The agreement on reform of the EU sugar regime provides for compensation to growers for the institutional price reductions. In the event of a decision to cease sugar production, the provisions of the temporary scheme for the restructuring of the sugar industry also come into play. Under this scheme, an application involving factory closure and renunciation of quota can be made for aid in respect of the economic, social and environmental costs of restructuring. The deadline for applications is 31 July 2006 for the first year of the scheme and 31 January for each year thereafter. In Ireland's case, the aid would be worth up to €145 million. At least 10% of the aid is reserved for sugar beet growers and machinery contractors to compensate notably for losses arising from investment in specialised machinery. That proportion may be increased by member states after consultation of interested parties provided that an economically sound balance between the elements of the restructuring plan is ensured. In addition, diversification funds of almost €44 million will also become available for Irish growers in the event that sugar beet production completely ceases in Ireland.
A provision which would have limited eligibility for restructuring funds to growers who had delivered beet in the year preceding the year of quota renunciation was dropped at Ireland's request. Until all the relevant EU legal texts have been adopted, it will not be possible to make definitive implementation arrangements for these compensation payments.