Imokilly Young Farmers Group: Presentation.

I welcome Mr. Martin Manning, chairman, Mr. Stephen Collins, vice chairman, Mr. Colm Millerick, secretary, Mr. David Tait, assistant secretary of the Imokilly Young Farmers Group. Before asking the delegation to commence its opening statement, I draw attention to the fact that while members of the joint committee have absolute privilege, the same privilege does not extend to witnesses appearing before the committee. Members are also reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official by name or in such a way as to make him or her identifiable.

I thank the Chairman and members for the invitation to make a presentation on ethanol production for bio-fuels. I thank the committee secretariat for its assistance.

The Imokilly Young Farmers Group comprises 40 members, 25 of whom are active farmers and half are tillage farmers. We have a positive attitude to agriculture and the future it holds for us. We understand only too well the difficulties facing the tillage sector. The bio-fuels sector has the potential to turn around a grave situation. While we also acknowledge the future that biomass has, the production of liquid bio-fuels is the most suited to our area. We have examined in particular the production of ethanol from sugar beet. There are still obstacles to this but we are convinced if these are dealt with in a positive and progressive manner, we will have an industry that is not only profitable and environmentally friendly but will also help the grain sector.

Mr. David Tait

The Imokilly Young Farmers Group is made up of Macra na Feirme members who are either full-time or part-time farmers between the ages of 18 to 35 years, from the east County Cork catchment area.

The world continues to rely on fossil fuels to support the ever-increasing demand for energy. This increasing demand and depleting oil supplies are leading to rising pressure on oil prices. As a result there is a growing need for alternatives, such as producing ethanol from a beet crop. As members of the discussion group, we see large benefits in producing ethanol from beet in Mallow and Carlow. To achieve this, the beet processing facilities should be retained, the possibility of producing ethanol at these facilities fully explored, excise duty relief extended and the energy payment increased.

While we accept that we have temporarily exited the white sugar business, at an absolute minimum, the possibility of converting the existing beet facilities in Mallow and Carlow to ethanol production should be fully explored. No decision on their future should be taken until a prudent assessment is carried out.

We understand the Minister for Agriculture and Food cannot get involved in the operational matters. However, under Article 2(d) of the provisions of the memorandum and articles of association of Greencore, it is specifically provided in relation to its subsidiary, Irish Sugar, that without consent from the Minister for Agriculture and Food, no sale, transfer or disposal is permitted of any sugar quota, properties, lands or premises. The golden share held by the Minister on behalf of the State, should be activated for the benefit of the State due to the current exceptional circumstances. These beet facilities are in place, serviced by road and rail networks coupled with an EPA licence to process beet. It is our firm opinion that these facilities could not be easily obtained on new greenfield sites, if the current beet processing sites are lost.

Ethanol production from tillage crops is making strong progress as an increasing number of national governments are implementing the bio-fuel directive. Demand for ethanol is rising, with oil above $65 a barrel. Ethanol will become an integral part of the energy mix in many countries, including Ireland.

Ireland is over-reliant on imported fossil fuel, importing annually 9 million tonnes, or 92%, of our fossil fuel requirements. The EU average is 50%. Brazil, the US, France and Germany see massive potential in ethanol production for transport fuel and are gearing up for large increases in production. Ireland will be left behind and increasingly reliant on other countries for energy. This is undesirable from the viewpoint of our national strategic position, as any disruption to fuel supply would be detrimental to the economy.

Ireland is 23% over its Kyoto commitments. When Kyoto is enforced, Ireland is facing €800 million to €1 billion in fines. A fraction of this money, if invested in bio-fuel production facilities, will reduce these fines, while also retaining money in the economy.

EU Directive 2003/30/EC of the European Parliament and of the Council of 8 May 2003, paragraph 19, allows Irish State measures, including tax exemption, financial assistance for the processing industry and the establishment of compulsory rates of bio-fuels for oil companies. The excise duty relief introduced for a five year period, while welcome, is not permanent enough to stimulate the level of capital investment from the private sector into bio-fuel production. A guaranteed 20 year excise duty rebate is required. While, on the face of it, it might seem expensive to the Exchequer the rebate is on only 5% inclusion. Duty will still be collected on the 95% fossil fuels.

Under the present EU single payment scheme it is permitted to grow any crop for energy on set-aside land while still drawing down €154 per acre set-aside payment. An €18 per acre energy payment is currently available on a standard acre. Our target is that all energy crops should qualify for payments at set-aside level. Beet for ethanol will be particularly efficient in this regard as it has a higher yield of liquid fuel per acre than other crops. This is highlighted in the table which has been circulated to members. One acre of beet produces 2,000 litres of ethanol while an acre of wheat produces approximately half that amount and an acre of oil seed rape produces 577 litres of bio-diesel. The taxpayer, through an energy payment, will get much better value per litre of energy produced from beet than from oilseed rape. The table also shows that the energy payment for beet is 7.7 cent per litre while that for winter oilseed rape is 26.6 cent per litre.

If there is to be movement in bio-fuels on a large-scale short timeframe basis the following needs to happen: immediate retention of beet facilities until prudent assessment is done; extension of excise duty relief to a guaranteed 20 year window; and increased energy payments to set-aside level at €154 per acre.

Since we produced this document a number of important documents have been published and I bring those to the committee's attention. They are the Green Paper, Towards a Sustainable Energy Future for Ireland, and the Mallow ethanol production evaluation study. The latter publication outlines encouraging possibilities for a viable ethanol production in Ireland.

I welcome the representatives of the Imokilly Young Farmers Group and thank Mr. Manning and Mr. Tait for their presentation, which makes very interesting reading. I also thank them for circulating the document to committee members in advance of this meeting.

The presentation raises a number of critical issues that need to be addressed. Many of the decisions taken with regard to sugar manufacturing have been disappointing, but probably the most disappointing has been the decision to forcibly decommission the facilities in Carlow and Mallow in order to access the full level of compensation. This will have a huge impact on farmers and the employees of Irish Sugar and Greencore. I had an opportunity to raise this issue with the Commissioner when she came before the Dáil earlier this year. I do not see the logic of those closures. On the one hand, the Commissioner is promoting the development of a bio-fuel industry while, on the other, she is insisting that all facilities for handling and processing beet be decommissioned in order to avail of the full level of compensation. One policy contradicts the other. The EU is being hypocritical in this regard.

I am disappointed that the Minister and the Government accepted this aspect of the compensation agreement. If we are serious about developing alternative industries and providing an alternative for tillage farmers, those facilities, especially the beet handling facilities, should have been left in place without affecting the compensation to be drawn down. This committee should raise this issue with the Commission and the Minister. The beet plants in Carlow and Mallow have an EPA licence to process beet. It will be almost impossible to acquire planning permission for a similar facility on any other site in the country. The plants were valuable assets. I recommend that the Minister use her powers, as provided by the golden share, to ensure the properties are not disposed of unless for the processing of sugar beet and its conversion into ethanol. More must be done to ensure that bio-fuels become an integral part of the energy mix. We are far too dependent on imported energy product into the European Union and into Ireland.

Excise duty relief is critically important. Has the Imokilly Young Farmers Group made a submission to the Department of Finance in this regard and if so, has the group received a response? Significant investment is required to develop an ethanol processing facility. No one will make investment on that scale without a guarantee of excise relief over a long period.

What would be the view of the group on changing the law to compel all oil distributors to blend both ethanol and bio-diesel, or rapeseed oil, into the petrol and diesel sold on forecourts or for home heating? This would create an instant market for renewable energy.

Has the group examined the possibility of using carbon, or green credits whereby a farmer would have control over such credits and could sell them on either to a processing facility or to another private industry such as the ESB? Sugar beet is four times more effective than many crops in taking carbon from the environment and from a carbon credit point of view would be a very valuable crop. Legislation is pending in this regard but it has yet to be decided whether it will facilitate farmers in accessing such carbon credit and selling it on.

I thank the Imokilly Young Farmers Group for the presentation. The group's recommendations regarding beet facilities should be brought to the attention of the Minister for Agriculture and Food, those regarding excise relief to the attention of the Minister for Finance and those regarding energy payment of €154 per acre to the attention of both Ministers.

I welcome the members of the delegation and congratulate them on their well presented case for establishing the production of ethanol at the Mallow plant. The proposal is innovative and the group has clearly examined the plan in some detail. The Cork County Council document on ethanol production in Mallow is very detailed. Was this commissioned by the group or was it prepared independently?

The timing of the group's proposal is crucial. The level of awareness of alternative fuels has increased but the level of delivery has not progressed at the same rate. This is something we must examine very carefully.

Deputy Naughten mentioned a number of Ministers to whose attention it should be brought. To those I would add the Minister for the Environment, Heritage and Local Government and the Minister with responsibility for energy. This is an issue that crosses many Departments and it is obviously crucial in terms of where we are going. We spoke about climate change and how important that issue is. This presentation is timely. I congratulate the group on doing the homework on it and putting the package together for the committee.

I too welcome the members of the delegation and thank them for their presentation. I am very conscious of the plight of people living in rural Ireland, not least those who were involved in the beet industry for 80 years and played a role in sustaining their part of rural Ireland. Having met workers in Mallow, I am very conscious of the huge loss to the community, farmers, workers and contractors. The knock-on effects are enormous and nothing has been put in place to address them. It came to my notice a number of months ago that the Greencore Carlow factory had been canvassing politically to have the facility rezoned for industrial and residential use. That will result in a huge financial killing which will benefit Greencore as against the losses suffered by the farming community in the area.

We have put much work into researching the production of ethanol from beet. I looked at a bio-fuels facility in County Wexford during the week of the ploughing championships. According to the graph the group produced, the returns, particularly from beet, are startling. There is a huge opening in this area if there is the political will. I fully support the proposals put before us today. The group is thinking ahead. It is thinking not alone locally but also nationally, given the huge penalties Ireland will face if the Government does not move to reduce the amount of energy generated through fossil fuel and increase the production of ethanol, bio-fuels, wind energy and so on.

Has the group done any work with the wider community in an amalgamated approach to utilising property for the production of wind energy, ethanol and bio-fuels, given the knock-on effects for communities? A co-ordinated approach would, perhaps, enable communities to supply the national grid and thereby generate income. Deputy Naughten suggested the possibility of combining the production of ethanol and bio-fuels with the generation of energy from fossil fuel. There could be an opening in that area but community support as well as political support would be essential. There would be a knock-on effect for the community, which should be borne in mind.

I tabled questions to the Minister on the golden share and the responses I received were demoralising, to say the least. They indicated that it was nominal. However, as the group rightly pointed out, what was a publicly owned facility has now passed, lock stock and barrel, into private hands, probably for a nominal fee, despite the sweat and blood expended by workers, farmers and contractors during the years. There is an obligation on the Government to ensure their rights are protected. If there is to be movement in bio-fuels, the extension of excise duty relief for a period of 20 years is essential. It would be an incentive to put in the extra effort.

I again thank the group for its presentation and wish its members every success in their endeavours.

I welcome Mr. Manning, Mr. Tait and their colleagues and thank them for their presentation. I support their position. The loss of the sugar beet crop was an enormous blow to the farming sector. I come from County Waterford which has a large acreage under beet. We can talk as much as we like but everything boils down to economics, whether the farmer can afford to grow at a certain price and what the Government does regarding subsidies. Other energy sources will have to be looked at.

I remember when the discussion about sugar beet began. We were told that crude oil would have to reach $100 a barrel before ethanol from beet became a viable proposition. I have not gone into the figures and I am repeating what we were told. However, I agree that while the factory is in place, a proper detailed evaluation should be done forthwith.

I am not so sure the Minister's golden share breaks down exactly as the group has said but I have no real information on the matter. Often when one looks at the small print, matters appear different. However, there is an onus on us as Government Deputies and the Minister to look very carefully at the possibility of ethanol production, taking all the costs into account, because the loss to the farming community has been enormous. People who were deeply engaged in agriculture are practically idle. Very expensive machinery, on which I am sure there are payments to be made, is standing idle. Although I am not sure yet about the economics involved, I certainly support the group's proposals and wish it well.

I compliment the Chairman and the committee on inviting the Imokilly Young Farmers Group to appear before them. It is important that committees of the House invite citizens before them to put their point of view. We need to do more of this. I also welcome the young farmers who are from my constituency and that of Deputy O'Keeffe. I know most of them quite well. I compliment them on their presentation which was short and to the point. I wish other presentations were the same.

The group made a number of requests of the committee. The first was the immediate retention of beet processing facilities until a prudent assessment was made. Cork County Council has carried out a study which seems very positive towards the proposals being made by the group. Has any other such study been undertaken by anybody? Perhaps members of the committee might consider doing one. Who would carry out the prudent assessment the group requests? Would it be one of the committees of the Houses or a Department? I agree this should be done. Apart from what is being done by Cork County Council, I am not aware of any other assessment of this issue. It would be a shame to allow this industry and these facilities to disappear. In future we might try to reconstruct it all again. That leads me to the next point. Very little sugar beet is grown currently in Ireland and the expertise to grow, harvest and process this crop is being lost. I accept that the delegation of young farmers is concerned about the future. Deputy Upton stated that today's presentation is timely because, if the situation continues, the expertise and equipment to grow and harvest sugar beet will be lost, let alone the ability to process it. What impact is the loss of the sugar beet industry having on young farmers?

As one of the more northerly members of the committee, coming from County Monaghan and representing the constituency of Cavan-Monaghan, I do not have experience of beet production. From what little I know about it there has been considerable investment in the industry in machinery and at farm and contractor level even in recent years. I would urge everybody concerned to ensure we do not dispose of the plant until every consideration has been given to whether a product can be produced with the help of subsidies that could be of benefit to the farming community and the nation.

It is traumatic for farmers who were led to believe that sugar beet would be produced for another year or so and then suddenly the rug has been pulled out from under their feet. Some of the machinery belonging to farmers and contractors is just lying around as it is of no further use to them. It is vital that this machinery is maintained. I congratulate the group of young farmers for trying to highlight this issue in order to find a positive conclusion.

I am quite confused about this whole scenario. It appears to me to be a no-brainer. People are becoming more and more conscious of the environment and the security of energy supply is crucial from an economic point of view. The production of energy crops could help to reverse the downturn in the agriculture sector. All the signs have been extremely positive but from what we have heard it appears the main problem is a lack of planning and co-ordination. The speakers referred to several Ministers who have responsibility for this area and that may be one of the problems — there are too many Ministers with responsibility for this area. It is important that sole responsibility for the production of alternative energy is given to one Minister. We are wasting our time unless there is a co-ordinated, planned approach. The closure of the sugar beet industry should have been co-ordinated with the production of renewable energy. Unless we make these changes we will go from pillar to post without achieving a positive outcome. The Government should be consulted and one Minister should be given overall responsibility to deal with renewable energy.

I welcome the delegation and compliment the members on their comprehensive document. It is easy to blame the Government for the closure of the sugar company and the sugar industry. We, in this party and on this side of the House, are saddened that we were forced into that situation by EC policy. The Chairman can confirm that we discussed the matter on many occasions in the committee. The Minister had to eat humble pie. We were the first country in Europe to cease growing sugar beet. I recognise that we did not have an optimal growing climate but ultimately we were forced to make that decision. I accept that the issue is a contentious one at present.

My family was involved in growing sugar beet since the industry began in the 1930s in the Mallow area. We had a quota of approximately 500 tonnes. The question of the demolition of the factories is linked to the compensation package. I understand there will be a percentage drop in compensation to farmers when the court case ends if the factory and the Minister do not agree to the proposals coming from Europe.

That said, we recognise the importance of bio-fuels such as ethanol and the other alternatives that exist. Since the furore on foot of the rise in fuel prices of five or six months ago when we were told it might reach even $150 a barrel, for one reason or another the price has now come back to more acceptable levels. We have read a great deal in the newspapers about this subject. Brazil is one of the major producers of ethanol and other bio-fuels which it produces from sugar cane. Because sugar cane has a high yielding energy content it is more suitable for sugar and energy production. How does sugar cane compare with sugar beet in that respect? The group has carried out a great deal of work. I agree that oilseed rape is not very acceptable because of its five-year rotation and the fact that it upsets the ground. It has many disadvantages because it is a brassica.

Whitegate oil refinery is very close to Imokilly. Most reference has been to cereal crops. Brazil has begun to explore the options with soybeans and extending production into the Amazon area where it has encountered problems in terms of infrastructure in getting soybeans to the marketplace and into plants for energy purposes. I cannot say if it is used for ethanol or other bio-fuel production. I believe it would be suitable for both. Corn is being used extensively in America for fuels.

The French have been the leaders in Europe in wheat production. I understand the group is composed of many large-scale grain growers who have been benefitting from the inflationary increase in wheat prices which has almost reached €80 per tonne. I heard this morning that rolled wheat is costing €196 per tonne. Somebody is getting the benefit. If the members of the delegation are not benefitting then they are due to do so. As I understand it, wheat is the ideal crop for energy purposes. This will have a major impact on the food industry and, as a result, bread and meat will become more expensive.

The group is most innovative. What research has it carried out, or had carried out on its behalf by experts, on cereal growing and high-energy wheat crops that can continue to be grown without a break in rotation? The advantage of sugar beet is that it was a break crop and could be rotated with wheat and barley. What research has been done into wheat, which is a high-energy and high yielding crop that is ideal for the Irish climate given the high rainfall? It could satisfy farming requirements, especially in view of the high prices that are currently available. That is evident from newspapers I have read.

Yesterday I read in theFinancial Times that Tyson’s chief executive was cautious of the impact of the price rises in grain prices. Tyson is one of the biggest food producing companies in the United States. It is conscious of the impact grain prices will have on the food industry. The food industry and the energy sector are now in competition. Sugar beet is a thing of the past. The world moves on and life goes on. This party has been one of the most innovative parties in developing the economy and we were very much to the fore in the development of that industry and its continuation if it showed future potential.

The Minister for Agriculture and Food is doing an excellent job. In her two years in office she has achieved what was not previously possible in terms of grant improvements and in many other areas. I accept we have to face up to job losses, but it must not be forgotten that many jobs were lost also in Mallow from Dairygold. Nobody knows what that company is up to but there has not been any reference to that issue although more jobs were probably lost in that company than were involved in the sugar industry. I welcome the delegation and invite a response to my questions on the grain sector and the research being carried out in that regard.

Mr. Manning

I will ask Mr. Millerick to take those questions.

Mr. Colm Millerick

I will deal with Deputy O'Keeffe's comments first. He mentioned that beet production represented the past and that as younger people we should be more progressive and look beyond it. Without doubt, new technologies are coming down the road and from our research on the matter — we have done considerable research, albeit in our spare time — they are some time away yet. We cannot ascertain accurately when they will be available. On ethanol production, our research has led us to believe the big breakthrough will come when it will be possible to make ethanol from cellulose and we will be allowed to make it from dry crops. As active viable economic farmers we must consider the short-term first and concentrate on other matters afterwards.

The Deputy asked about high energy wheats that can be grown without rotation; we have very little information on such wheats. From our expertise and training in farming we know that the most efficient method of tillage farming and its cornerstone has always been rotation. It is the cheapest and most effective method which greatly benefits the consumer. It requires fewer inputs and involves lower costs and higher returns. We believe serious breakthroughs in technology will be required before rotation will be improved upon.

On ethanol imported from Brazil, I do not know whether members of the committee have a copy of the evaluation study which goes through the matter in great detail and gives a breakdown of all costs. The cost of producing ethanol from sugar beet in the beet factory in Mallow comes to 78.3 cent per litre. The cost of producing it from wheat comes to 65 cent, or 13 cent less. All the industry experts say wheat will considerably outperform beet and we do not deny it. However, from a farmer perspective, we will not have the wheat unless we get sufficient break crops to produce it. Ireland is a net importer of cereals for the feed industry. Unless we get a break crop, we will not have the critical mass of wheat to produce it. We hear considerable talk about a port environment. While such an environment is fine, it would lead to imports, which would do nothing for our business as young farmers. I know we cannot be parochial in our views and must be aware of the global picture but we will not have the critical mass, unless we have a sufficient break crop.

Ethanol imported from Brazil would cost 67.6 cent, 2 cent higher than the cost of producing it locally from wheat. However, it is 9 cent lower than the cost of our producing it from beet. Ethanol imported from Rotterdam, in mainland Europe, would cost 82 cent. If we consider the cost of petrol as being approximately 96 cent per litre, the mineral oil costs 52 cent, with the tax take being 44 cent. Regardless of whether we import it from Brazil or Rotterdam, or produce it here, it would not be viable without some form of excise duty rebate. The industry experts have not taken on board the argument of young tillage farmers that we could produce considerably more ethanol from beet than from any other crop. Regardless of the source of the ethanol, it will need some form of Government subsidy to make it viable. While Deputy O'Keeffe is right to make the point about Brazil, that country might not be all it is made out to be regarding bio-fuels.

Compensation for farmers is a very sticky point. Whenever the matter is raised, everybody seizes up and does not give much away. I had a beet contract before it went down. I regard compensation as my legitimate right for exiting white sugar production, an opinion shared by my colleagues present today. As young farmers we must take the long-term view. While it might not be a popular one, we must take it if we want the matter to proceed. Deputy O'Keeffe referred to blaming the Government. As a group of young farmers we do not blame anybody. We do not deal in that type of politics. We are here to get in early in the debate and make a positive contribution in order that we can bang our heads together and find a resolution.

I thank the other members for their positive contributions. Deputy Naughten spoke about the excise duty relief and asked whether we had made a submission to the Department of Finance. We did not. We should and will do so — I do not know when the cut-off date is. We will make a submission on the Green Paper on energy as quickly as we can. We support the change of law regarding inclusion. The Deputy will be aware of the 2010 5.75% inclusion target for petrol. Carbon credits represent another sticky wicket. It is our understanding that while we could investigate carbon credits which would have a knock-on effect for livestock producers down the road, they might not be the best way forward from a farming perspective. The other side is that now that the sugar beet industry has declined and if more of that tillage land drifts back into grass production, it will, in turn, lead to more livestock, which would mean we would be moving in the wrong direction regarding our Kyoto Protocol obligations. Agricultural crops represent an important part of the balance of nature. If they are upset in any way, it can have very serious knock-on effects down the road. The jury is still out on the issue of carbon credits.

Deputy Upton asked whether we had commissioned the study. We did not commission it. It was commissioned by Cork County Council after considerable lobbying and carried out by Cooley Clearpower Research. We accept its findings. We were delighted with its professional approach. With many others, we made a submission. The study details the various bodies approached to make an input. It is comprehensive.

We take on board the supportive comments of Deputy Ferris, for which we thank him. Deputy Wilkinson asked about subsidisation. I believe I answered his question in responding to Deputy O'Keeffe's questions. Deputy Stanton asked whom we envisaged carrying out a further study of the matter. The answer is that we do not know, but we would accept findings by any expert that are beneficial to us. I have covered most of the points.

Mr. Tait

I again thank the members of the committee for their positive comments. Ireland has committed to a 2% inclusion of bio-fuels by 2008 and a 5.75% inclusion of bio-fuels by 2010. Time is of the essence if we are to meet those targets. As young farmers we love farming. We want to see a future in farming and we think we should be taken seriously. These targets should be taken seriously. The only way to meet these targets is to take the necessary steps. It will be necessary to have approximately 10% of the tillage area in energy crops to achieve 2.5% of inclusion, so there is much to be done. We can talk and talk, but we would like to see some action.

As to the impact on young farmers in our area, there will be fewer farmers in the future. More and more young farmers in our group are becoming part-timers and falling out of farming. Their fathers are getting compensation and young farmers are taking over the farms and are left without compensation, without a crop, without a future. I want a future for all of us.

On Deputy Wilkinson's question regarding whether farmers can afford to grow at a certain price, the Teagasc tillage cost on returns for 2006 indicate approximately €490 per hectare, gross margin, on a 20 tonne crop of beet, which equates to approximately €200 per acre. When one looks at all the other crops being grown, it compares well with the best of them, although there is obviously a huge drop from when we produced beet for sugar. As Mr. Millerick said earlier, rotation is a big problem since sugar beet has gone out of the system. Beet farmers would argue that previously their second best crop was winter wheat which was grown after sugar beet. Winter wheat is now gone as well. For the overall viability of the tillage farmer it is important, whatever he or she grows, that he or she has a break crop that will be viable in the future. It might not give a huge amount of money but if it is there with the rest of the cereals there might be some chance in the future.

Deputy Stanton asked whether the knowledge base will be lost if beet growing finishes. Some beet is being grown around the country this year for feed, but the answer to the question is "yes". Once farmers are out of growing a crop for any length of time it is very difficult for them to get back into it on a large scale because the science moves on and new procedures and new methods of growing crops are introduced and there is also the expense of buying the specialised machinery that is required.

The issue of the impact of the loss of beet was raised. I covered that in terms of the economic loss, rotation of crops and so on. Beet was the cornerstone of rotation. Now that beet is gone it has left a big hole. There are other crops such as oilseed rape but they are in their infancy here and it is hard to know how they will work in the future.

I will be brief. I offer my apologies because I was called out of the room on more than one occasion. I welcome the group. As a representative of north Tipperary, which was a very strong beet producing area, I know the concerns of beet farmers are very much reflected in this proposal. Mr. Millerick said it was very controversial. Many fear the idea of an ethanol plant being reactivated in either Carlow or Mallow because their compensation might be eroded. We have all been warned about that. This group is the first to come before us and put proposals having done the research.

We must look towards the bio-fuels. The IFA is preparing its policy at the moment. I have not yet had a chance to read it but I will meet some of the members later this week to discuss the issue. I support bio-fuel development but the issues must be teased out more because there is strong resistance in my part of the country to having an ethanol plant in Mallow. That is the message I am expected to relay by the people of Munster. We must, however, concentrate on bio-fuels, and alternatives will have to be found for the beet producers who loyally produced beet for so long and who want their compensation protected now.

Would Mr. Millerick like to reply?

Mr. Millerick

The Deputy is correct to raise the issue of compensation. It is a very divisive issue. That is one of the reasons we are here. When this compensation package was announced the emphasis switched to harvesting the compensation, and rightly because it was justified. However, our belief is that this is a short-term strategy and that young farmers are not being properly represented on that issue. While we need compensation we also need phase 2, whatever that is. We are 100% in favour of maximum compensation but it is not beyond the bounds of possibility that this could be a win-win situation all around if serious political debate takes place. Given the age profile of sugar beet growers, there are plenty for whom this came at the right time. From the perspective of young farmers it did not. It shot us when we were getting off the ground. We would be happy to see an ethanol plant either in Mallow or on a greenfield site. We have no particular loyalty to Mallow although we have highlighted our concerns regarding its closure. A new ethanol plant would encourage a new group of beet growers. Many of the former beet growers would not grow beet. The new growers would be younger and more efficient, energetic and aggressive, as happens in all industries. Nothing will diminish the thrust of our campaign. We will represent our interest. We need an industry. We want compensation but we need something else as well.

Mr. Manning

I thank you, Chairman, and the committee for receiving our delegation and for engaging in an informed discussion with us. We ask the committee to consider setting up a forum and inviting the Minister and interested parties to explore the possibilities outlined in the Cork County Council report.

On behalf of the committee, I thank Mr. Manning, Mr. Tait, Mr. Millerick and Mr. Collins for attending today's meeting, for their interesting presentation on the production of bio-fuels and for a very interesting discussion.

Is it agreed that we send the group's presentation and a report of this discussion to the relevant Ministers?

Are the delegates aware that the Government has issued a Green Paper which will develop into a White Paper and legislation on the Government's energy policy? That Green Paper was launched by the Taoiseach and the Minister some weeks ago. The Green Paper would have taken the Mallow issue into account but it encompasses overall national policy. Have the delegates read that Green Paper? It is an excellent document.

Mr. Manning

We have read it.

I agree that the presentation be sent to the Minister for Agriculture and Food.

It was agreed earlier that the document be sent to the various Ministers concerned.

It is particularly important that it be relayed to the Department of Agriculture and Food. I have outlined my concerns regarding the north Tipperary farmers. They do not want to see their compensation eroded for the provision of an ethanol plant in Cork, Carlow or anywhere else.

No one wants to see compensation eroded. It is essential. A whole industry has closed down and compensation must be maximised. Nevertheless, people need to look to the future. Young farmers with 40 or 50 years ahead of them in farming must think of their families and of their future. The questions of energy and the environment must also be considered.

We have concluded the debate. Is it agreed that we send the presentation and a report of our discussion to the relevant Ministers? Agreed.

The joint committee adjourned at 2.05 p.m. until 4 p.m. on Wednesday, 29 November 2006.