Wednesday, 29 March 2006

Questions (121)

Pat Rabbitte


139 Mr. Rabbitte asked the Minister for Agriculture and Food if she will make a statement on the outcome of her meeting on 21 March 2006 with a delegation from Mallow, County Cork, to discuss the implications of the planned closure of the Irish Sugar Company plant; and if she will make a statement on the matter. [11716/06]

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Written answers (Question to Minister for Agriculture and Food)

During the meeting on 21 March which the Taoiseach, the Minister for Enterprise, Trade and Employment and I, together with Minister of State, Deputy Michael Ahern, had with a delegation from Mallow, I expressed my concern about the impact the closure of the Irish Sugar plant would have on workers, beet growers and all those who depended on the sector. I explained that the recent decision by Greencore to discontinue sugar production was a commercial decision by the company having regard to the deteriorating situation on the sugar market and the agreement on reform of the EU sugar regime.

Furthermore, I outlined the background to the EU negotiations on the reform, the negotiating stance I adopted and the compensation arrangements negotiated for Ireland when the opposition of the group of 11 member states dissipated at the Council meeting in November. The outcome of my negotiating strategy in these difficult negotiations was reflected in the final compensation package worth over €310 million to Ireland, which was way beyond the most optimistic expectations. There are three elements to the package. They include the compensation to beet growers of up to 64% of the reduction in the minimum price for beet. This compensation, which will be incorporated into the existing single payment scheme, is worth approximately €123 million to Irish beet growers over the next seven years. There is the compensation by way of a restructuring fund covering the economic, social and environmental costs of restructuring the sugar industry, involving factory closure and renunciation of quota. In Ireland's case, this would be worth up to €145 million. The fund is subject to the submission of a detailed restructuring plan for the industry following consultations between the processor and the beet growers. The reform agreement provides that at least 10% of the restructuring funds shall be reserved for sugar beet growers and machinery contractors. That proportion may be increased by member states after consultation with interested parties, provided that an economically sound balance between the elements of the restructuring plan is ensured. Finally, the reform agreement provides for the introduction of aid for diversification measures where sugar beet production completely ceases. This aid, worth almost €44 million to Irish growers, would be drawn down in the framework of a national restructuring programme to be elaborated when the Commission's implementing regulation has been adopted.

The decision taken by Greencore is obviously difficult for everyone concerned. The compensation arrangements will be finalised when the Commission's implementing regulations are adopted in the coming months. I will endeavour to ensure that they are implemented in a fair and equitable manner in accordance with the regulations.