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Sugar Industry

Dáil Éireann Debate, Thursday - 13 December 2012

Thursday, 13 December 2012

Ceisteanna (7)

Éamon Ó Cuív

Ceist:

7. Deputy Éamon Ó Cuív asked the Minister for Agriculture, Food and the Marine the progress made to date with discussions in relation to the re-establishment of a sugar industry here including the growing of sugar beet for sugar production; the steps he has taken to promote this industry; and if he will make a statement on the matter. [55991/12]

Amharc ar fhreagra

Freagraí ó Béal (22 píosaí cainte)

I have a problem with this question. It is an absolute disgrace that this question has been tabled. The question asks the Minister what steps he is taking to promote the sugar industry. I have news for the Deputies opposite: we do not have a sugar industry. It is an insult to people like me and others who grew beet and worked in the factories that Members opposite would table a question like this.

It is absolutely unbelievable. Why do we not have an industry? We do not have an industry because a Fianna Fáil Minister in a Government of which Deputy Ó Cuív was a member shut it down and absolutely ruined our countryside.

I understand that but it is insulting to those of us who tried to maintain the industry. I could spend ten minutes talking about why we do not have a sugar industry and I am upset that Deputy Ó Cuív is not here to respond to me.

This is out of order, Deputy. I ask Deputy Barry to resume his seat.

I will resume my seat but it is an absolute disgrace that Deputy Ó Cuív tabled this question and his colleagues know that.

Deputy Barry, you cannot-----

It is insulting for those of us who have suffered. I am not going to allow this sort of behaviour. The Deputy tabled a question but he knew damn well-----

Deputy Barry is totally out of order.

The conduct of the Chamber is my responsibility.

I understand that.

I ask the Deputy to resume his seat. The Ceann Comhairle has listed the questions for oral answer and I am obliged to deal with the questions and invite the answers.

I understand that but the Deputies on the other side know that their party was responsible for closing down the sugar industry. It is a disgrace-----

That is a discussion for outside this House.

The Fianna Fáil Deputies brought it inside the House.

Deputy, please. I call on the Minister.

I can understand my colleague's frustration, as somebody who comes from a town where the sugar industry provided huge employment and significant opportunities for arable farmers in particular, that the industry is now no longer in existence because of policy decisions and mistakes that were made a number of years ago. That being said, I think it is possible for us to revive the sugar industry, but only if a number of things happen.

First of all, I have made it clear that the Government is not going to subsidise the setting up of a new sugar industry because we need to ensure that any new industry that begins in Ireland again can stand on its own two feet. However, I believe there is a fighting chance that the sugar industry will be set up again in Ireland on a commercial basis. Last summer we had two very professionally put together viability studies for the setting up of a sugar industry in Ireland again, from a processing point of view, which would involve building a large sugar processing plant and ethanol production facility. There are a number of people who are extremely committed to making this happen and they are very credible people. Michael Hoey, in particular, who heads up Beet Ireland, has put a huge amount of his own resources and time into putting together a very realistic business plan for rebuilding a sugar processing sector in Ireland. It is his job to put the business case together and he will do that, in terms of attracting investors and so forth. It is my job to ensure that if that business case is to proceed that there is either a sugar quota for Ireland in the future or there is no sugar quota in the European Union.

The current sugar regime in the EU will end in 2015 and Ireland has already been compensated to get out of that regime to the tune of €353 million. That means that we are not going to be able to produce sugar before 2015. The Commission is proposing that the sugar quota regime would end in 2015, which is something that Ireland supports. However, I do not think it is realistic because the countries that currently have sugar quota will insist on the quota regime extending beyond 2015, in my view, possibly until 2018 or 2020. In that context, we will be seeking an opportunity for Ireland to be allocated quota for domestic use, given the fact that we have been compensated to be out of the sugar industry until 2015 but not beyond that. Given the size of our food industry here and the volume of sugar use in that industry, we should be allowed a sugar quota to be able to support it. We have made a very strong case for this, both publicly and privately, to the Commission.

If there is potential to rebuild and regenerate the sugar industry in Ireland then clearly steps should be taken to do so. As the Minister has said, at least one feasibility study has been carried out-----

Two studies have been carried out.

Have those feasibility studies been made available to the Minister?

Have the studies been assessed by those who are dealing with the possibility of regenerating the sugar industry and if so, what does the assessment indicate? Is there a potential for the industry, provided certain things happen and if they do not happen, what is the position? What is our competitive position vis-à-vis other sugar producing countries across the EU?

The feasibility studies were very professionally done. Both of them were presented to me and both of them involved detailed meetings around the presentation of those feasibility studies. We then asked officials in the economics section of my Department to assess the feasibility of the business plans. It is important to say, though, that in order for those business plans to be viable, the price of processed sugar must remain at a level that can pay for all of this because we are talking about a €200 million investment to build the plant before any sugar beet can be processed to produce either ethanol or sugar. It is probably fair to say, as a rule of thumb, that these feasibility studies stack up if the price of sugar remains at over €500 per tonne. It is well over that level at the moment and actually, in the last 12 months, it was close to €800 per tonne because there were real shortages of sugar in the European Union. A lot of food industries in Ireland, some from my own part of the country, were finding it hard to get sugar at any price, which suggests that there is an argument around sugar security for both the pharmaceutical and food industries. Having said that, a judgment has to be made by the investors and those putting the business plan together as to what the likely sugar price will be in three, five or ten years time and what the price will be if sugar quotas are abolished in the European Union.

When we were producing sugar in Ireland we were not particularly competitive vis-à-vis other parts of Europe in terms of the tonnage of beet per hectare we were growing and the sugar content. However, I believe we can be much more competitive now and the proof of that can be seen in the United Kingdom at the moment. The varieties of sugar beet being grown there are highly competitive with other parts of Europe and there is no reason Ireland could not benefit from that. We can be competitive in this area but whether this happens will be contingent on where world sugar prices go. In my view, they are not likely to collapse any time soon. Sugar is in strong demand because consumption will continue to grow, both in the European Union and, more important, further afield.

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