Denis Naughten (Longford-Roscommon, Fine Gael)

With the agreement of the House, I will share time with Deputy Stanton. I thank the Chair for the opportunity to raise this extremely important issue.

There is no doubt that the European Commission's proposals on the so-called reform of Europe's sugar regime will decimate the Irish sugar industry and must be vehemently opposed by the Irish Government. The proposed 39% price cut over two years, which in real terms is closer to 50%, will directly impact on the viability of farming for the 3,700 farmers who grow 80,000 acres of beet. These proposals will bring the price of beet below production cost and will not only wipe out the industry, including 288 direct jobs in sugar processing in Mallow, but will also destroy the livelihoods of 240 hauliers, seasonal workers and many others along the supply and service chain.

It is imperative that the Minister for Agriculture and Food forms alliances with other member states, especially those where sugar production as a whole is threatened by these proposals, including Italy, Portugal, and Greece. With those countries, it is important that Ireland ties up with Spain, Latvia, Lithuania, Estonia, Finland and Hungary, where the future of the sugar industry is also under a cloud. If these ten countries work together, their 121 votes can provide a blocking minority in the Council of Ministers. At a minimum, the Minister must ensure that farmers are fully compensated for any and all losses in income associated with the reform of the sugar regime.

It is also imperative that there is a longer lead-in time than the two years currently proposed before the cuts become operational. Any phased reduction in price support for sugar must happen in tandem with the establishment of alternative, financially viable enterprises for the Irish tillage sector, for example, biofuels. Sugar beet is one of the best raw materials for the production of bio-ethanol, but as things stand it is uneconomical. The Government could be more proactive and secure the future viability of the sugar beet sector by widening the value of excise relief for biofuels. International studies have shown that there is a significant return to the Exchequer, both from an economic activity point of view and through the reduction of environmental damage.

Today's proposals by the Commission highlight the fact that the Greencore decision and the Minister's failure to use her golden share to defer the closure of the Carlow sugar factory were fatally flawed. It seems that had this decision been delayed, there would be additional compensation available to Greencore and the farmers who supplied the plant. In light of the Minister's failure to act on the closure of the Carlow plant, she must put forward an irrefutable case for compensation which may be made available on a retrospective basis with regard to the Carlow sugar factory.

It is important to point out that the suggestion that these proposals will benefit poor countries is misleading, to say the least. For example, a cut in EU sugar prices would have a negative impact on less developed African countries, which currently gain from the high prices guaranteed for sending their sugar cane to Europe.

Currently, Ireland does not over-produce sugar. We meet our own demands. Our sugar industry is commercially sensitive and should be defined as such. Will the Minister clarify who controls our sugar quota? This debate has gone on for ages. We want legal clarity on the issue and we want it now.

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