Wednesday, 6 February 2019

Questions (50)

Brian Stanley


50. Deputy Brian Stanley asked the Minister for Agriculture, Food and the Marine the steps being taken and actions carried out to re-establish a sugar beet industry; and the progress in this regard. [5579/19]

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Written answers (Question to Agriculture)

As the Deputy will be aware, in 2006 the EU introduced a restructuring mechanism intended to reduce overall production of sugar, acknowledging the then global over supply and resultant low prices being achieved.

Greencore, as the holder of the entire Irish sugar quota at the time, availed itself of this voluntary initiative, ceasing production and dismantling its processing facilitates.

As part of the relinquishing of its sugar quota, Ireland secured €353 million as part of the reform package, with some €220 million being distributed to beet growers and a further €6 million to machinery contractors in the sector.

In the intervening years, global production has continued to exceed demand and prices unfortunately remain at historically low levels.

As part of the reform of the CAP, agreement was secured on the abolition of sugar quotas from 30th September 2017. From that date, investors in the European Union, including Ireland are free to invest in sugar producing capacity if they wish.

Since 2006, a number of groups expressed an interest in the redevelopment of the sugar sector, two of whom prepared desktop feasibility studies between 2010 and 2011. In their findings, both proposals sought to develop a new sugar and bio ethanol production facility with capital costs, estimated at the time, of between €250 and €400 million.

More recently, I am aware that in 2018 a group has sought to engage with interested growers in an equity partnership proposal to develop a sugar processing facility in the South-east.

The current "Programme for a Partnership Government" states that "State Bodies will be asked to examine any substantial business plans relating to rebuilding the industry with a view to considering appropriate State supports".

Acknowledging this, any such business plans would need to be supported by a sufficiently robust business case, having regard to the price of sugar, to attract the substantial funding required from investors for such a new start-up industry.