Martin Ferris
Ceist:116. Deputy Martin Ferris asked the Minister for Agriculture, Food and the Marine his views on the prospects for the reopening of the Irish sugar beet sector. [7360/13]
Amharc ar fhreagraTuesday, 12 February 2013
Ceisteanna (116)
Freagraí ó Béal (5 píosaí cainte)
As Deputy Martin Ferris will know, there are a number of interest groups in the State which would like to see the return of a sugar refining industry, not least farmers who want to grow sugar beet both as a valuable cash crop and as a valuable break crop in arable farming.
That is even more important, given the potential for new greening measures in the Common Agricultural Policy reform process. I am very supportive of these efforts, but two things need to happen before we see a new beet factory built in Ireland. First, Ireland needs to have a quota to produce sugar or else we need to have no quotas in the European Union.
There is a European sugar quota regime in place. As Ireland was compensated to get out of sugar production a few years ago, under EU rules, we cannot produce sugar, even if we wanted to and had the capacity to do so. That sugar regime is due to end in 2015. My position is that we should do away with sugar quotas post-2015 and that countries such as Ireland should be able to produce sugar if they can put together a business case to do so and get investors to support it. That is unlikely, however, because there are strong vested interests who want to see a sugar quota regime continue in place. Sugar quotas will end at some stage between 2015 and 2020. I have repeatedly asked that if the sugar quota regime continues after 2015, countries such as Ireland which have been compensated to get out of sugar production but only until 2015 should be given a limited sugar quota for their own domestic use in order that they can get back into producing sugar.
The second point is that there needs to be a business case made, backed by investors and, presumably, banks, to make it possible to spend the €200 million required to build a sugar factory and an ethanol plant. Two very credible feasibility studies were published last summer and my job is to meet the first challenge to try to get a quota or secure the absence of quota to allow these proposals to press ahead if it is economically viable to do so. That will be determined by the price of sugar internationally.
The Minister is as aware as I am and many other Deputies of the dishonest grounds on which the quota was abolished in 2006 when Greencore and the then Minister for Agriculture, Mary Coughlan, claimed the European Union was forcing the closure. The European Court of Auditors subsequently rubbished this claim. The Minister has mentioned the value of growing sugar as a break crop and its value as a cash crop, particularly for small farmers. He has indicated that he supports the effort to procure a quota from 2015 onwards if the European Union will not abolish the quota regime. Is he prepared to put his full weight behind this effort to try to get a quota for producers who are intent on growing beet again? Will he indicate the size of quota for which he would be looking amd how many jobs this would create and the knock-on value to the economy in general?
They are all valid questions, but I have made the case to the Commission, formally and informally. I have speaking notes to show that I have raised this issue at Council meetings. There are one or two other countries in a similar position, Slovenia probably being the best example. Countries that continue to have large sugar quotas and industries are anxious to protect the status quo because last summer the value of sugar reached new highs, with processed sugar reaching a figure of over €700 a tonne.
A rule of thumb would be that as long as the price of processed sugar stays above €500 per tonne, the feasibility studies I saw last summer stack up in terms of the viability of building a plant to produce sugar and ethanol for over €200 million and actually being able to pay that money back. We are two stages away from that, however. My job is to focus on getting a compromise agreed between those countries - some of which are powerful - that want to see sugar quotas retained because it protects the EU sugar industry, and other countries that, because of the global shortage of sugar, want a free market on the world stage so that the EU can trade in the market. I want the industry to press ahead with this proposal, if it is feasible, and I do not want quotas inhibiting that. We will try to achieve this in the Common Agricultural Policy, CAP, negotiations. That is not going to be easy, however. It is difficult to put an exact figure on the number of jobs that could be created but it would be a significant industry.
The Minister said there was a global shortage of sugar. This would be a persuasive argument in getting the EU to tap into that market. The fact that we hold the EU Presidency gives us an ideal opportunity to push this forward and a quota will be made available to Ireland and other member states seeking one. The Minister believes the quota will be gone before 2020. How confident of that is he?
This issue is one of many that are being debated as we draw to a conclusion in the Council of Ministers on a negotiating position on CAP reform. Then we can go into a trialogue process to agree in co-decision with the European Parliament what the CAP will look like for the next seven years. Hopefully, the Irish Presidency will be able to conclude all of that before the end of June. Sugar is one of the items under discussion and it is one of the four regulations on which we must achieve a common position. My view is clear on this. During our Presidency of the Council of the European Union, my job is to get a compromise with which everyone can live. Everyone knows the Irish perspective on this. We will see a compromise whereby there will be a midpoint between 2015 and 2020 - it will probably be closer to 2020 - for ending sugar quotas. My view is that they should be stopped after 2015, letting the free market take effect. If there is to be an increase in quota - which there needs to be - we would be looking for a quota sufficient for the Irish market for three or four years, namely between 180,000 and 200,000 tonnes. One needs such amounts to achieve economies of scale to produce sugar efficiently.