Joe Sherlock (Cork East, Labour)

The issue of the overhaul of the EU sugar regime is one which, if the current proposals are agreed, will signal the demise of the Irish sugar industry and with it the loss of in excess of 1,000 jobs in sugar manufacturing and associated industries. In EU terms, the Irish sugar quota is small, amounting to just over 1% of the total EU quota, but this does not give an accurate representation of the importance of the industry to Ireland. More than 3,700 farmers grow sugar beet under contract to Irish Sugar Limited and receive approximately €75 million annually for the crop. While we accept that some change to the regime is inevitable, the European Commission proposals are too radical. The price cuts proposed for sugar and sugar beet are very severe. The impact of the current reform proposals will result in the phasing out of sugar production in this country.

The European Parliament report by Mr.Fruteau states that, under the current proposals for sugar, the current support price of €631.90 per tonne is to reduce in stages to €385.50 per tonne from 2008-09. This is a cut of 39% compared with the cut of 33% proposed in the Commission communication of last year. This is unsustainable for any Irish farmer. The minimum cut in the price of sugar beet over two years is to be from €43.63 per tonne to €25.05 per tonne from 2007-08. This is a cut of 42% compared with the cut of 37% proposed in the Commission communication. This is also unsustainable. Compensation for farmers remains at 60% of the drop in the support price. This is to be paid as part of the single payment scheme. Ireland's scope is €11 million from 2006-07 and €18 million from 2007-08. For Irish growers, this works out at €7.35 per tonne of beet in 2006-07, rising to €12.03 per tonne of beet from 2007-08.

I call on the Minister to reject these proposals and, furthermore, I insist that she call for no conclusion on an agreement in advance of the November meeting of the Council of Ministers. We must await the outcome of the World Trade Organisation meeting in Hong Kong in December. The outcome of that meeting will have a direct bearing on the price at which sugar sells in the European Union. I call for prudence in this matter. The outcome of the WTO meeting will have a direct bearing for the EU-wide sugar regime. I appreciate that negotiations are difficult but if they result in the loss of a viable industry and no Irish sugar-producing facility, they will have untold consequences and leave us to the mercy of the European sugar interests. That is a vista we do not want to contemplate.

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