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Sugar Industry

Dáil Éireann Debate, Wednesday - 18 April 2012

Wednesday, 18 April 2012

Questions (1097)

Tom Barry


1112 Deputy Tom Barry asked the Minister for Agriculture, Food and the Marine if he will confirm whether the exit of Ireland from sugar production was due to Greencore availing of the processor’s fund, with regard to our national quota; if the decision to cease sugar production here was signed off by a Government Minister and if so, which Minister; if a copy of the relevant document will be made available; if he will further confirm that a Government Minister signed off on the golden share which existed which meant that the sugar industry could not sell or dispose of more than 20% of its assets without the signed consent of the relevant Minister; if Minister Mary Coughlan signed off on same; and if so, can this Deputy receive a copy. [18433/12]

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Written answers (Question to Minister for Agriculture, Food and the Marine)

As part of the reform of the EU Sugar Regime in 2006, a temporary restructuring scheme was introduced with the aim of reducing EU sugar production to comply with WTO and other international obligations. The Scheme was negotiated and agreed by the EU Council of Agriculture Ministers in the latter part of 2005 and resulted in the formal adoption by Ministers of the EU Council Regulation (EC) No 320/2006, which governs the operation of this voluntary EU restructuring scheme. Restructuring, in this context refers to the abandonment of sugar quota production and the allocation of restructuring aid to the affected processors, growers and machinery contractors.

Greencore, the sole holder of the entire Irish sugar quota at that time, decided to avail of this voluntary sugar restructuring scheme, and accordingly the company renounced the quota and dismantled the last remaining sugar factory in Mallow in compliance with the conditions of the scheme. This was a commercial decision taken by Greencore having regard to the prevailing market situation.

The total compensation package negotiated at the Council of Agriculture Ministers' meetings in November 2005, in the context of the reform of the EU sugar regime, and as further modified in 2007, was worth a total of €353 million to Ireland. This sum was made up of €220 million to beet growers, €6 million to machinery contractors and €127 million to Greencore. The beet growers' share was made up of restructuring aid of €53 million, diversification aid of €44 million and €123 million via the Single Farm Payment. All elements of the Restructuring Scheme have now been implemented, not just within Ireland but across the EU.

As Minister, I hold a Special Share in Greencore. This share has the same monetary value as any other share in the company but has conditions attached which prevent the company from engaging in a number of activities without the prior written consent of the Minister. However, the Special Share does not empower me to get involved in operational matters or normal business decisions made by the company.

In relation to the issue of quota ownership, the EU Commission confirmed at the time that the sugar quota is not an asset owned by the Member State or any other party but is simply a mechanism for regulating the sugar market.

Current Situation

The present EU sugar regime runs from 1 September 2006 to the 30 September 2015, in accordance with the prevailing EU Regulations. There is no mechanism under the current Regulations which would allow for the re-instatement of the sugar quota for the growing of sugar beet in Ireland for the production of sugar. Of course, sugar beet has always been grown here to be used as animal fodder.

I know the Deputy is aware that I have strongly supported the full abolition of sugar quotas from September 2015 as part of the CAP reform discussions which are currently underway in the Council of Ministers, and which, if agreed, would replace the existing quota regime. This would enable interested parties to re-engage in the production of sugar. I also raised the issue with the Agriculture Commissioner Ciolos during his recent visit to Ireland. In this regard, I have met in 2011 with two separate groups who have conducted feasibility studies, into the possibility of establishing a sugar/bioethanol facility here. At both meetings, I stated that any venture to develop a combined sugar/bioethanol production facility would have to be a commercial proposition, financed in total by investors and interested parties and make sound economic sense in order to be viable.