Simon Coveney (Cork South Central, Fine Gael) | Oireachtas source

I am under a bit of time pressure too, but that is my own fault. In response to questions about sugar, I have always said that I would love to see the sugar industry rebuilt in Ireland, but I have also said I am not going to consider supporting that financially and committing public money to it only to see it collapse at some stage in the future.

Any rebuilding of the industry must be based on sound commercial principles. It has to make sense to grow, process and produce sugar in Ireland. In my view, we have a good chance of making that commercial case. However, the Government will not provide subsidies to an industry if it will collapse in the future without those subsidies. The business case must be made. The promoters of the sugar industry are not asking for State subsidy; they asked for an end to EU quotas. That is what we have achieved and it is over to them now. They and the growers will be required to put together a business case to show how they would build, finance and pay for a processing plant that could also produce bio-fuels. They are quite confident that they can do it.

Ireland is very competitive at producing certain foods. Our climate is very suitable for growing grass and I believe we can be competitive at growing sugar beet, even though when it was produced in the past we were not as competitive as other parts of Europe. I think competitiveness can be improved by the use of new varieties, as demonstrated in the UK. The issue is that we want food to be produced in Ireland at a competitive price. I hope we can do that in the case of sugar, but that commercial case and the backing finance have to be put together. I presume Enterprise Ireland or the other arms of the State can help in that process to a certain extent. However, we have no intention of creating an artificial market for sugar that then collapses at some stage in the future after people have committed significant funding and effort in order to rebuild it. The policy is in place to allow the rebuilding to happen because quotas will be gone. It will take until 2017 to be ready in any case. It is now over to the promoters and developers of this project to make it happen. I will be as supportive as I can but given the money available to me we need to be very careful about how we spend it.

The Commission is holding a conference on the issue of milk prices in September which will deal with post-quota market supports for milk. Some countries are very concerned. These are countries which do not produce milk as competitively as Ireland and may have an average herd size of three or four cows. Some central and eastern European countries are in that position. They are concerned that they cannot compete on milk prices against Ireland or Denmark. Some of those questions will be teased out at the conference. However, this was a red line issue for me. The Irish Presidency was in receipt of proposals for some kinds of supply control measures post-milk-quota. I said that if that was in the CAP reform I could not and would not support it. Ireland has spent an absolute fortune in time and money preparing for the move away from a quota system. The growth potential under the Food Harvest 2020 targets is a 50% increase in the volume of milk produced over five years. Co-ops, companies and farmers are spending significant money to facilitate that growth. We need to ensure it happens and we will fight hard for it in the autumn. Some safety-net proposals will be made and I need to ensure that those safety nets do not prevent us from achieving the growth we want to deliver.

The scheme for young farmers was an Irish proposal which was welcomed by everyone. Members asked about the consultation process. We have not yet agreed an exact timetable. I would like to have a focused consultation process that does not go on forever. We could debate and discuss this for months because it is so complex. However, we need to make judgment calls and decisions. We have the information on which to base those decisions so that implementation can be planned in a way that does not take farmers by surprise and so that everyone is informed about what is happening and how to prepare for it. I would like to see a full year lead-in period. I propose that we focus intently on this issue. The month of August will be a holiday time but I would like to make decisions on Pillar 1 towards the end of the September to October period because that pillar represents €1.2 billion. It will take us a little longer to put rural development schemes in place but I hope that decisions on Pillar 2 can be made before the end of the year.

We have the option to choose either 2013 or 2015 as the reference year. I suspect the strong preference will be for 2013 because the die is cast with regard to land and entitlements and the applications have been made. I hope this will end land speculation by people trying to work the system.

Inspections are a separate but linked issue. There are no additional inspections in Ireland above the number required. I thought the headline referred to was unhelpful, but the article made a more reasonable point. We are required to inspect a certain percentage of farms every year and we are audited on that basis. If we do not fulfil the requirements on inspections, auditing and penalties, we are fined through disallowances, whereby the Commission will not release moneys owed to Ireland. I take the point that the more complex the system, the more likely it will be that farmers will break the rules by accident in many cases. We need to keep the system as simple as possible to ensure that farmers are not being caught out by the complexity of a new system and that penalties are not applied to farmers who have made honest mistakes. That has happened with regard to mapping and digitisation issues. The appeals system is designed to allow for fair treatment of farmers.