Following the introduction of the Single Payment Scheme last year, farmers now have the freedom to choose whatever farming enterprise is most appropriate to their circumstances. Under the agreement on reform of the EU sugar regime, the Single Payment Scheme is being extended to cover sugar beet compensation.
The sugar reform agreement also provides for the introduction of aid for diversification measures where sugar beet production completely ceases. This aid, worth almost €44m, would be drawn down in the framework of a national restructuring programme. Under the Commission implementing regulation, Ireland will be required to submit the restructuring programme to the Commission by the end of thisyear.
I am aware there has been renewed interest among farmers in growing energy crops as a feedstock for bioenergy purposes following the closure of the sugar industry. The key issue for farmers considering energy crops, as an alternative crop, is the expectation of a good economic return. In this context, the Government announced in the last budget, an expanded excise relief scheme valued at €205m to stimulate the demand for biofuels. At farm level, support by way of a premium of €45 per hectare is currently available under the EU Energy Crops Scheme. I called last February for the premium to be reviewed and the EU Commission undertook to review the operation of the scheme. Last week, the Commission published a Report on the implementation of the scheme, which my Department is examining.
I believe the development of an indigenous bioenergy industry would not alone create new opportunities for farmers to diversify into growing energy crops and other forms of renewable energy, but is important for environmental and energy supply reasons. A Ministerial Taskforce has been established to oversee preparation of a National Bioenergy Strategy by end 2006.