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Sugar Beet Industry.

Dáil Éireann Debate, Thursday - 8 December 2005

Thursday, 8 December 2005

Questions (186, 187)

Bernard J. Durkan

Question:

186 Mr. Durkan asked the Minister for Agriculture and Food the number of jobs likely to be lost directly or indirectly as a result of changes in the EU sugar policy; and if she will make a statement on the matter. [38637/05]

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Written answers (Question to Minister for Agriculture and Food)

It will be a matter for beet growers and Irish Sugar Limited to make decisions about sugar beet growing in light of the reformed sugar regime, on which political agreement was reached by the Council of Agriculture Ministers on 24 November 2005. The main features of the reform agreement are as follows: a lower reduction in the support price of sugar than originally proposed — 36% instead of 39%; a phasing-in of the corresponding reduction in the minimum sugar beet price over four years, instead of the two-step reduction originally proposed; an increased rate of compensation for beet growers of up to 64% of the price reduction, to be paid in the form of direct payments worth approximately €121 million to Irish beet growers over the next seven years; a once-off payment worth almost €44 million exclusively for beet growers in the event that sugar beet production ceases in Ireland; and an aid package of up to €145 million for economic, social and environmental costs of restructuring of the Irish sugar industry involving factory closure and renunciation of quota. The entire compensation package for Ireland has an estimated value in excess of €300 million.

In the event that sugar production ceases in Ireland, a once-off payment of almost €44 million would be available for growers. Also, the restructuring fund of up to €145 million would become available to provide compensation for the economic, social and environmental costs arising from factory closure. The reform agreement provides that at least 10% of the fund shall be reserved for sugar beet growers and machinery contractors to compensate notably for losses arising from investment in specialised machinery. This amount may be increased by member states after consultation of interested parties as long as the financial breakdown of the elements of the restructuring plan is kept balanced according to a sound economic proposal.

In Ireland, sugar beet is grown by 3,700 farmers and it is estimated that approximately 1,000 people are employed in sugar processing and ancillary activities.

Bernard J. Durkan

Question:

187 Mr. Durkan asked the Minister for Agriculture and Food if she proposes to take steps to encourage sugar production from beet in the future; and if she will make a statement on the matter. [38638/05]

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The recent agreement by the Council of Agriculture Ministers in relation to reform of the EU sugar regime was the culmination of a protracted and difficult negotiating process. The outcome, in my view, represents the best possible deal that could have been achieved for Irish beet growers in the circumstances and is a considerable improvement on the Commission's initial proposals of last June. The main features of the agreement are as follows: a lower reduction in the support price of sugar than originally proposed — 36% instead of 39%; a phasing-in of the corresponding reduction in the minimum sugar beet price over four years, instead of the two-step reduction originally proposed; an increased rate of compensation for beet growers of up to 64% of the price reduction, to be paid in the form of direct payments worth approximately €121 million to Irish beet growers over the next seven years; a once-off payment worth almost €44 million exclusively for beet growers in the event that sugar beet production ceases in Ireland; and the aid package of up to €145 million for economic, social and environmental costs of restructuring of the Irish sugar industry involving factory closure and renunciation of quota. The entire compensation package for Ireland has an estimated value in excess of €300 million.

It will be a matter for beet growers and Irish Sugar Limited to make decisions about sugar beet growing in light of the reformed sugar regime. In the event that sugar production ceases in Ireland, a once-off payment of almost €44 million would be available for growers. Also, the restructuring fund of up to €145 million would become available to provide compensation for the economic, social and environmental costs arising from factory closure. The agreement provides that at least 10% of the fund shall be reserved for sugar beet growers and machinery contractors to compensate notably for losses arising from investment in specialised machinery. This amount may be increased by member states after consultation of interested parties as long as the financial breakdown of the elements of the restructuring plan is kept balanced according to a sound economic proposal.

The formal legal texts giving effect to the agreement will be adopted by the Council of Ministers early next year after the opinion of the European Parliament has been received. The Commission will then come forward with proposals for detailed implementing rules. Pending the adoption of the relevant regulations it is not possible to give further definitive information but, as with the earlier phases of CAP reform, my Department will make timely arrangements for implementing the new regime in due course.

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