Thursday, 30 May 2013

Questions (251)

John Deasy

Question:

251. Deputy John Deasy asked the Minister for Agriculture, Food and the Marine the estimate for the overall capital cost costs involved in building a manufacturing plant for the production of sugar. [26500/13]

View answer

Written answers (Question to Agriculture)

I would like to give the Deputy the background to this issue. The EU Sugar Regime underwent a radical reform in 2005 following major EU decisions to restructure the industry. A temporary restructuring scheme was introduced with the aim of reducing EU sugar production. Greencore, the holder of the entire Irish sugar quota, availed of this voluntary scheme, dismantled its facilities and ceased production in 2006. Ireland secured €353 million as part of the reform package of which €220 million went to beet growers, €127 million to Greencore and €6million to machinery contractors. There is no mechanism under the present EU 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.

I know you will be aware that in 2011 I met with two separate groups which had conducted feasibility studies, into the possibility of establishing a new sugar/bioethanol facility in the country. I understand from figures published by the interested groups who are investigating the possibility of building a new facility, that the overall capital cost costs involved could range from €250 million to €400 million, depending on what type of facility will be constructed. At the 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. I also further suggested to both groups, the desirability of there being only one single proposition in play, as both studies had indicated a potential for only one such viable project and both groups had appeared to accept the reasonableness of this position at the time. Only recently, I re-stated that any business plan for a new venture in this area, would need to be competitive and that it would have to justify the very substantial investment to build a new facility.

I have strongly supported the current EU Commission’s proposals to completely abolish sugar quotas from 30 September 2015, as part of the ongoing CAP Reform discussions. At each meeting of the EU Council of Agriculture Ministers since October 2011, which has addressed this issue, I have intervened to fully support the Commission proposals for quota abolition. I also raised the issue with EU Agriculture Commissioner Ciolos during his visits to Ireland last year and in several other contacts with him, I have informed him of the growing momentum here for the revival of the sugar industry.

In recent discussions at the Council of Agriculture Ministers, which I am chairing under our EU Presidency responsibilities, a deep divide emerged between one group of Member States, including Ireland, which favoured abolition of quotas in 2015 and another group of Member States which wished to extend quotas to 2020 and beyond. As current President of the Council, I made a compromise proposal that garnered the support of a large majority of Member States, to extend the quota regime for a further two years until 30 September 2017 when it will finally cease. This is the formal negotiating mandate for the Agriculture Council, as we enter the final phase of the ongoing CAP Reform negotiations. The European Parliament is in favour of extending quotas to 2020. The Council is now in detailed trilogue discussions between the EU Commission and the Parliament on the general CAP Reform package, including the future of the EU sugar regime, and I am hopeful that I can bring these talks to a successful conclusion before the end of our Presidency role on 30 June next.