to admit CSV COVAS as a member of Cosun. This regional cooperative of beet growers is currently Cosun’s only C member and its members are thus indirect members of Cosun. The Board of CSV COVAS had taken the initiative to study the potential benefits of joining Cosun. Direct membership proved to be the best option for the longer term. CSV COVAS’s organisation will be wound up and terminated in due course. The aim is to complete the transition by 1 May 2017 so that Cosun will have only direct members as from that date.

The regulations on the payment made to growers terminating their business have been amended. With effect from 2017, the payment will take account of the results of more years than at present. Payments are currently based on the average result in the three years before the year in which a member applies for the payment. This will be increased in steps until 2020, when the payment will be determined by the average result during the previous seven years. This arrangement will end in 2020, after which the oldest year will drop out and a new year will be added. As a result, the amount of the payment for a particular year will vary less from that for the previous and following year.

MANAGEMENT MATTERS
The Vice-Chairman of the Board, Gerard van Tilburg, retired at the 2016 Annual General Meeting. He was not eligible for re-election. Cosun is extremely grateful to this dedicated and experienced Board member for his great commitment to the cooperative over many years. Arwin Bos was appointed to fill the vacancy and Johan Klompe assumed the position of Vice- Chairman. Biense Visser, external member of the Supervisory Board, has since stood down. Hans Huistra was elected to fill the vacancy as from 8 February 2017.

The vacancies on the Board and the Supervisory Board were announced within the cooperative for the first time via the members’ magazine and the website in 2016. A job description and an invitation to apply directly to the Secretary produced several responses from suitable candidates who otherwise might not have put themselves forward. In view of this positive response, the new method will be continued.

The Youth Council organised several activities in 2016 to deepen its members’ knowledge of both the cooperative and its activities. The pinnacle of the year was the Cosun Youth Day in December. Some 250 young members met in Dronten to learn more about each other and Cosun and the issues that affect them as young farmers. The ambition of having young people learn about management seems to be bearing fruit: several members and former members of the Youth Council have moved on to the Members’ Council.

COSUN SUGAR SYSTEM
The number of member supply certificates in issue was increased by 20% in 2016. The many members who had subscribed for more received 20.7% additional certificates. More certificates could not be issued because most of the members exercised their right to increase their holdings by 20%. On balance there is a great deal of interest in increasing the beet crop. An estimate based on seed orders indicates that some 84,500 hectares will be sowed with sugar beet in 2017.

Part of the crop was frozen by the sudden frost at the end of November. Two thousand hectares of beet were still in the ground at the time. The Board introduced a frost compensation scheme in response and growers applied to have 175,000 tonnes of beet transported and processed ahead of schedule. Cosun charged the growers concerned an additional processing fee.

Heavy rainfall also took its toll during the year, especially in the east of Brabant and in Limburg. Members who lost part of their crop in the saturated fields and were thus unable to supply their reference volumes will not see a reduction in their supply certificates or their allocation for the following year’s campaign, provided they had originally sowed sufficient hectares.

The Members’ Council agreed to a proposal to make Unitip compulsory as from 2018. The aim is to show how the beet are grown and how sustainable the sugar is that we sell to major international customers. Customers are making stricter demands regarding sustainability. To encourage the members to use Unitip before it becomes compulsory, farmers adopting the system before 2018 will be paid a premium of EUR 250 in 2016 and 2017.