On a point of order, my Private Notice Question was to the Tánaiste and Minister for Enterprise, Trade and Employment.
Private Notice Questions. - Industrial Dispute.
Mr. Coveney:
The Chair says it is to the Minister for Agriculture, Food and Rural Development.
Mr. Coveney
asked the Tánaiste and Minister for Enterprise, Trade and Employment the progress in achieving an end to the sugar beet dispute.
asked the Tánaiste and Minister for Enterprise, Trade and Employment the progress in achieving an end to the sugar beet dispute.
asked the Minister for Agriculture, Food and Rural Development the steps the Government intends to take to seek a solution to the dispute between beet growers and the Irish Sugar Company, which now threatens the livelihoods of farmers and Irish Sugar Company workers in light of the failure of mediation efforts undertaken by the former Secretary General of the Department of the Taoiseach; and if he will make a statement on the matter.
I tabled my question to the Taoiseach but now that the Minister for Agriculture, Food and Rural Development is making one of his rare appearances in the House. I am pleased to welcome him back.
On the question without comment.
I am so happy to see the Minister again after such a long absence. I hope to see him at the committee tomorrow.
On the question, Deputy, without comment.
(Interruptions.)
asked the Minister for Agriculture, Food and Rural Development the further steps he will take to facilitate mediation between the Irish Sugar Beet Producers' Association and Greencore.
asked the Tánaiste and Minister for Enterprise, Trade and Employment her proposals regarding the resolution of the ongoing sugar beet dispute; and if she will make a statement on the matter.
asked the Minister for Agriculture, Food and Rural Development his plans to help resolve the ongoing dispute between sugar beet farmers and Greencore given the very real prospect of 600 employees losing their jobs and that many farmers will be forced out of beet production if this issue is not resolved immediately.
As Deputy Browne is not present I will ask the Minister to reply to the six questions.
I am most anxious to have this dispute resolved quickly and to the satisfaction of both sides.
The production of sugar in all EU member states is regulated by the EU sugar regime. The EU regulation specifies a minimum price for sugar beet. In some member states, including Ireland, an additional payment, termed the deficit premium, is paid. Under the regulation, sugar manufacturers are obliged to pay at least the minimum and, where appropriate, the deficit premium for sugar beet. Any additional amount over and above the minimum price specified in the regulation is a commercial matter for negotiation between the two parties. Irish Sugar plc pays above the minimum price specified in the EU regulation.
As the sugar manufacturing season is now well under way and many farmers are ready to deliver their crop, I am very concerned that this matter be resolved quickly and I urge both sides to do everything possible to find a solution. Over recent weeks, I have arranged and facilitated a number of meetings to try to find a solution acceptable to both sides. I am very disappointed at the lack of progress made.
To progress matters and with the agreement of the two sides, the Tánaiste and I arranged for an independent mediator to chair a new round of meetings. Despite meetings over four days, from 21 to 24 November, no basis for agreement was found. I was most disappointed at this outcome.
I assure the House that I am most anxious to see a resolution that is satisfactory to all concerned, including the 650 workers directly employed. In a further effort to facilitate a solution the Tánaiste and I will meet both sides tomorrow.
Mr. Coveney:
Will the Minister confirm there was a proposed resolution by the independent mediator of a price increase of two euro per tonne together with an increase of one euro each year for the next three years? Will he confirm that the IFA seems to be happy with this solution and that Greencore is not? Why is he waiting until tomorrow to meet Greencore? Why did the Tánaiste and himself not meet it yesterday? I understand the Tánaiste was willing to meet Greencore yesterday. Will the Minister shed some light on that aspect?
Why has the Minister waited so long to get involved personally in the dispute? The dispute has been going on for almost three weeks. Where has he been and why has it taken him so long to get involved personally?
The position is that Mr. Paddy Teahon, a person of significant standing in the community and a former Secretary General of the Taoiseach's Department, acted as a mediator for four days. In the end, it was not possible to find a resolution. He intimated that a solution might be based around two euro plus one euro following on from that. I understand that was acceptable to the IFA but not to Greencore.
On the dispute itself, as we operate a market economy, the arrangement in regard to the fixing of the price of beet takes place each year. The negotiations this year went on for ten months and eventually broke down. I would like to have seen both sides bring about a resolution much earlier. However, both sides ultimately got together. I facilitated a meeting which was chaired by the Minister of State, Deputy Davern. He had four meetings with both sides and it was not possible to find a resolution. Subsequently, the Tánaiste and I arranged for the former Secretary General of the Taoiseach's Department, Paddy Teahon, to bring both sides together, which he did. The Tánaiste and I will meet both sides tomorrow.
In regard to the fact that the dispute has caused the closure of the Carlow and Mallow plants in the past few weeks and my whereabouts, I am sure the Deputy keeps in touch with the media and various announcements from time to time. I do not think it is necessary to go into the detail on where I was but suffice to say that I was involved in very important and successful negotiations on behalf of the country, first, in the WTO talks and later in Brussels.
Does the Minister agree that during the course of the dispute and since the negotiations commenced, there has been every willingness to be flexible on the part of the growers and their representatives in the IFA? Will he express his disappointment that there has been no flexibility or willingness to negotiate on the part of Greencore? Does the Minister agree, and will he make it clear to the House, that the future well-being of Greencore – we all know it is a plc – and its shareholders is dependent on an early resolution to this dispute? We should reflect on the fact that 80% of Greencore profits comes from sugar manufacturing. Will the Minister send a signal from this House to Greencore telling it that its future depends on its willingness to be flexible in negotiations to solve the problem?
I would be very glad to do that and I intend to do it tomorrow. There is unanimity in the House that an early resolution should be found to this problem. It is not in the interest of farmers because sugar beet loses sugar content and weight and is a danger on the side of roads. The frost which we are beginning to experience at night will speed up the deterioration of the beet. Many beet growers are involved in winter wheat production and would have utilised the good weather of recent weeks were it not for some beet still being in the ground. Greencore is a profitable business and has a sugar quota which it utilises. It is in the interests of both sides, the economy in general and the 4,000 sugar beet growers in particular, that this matter is resolved.
I do not know to what extent there is more flexibility on one side than the other. I know that a basis for resolution has not been found so far. I understand that during the course of negotiations with the mediator, Paddy Teahon, the sugar company put last year's price plus 50p on the table. It went further and said that the price for the following year should be based on the EU sugar regime. That was unacceptable to the farmers. I hope that the Tánaiste and I will find an early resolution to this problem.
Does the meeting of the Minister for Agriculture, Food and Rural Development and the Tánaiste with both sides mean that the mediator, Paddy Teahon, has been dispensed with? Is it to be a joint meeting with both sides or will the meetings be separate? If Paddy Teahon has been dispensed with, were minutess taken of the meetings he had and, if so, have those minutes been passed on to the Minister? As the Minister said in his reply, there are 650 jobs, but that can be increased significantly because a lot of the service industries are hit by this as well. The jobs of well over 1,000 workers are threatened in this regard. Where does this leave us after tomorrow? If it is not a joint meeting, what is the plan to bring both sides together? Is Paddy Teahon available to be used as a mediator by the Department?
Paddy Teahon has done very valuable work and has brought the negotiations to the point where Greencore put a price on the table – that was not there until his mediation commenced. He is still available.
We will have separate meetings with the farmers and the sugar company tomorrow. I hope and expect that will lead to a joint meeting. If it helps to have Mr. Teahon facilitate further discussion, he will be available.
Does the Minister agree that any prolonged continuation of this dispute will not produce a marked reduction in the quantity of sugar produced? What will happen if there is no utilisation of the sugar quota this year? What effect will it have on the sugar company's right to use the quota next year? Will there be repercussions? In the event of the continuation of this dispute past the point where the harvest is recoverable, are there measures that the Government or the European Commission can take to make a different arrangement for the allocation of the sugar quota?
I hope that we find a resolution quickly. Difficulties will be presented if finding a resolution takes time, for example, the quality of the sugar beet will deteriorate. I hope and expect that we will find a resolution so that the sugar company can utilise the quota. The gravity is such that 25,000 tonnes of sugar has been imported and I expect a lot more will be imported if a resolution is not found. We are not talking about 650 jobs but many more than that as the confectionery industry is also affected. It is a very grave problem and we hope that a resolution can be brought about tomorrow.
What about the quota?
Notwithstanding the Minister's earlier reference to us being in a market economy, the key issue here is the abuse of a dominant position by a private company which has given rise to hardship not only to farm producers and their families, but to many in the service industry and the 650 workers who are directly involved and are pawns in this. Does the Minister see a long-term future for Irish beet producers and processors, notwithstanding the power being exercised by the processors?
Each year the sugar company and the growers negotiate the price. That has gone on for a number of years but they have not resolved it so far this year. One of the ways to sort this out in the longer term is to appoint a regulator. The difficulty in doing that to sort out the immediate problem is that it will require primary legislation and that would take some time. Because of the gravity of this and the knock-on effects in other companies, it is a matter to which I am giving serious consideration. This is an important industry which must be kept in operation. It employs many people and has a 200,000 tonne quota. I will pursue the appointment of a regulator in the medium to long term but I want to resolve this matter immediately.
What about the allocation of the quota?
Does the Minister believe the farmers are right in what they are looking for? Does he believe they are underpaid and that if they do not get an increase it will hurt the sugar industry severely? Is the Minister on the side of the farmers?
We are independent. Last year the Irish Sugar Company had a turnover of £147 million and made a profit of £26.5 million. It is a profitable business. I want to enter the talks as an honest broker and want to see an early resolution to this for the future well-being of the industry. I am, however, also looking at a way of preventing this from recurring every 12 months.
(Carlow-Kilkenny): I apologise for mistiming a vote that I thought was taking place.
I congratulate the Minister of State, Deputy Davern, on his efforts in the Minister's absence to bring the sides together. It was the one thing we asked him to do the last day we debated this here and he succeeded. This is a company that is making money, though it is carrying on as if it were put to the pin of its collar to give an increase. Without prejudging the talks, in fairness to the IFA delegation, it is willing to negotiate. It does not bode well that management is taking a very tough line when, after all, it gets the benefit of our beet quota. It is important this long-established industry continues.
Workers other than farmers are involved. When the Tánaiste gave an interview two weeks ago I rang her office about getting a mediator but I was told she had no responsibility. I find it strange that if an American computer company is closing down the Tánaiste comes in immediately to help with the dispute. Two weeks later it seems to be a responsibility, but that is two weeks too late as far as I am concerned. This should have been handled straight away.
This is affecting business people in Carlow as well as the workers and there will be a long-term effect if it is not sorted out. Tomorrow the Minister should talk severely to Greencore. In my experience the people in that company are not the easiest people to talk to and the Minister may have to take an independent position. As far as a regulator is concerned, if primary legislation is needed the Minister would be guaranteed the support of everyone in the House to rectify the situation.
I appreciate the concerns of Members. Obviously we want this dispute ended immediately and we want to put the future of Irish Sugar and Irish sugar beet on a sound basis. I will bring to the attention of those at the meeting tomorrow the concerns expressed here. I acknowledge what the Deputy said about the Minister of State, Deputy Davern. I was out of the country and he came in at a difficult time to bring the negotiations to a certain stage. Unfortunately, both sides could not agree on what needed to be agreed and further meetings with the mediator had to take place over four full days. Paddy Teahon is a very experienced mediator and negotiator and it was a great disappointment to me that the matter did not finish more positively.
I congratulate the Minister of State on at least trying to solve the problem at a very difficult time. However, at the same time I always say that one should not put a boy in the master's place. The Minister is the man responsible for agriculture.
I was going to tear up the cheque but I will not now.
It takes two to tango. I am amazed that Greencore has stood idly by and not met the demands of the growers for the past ten months, which has brought this to a head. Greencore would be well advised to put a better public relations system in place to deal with this. I need not remind the Minister that it was Greencore which was responsible for stifling the vegetable growers of this country.
I remind the Deputy that these are Private Notice Questions.
I know. I am telling the Minister that I do not want to see the beet growers of Ireland go the same way as the vegetable growers went 20 years ago. That is what will happen if Greencore does not play the ball with the farming organisations. It is clear the Minister should appoint a regulator. The time has come when Irish sugar growers should be protected. Surely they are entitled to an increase to cover the cost of inflation. The bully-boy tactics of one side in the negotiations in not coming to terms with the producers is not acceptable. I urge the Minister to do everything possible in his power to bring this to a speedy conclusion as the beet is losing its quality in the ground and farmers are at a huge loss.
A question, please.
In future we will be looking for farmers to grow beet.
I remind the House that this is not a debate on the issue. I ask Deputies to confine their remarks to questions.
Does the Minister agree time is not on his side at this point? Does he further agree that the deterioration in the weather means it will become more difficult to get the crop out of the ground if we have heavy frost and wet weather? Will he tell us how long it will take for the factories which are now closed to get back into full production, assuming a resolution is found soon? People are worried about this. Will the Minister tell us what responsibility the company has regarding the utilisation of the national sugar quota? Is the Minister happy that all our sugar might have to be imported if this issue is not resolved soon?
First, it is vital to get an early resolution because of the points made by the Deputy regarding the deterioration of the crop and so on. It takes three or four days to crank up the factories to get them going. Deputy Dukes asked about our sugar quota. EU regulations stipulate the quota for a member state is designated to the manufacturing enterprise in that State – Irish Sugar in our case. It is a matter then for the manufacturing enterprise to enter into contracts with growers, which Irish Sugar does in Ireland in relation to about 4,000 growers. We want to make sure this year's crop is harvested and that we put a long-term resolution in place, as 25,000 tonnes of sugar beet are already imported into Ireland. There is a trading agreement under "Anything But Arms" and in four or five years sugar will be more freely traded and there will be more competition here. The sugar company's side of the story is that it pays above the average price in the EU, particularly that in France and the UK, which are the main suppliers of sugar on the Irish market. On the other side, the growers point out that there is a handsome profit margin, to which I referred a while ago. We not only want to find a resolution but to put the industry on a sound footing for the future.
Greencore has a turnover of £137 million and profits of £26 million. While the Minister will go in tomorrow as an independent broker, I strongly recommend, in view of those profits, that he go in as an independent on the producers' side. With Greencore making that much profit, it is a powerful body which can withstand this problem, despite saying it pays more than the EU average. Will the Minister ask Greencore tomorrow if it is seeking excessive profits to increase that £26 million further? It is not right or proper that Greencore should be allowed to increase its profits while farmers and producers are suffering. The Minister should make that point at tomorrow's meeting.
Greencore has closed its plants in Thurles and Tuam and it is important the Minister seeks confirmation of its intention to keep the plants in Carlow and Mallow open. The Minister should also ascertain whether the company intends to close any of its distribution outlets or stores throughout the country. I have heard rumours to this effect which I hope are untrue.
Is the Minister aware of the damage caused by frost to beet crops in the ground and on the roadside? The Minister should approach Greencore tomorrow with the same aggressive attitude the company has displayed towards farmers and producers.
Although this matter has been going on for the past ten months with Minister of State, Deputy Davern, and Paddy Teahon seeking to resolve it in the past few weeks, there is not a great deal between the two sides. The Deputy referred to profit margins. Greencore has put last year's price plus 50p on the table and the mediator has suggested up to two euros. Each euro would cost the company approximately £1 million off its bottom line which is not a great deal in view of the margin of profit already in the public arena. I hope it will be possible to narrow that gap and resolve this issue.
Of course it is our wish that the plants referred to by the Deputy remain open. Deputies Sheehan and Jim O'Keeffe will recall the existence of fine vegetable plants in Skibbereen and Midleton but that industry has since disappeared. We do not want to see the sugar beet industry going the same way.
Does the Minister accept that the sugar company is playing Russian roulette in this matter? The dispute has been going on for ten months with the most recent phase occurring in the past three weeks. Farmers, sugar company workers, company shareholders and the economy are all losing as a consequence. The company alleges that the price it pays Irish growers is higher than that paid to growers in the UK and France but does the Minister accept the price paid to growers in Germany, Denmark, Holland and elsewhere is higher than that paid here? The company is selective in its choice of statistics to support its case. Is the Minister prepared to stand behind the excellent work done by the mediator, Paddy Teahon, a man for whom I have the highest regard and respect and who assisted me in drawing up the Bantry package many years ago? The Minister stated that an additional 1 per tonne would cost only £1 million for a company which makes £26 million. Greencore continues to reject the mediator's recommendation while the IFA has sent out very positive signals about it. The mediator has made an honest effort and produced a fair compromise and the Minister should stand behind that.
Paddy Teahon is a highly respected mediator. I wondered whether the Deputy would be able to resist referring to the Bantry package.
I am considering its re-introduction.
Every time I visit Mizen Head, I marvel at the excellent signposting and the clear identification of rivers and streams in west Cork which have greatly enhanced the area.
The company has stated that its price is greater than the EU average and is higher than the French and UK prices. Some countries in the EU pay a higher price but the company argues that a price increase here would lead to an increase in imports. I want to approach the talks as an honest broker and build on the work carried out by Paddy Teahon who, after four days, has brought the parties to a crucial point from which I will continue.
This dispute also affects 39 farmers in County Kerry, primarily in the Ballyheigue, Fenit, Kilmoyley and Ardfert areas. These farmers make a substantial contribution to the local economy and will go out of business if this dispute is not resolved. What advice is the Minister offering to farmers to preserve harvested beet on the roadside? Has the Minister asked Teagasc to advise farmers on the best way to preserve the beet and retain its quality while they await the reopening of the factories?
Teagasc personnel in Carlow have advised growers in this regard. From my experience delivering beet to Mallow factory when the train line in west Cork was closed – Ballinascarthy station being the preferred delivery point – the simple expedient of covering the beet during frosty periods prevented deterioration. High quality thrashed straw was used as a covering material in the olden days and Teagasc is advising farmers to do likewise now. The sugar content and weight of the beet has also deteriorated and winter wheat growers have been prevented from growing wheat crops in recent weeks, resulting in loss of income and disturbance to normal farming activity. I hope we will be able to resolve this issue tomorrow.
It would be disorderly of me to tell the Minister that it would be a proper recognition of the Bantry package if he would follow up now and ensure that the quality of the roads in west Cork matched the quality of the signage, but I will not go down that route.
The Minister said the quota is allocated by the Commission to the sugar manufacturer. In the event of a substantial underperformance on quota or, indeed, if the quota is not performed on this year, can either the Minister or the Commission make a different arrangement about the allocation of the quota? If that is the case, would it be helpful to make that clear in the context of the current impasse?
With regard to the roads in west Cork, there is great dul ar fheabhas in relation to those roads. A fabulous amount of work has been done on the road to Goleen, particularly around Kilcoe, Ballydehob and Lowertown.
There is a very good Deputy in Goleen.
Excellent, and I think he meanders his way west to Bearra as well.
He meanders east as well.
Is the Deputy referring to the Clonakilty speech?
It would be as well for him to keep his eye on the eastern side because there is a fair bit of canvassing going on there at the moment.
There will be more.
I have made inquiries in relation to the quota and I have been informed that the Governments of member states and the European Commission have no function in that matter. The quota is allocated to the processor, in this case Irish Sugar, and nothing the Government can do will affect that allocation. We want to ensure that the quota is utilised into the future. We are hopeful of making a break-through tomorrow to ensure that is done.
Has preparatory work been done by the Minister's officials or by Mr. Paddy Teahon for tomorrow's meeting? Has the Minister's Department or the Department of Enterprise, Trade and Employment had informal contact with both sides in relation to preparing the meeting so that a successful conclusion can be reached?
This dispute has been going on for a long time and no one in either Department appears to have identified the serious nature of the problem, which has been escalating for the past ten months. Is there not a unit within the Department of Enterprise, Trade and Employment which identifies jobs that are under threat? It is readily admitted that 1,000 jobs are at risk as a result of this dispute. This is apart from the problems being encountered by farmers and their families. Why did the Department of Enterprise, Trade and Employment or the Department of Agriculture, Food and Rural Development not become involved in this problem at an earlier stage?
A tremendous amount of work is being done by the Secretaries General of both Departments and by the relevant assistant secretaries and principal officers. They have been in contact with one another in preparation for tomorrow's meeting and over the past couple of weeks. They have also been in contact with both sides in the dispute. Much interaction and preparation is taking place. The officials of both Departments are anxious to see the problem resolved.
In a market economy the negotiated price each year is a matter between the two sides. It is no longer a matter for centralised bargaining.
It is a monopoly.
In his reply to the first supplementary question on the matter of the regulator, the Minister seemed to favour, in principle, the appointment of a regulator. Am I correct in this interpretation and in noting that the Minister's major concern appeared to be one of delay, due to the fact that primary legislation is required? Does the Minister accept the principle of a regulator in the medium term? If so, on the matter of delay, I contrast the current situation with that of the early 1990s when legislation was required to facilitate a very good friend of the Minister and of Fianna Fáil, Mr. Larry Goodman. There was then no difficulty regarding delay in enacting primary legislation. The House was recalled during the summer recess and every official available in the Department and beyond was instructed to draft primary legislation which was passed by the House within days because of the urgency of the situation. Does the Minister not agree that once he accepts the principle of a regulator, delay will cause ongoing damage to all concerned?
I am anxious that this matter be sorted out tomorrow. Obviously, we cannot have legislation tomorrow. However, if we have a level of agreement in the House I will seriously examine the appointment of a regulator because of the importance of the industry. I am anxious to do that. If I can be facilitated by the House this will be done very quickly. However, the budget will be presented next week and the problem could not be solved by legislation sooner than that. I want the problem resolved this week. I want to resolve the immediate problem and then place the industry on a sounder footing than at present.
Mr. Coveney:
Will the Minister indicate how long it will take the factories to resume production if the dispute is resolved tomorrow? My understanding is that this would take approximately one week. Farmers would like the Minister to give an indication of the time involved, if he has one.
Will Mr. Paddy Teahon be present at tomorrow's meeting or will he be involved? I presume the Minister has discussed the matter with him by now. Will Mr. Teahon's recommendations be the basis for negotiation and the starting point of tomorrow's meeting, or is it proposed to start from scratch again in negotiating a price for this year and the next three years? I wish the Minister well tomorrow and I hope he is successful.
I thank Deputy Coveney. I will need all that goodwill. If there was as much goodwill on the two sides of the dispute, we would find a resolution. The Tánaiste and I will attend tomorrow's meetings and seek to bring about a resolution. Mr. Paddy Teahon will not attend. However, the work he has done has brought matters this far and we will take them from here, beginning tomorrow.
I wish the Minister well for tomorrow's meeting. There is a fund of goodwill on both sides of the House to bring about an early resolution of this dispute. I hope the matter will be resolved tomorrow. In the event of matters not progressing satisfactorily tomorrow, the Minister can be assured that the Opposition will facilitate him in passing whatever legislation is required, particularly in the event of a regulator being appointed.
It is clear the Minister and the Tánaiste have arranged for an independent mediator to chair a new round of meetings. Is it not possible at this stage to arrange a round table conference for tomorrow, consisting of the Minister, the Tánaiste and both sides in the dispute, rather than have a meeting chaired by a third party. This is not a situation for a hands-off mediator. I recommend a face-to-face meeting tomorrow.
The Tánaiste and Minister for Enterprise, Trade and Employment will meet separately, first with the farmers and farmer growers and then with the sugar company. We will then meet both together to try to resolve the matter conclusively.
That concludes Private Notice questions.