I propose to take Questions Nos. 262 to 265, inclusive, and 272 to 274, inclusive, together.
The recent political agreement by the Council of Agriculture Ministers for the reform of the EU sugar regime was the culmination of a protracted and difficult negotiating process. During the negotiations, I availed of every opportunity to highlight the serious repercussions the reform proposals would have for the Irish industry. I pointed out that beet growing has long been a valuable cash crop for Irish cereal farmers, as well as playing an important role in the tillage cycle as a break crop.
Nevertheless the outcome, in my view, represents the best possible deal that could have been achieved for Irish stakeholders in the circumstances and is a considerable improvement on the Commission's initial proposals of last June. The main features of the agreement include a lower reduction in the support price of sugar than the originally proposed 36% instead of39%; a phasing-in of the corresponding reduction in the minimum sugar beet price over four years, instead of the two-step reduction originally proposed; an increased rate of compensation for beet growers of up to 64% of the price reduction, to be paid in the form of direct payments worth approximately €121 million to Irish beet growers over the next seven years; a once-off payment worth almost €44 million exclusively for beet growers in the event that sugar beet production ceases in Ireland, and an aid package of up to €145 million for economic, social and environmental costs of restructuring of the Irish sugar industry involving factory closure and renunciation of quota.
The entire compensation package for Ireland has an estimated value in excess of €300 million. It will be a matter for beet growers and Irish Sugar Limited to make decisions about sugar beet growing in light of the reformed sugar regime. In the event that sugar production ceases in Ireland, a once-off payment of almost €44 million would be available for growers. Also the restructuring fund of up to €145 million would become available to provide compensation for the economic, social and environmental costs arising from factory closure.
The agreement provides that at least 10% of the fund shall be reserved for sugar beet growers and machinery contractors to compensate notably for losses arising from investment in specialised machinery. This amount may be increased by member states after consultation of interested parties as long as the financial breakdown of the elements of the restructuring plan is kept balanced according to a sound economic proposal.
The formal legal texts giving effect to the agreement will be adopted by the Council of Ministers early next year after the opinion of the European Parliament has been received. The Commission will then come forward with proposals for detailed implementing rules. Pending the adoption of the relevant regulations it is not possible to give further definitive information. However, as with the earlier phases of Common Agricultural Policy reform, the Department of Agriculture and Food will make timely arrangements for implementing the new regime in due course. The new regime will come into effect for the 2006-2007 marketing year, beginning on 1 July 2006.