John Browne (Wexford, Fianna Fail)

I thank Deputies Sherlock and Hayes for raising this important issue. The recent agreement by the Council of Agriculture Ministers on reform of the EU sugar regime was the culmination of a protracted and difficult negotiating process. I am satisfied that the outcome from Ireland's perspective was the best possible deal in the circumstances.

The reasons reform of the sugar regime could no longer be postponed are well known. As well as the increasing internal EU pressures to bring sugar into line with the other agricultural sectors, there were also strong international pressures. These fell under three main headings: the everything but arms agreement, EBA, the WTO Doha round of trade negotiations and the ruling by the WTO panel against aspects of the EU sugar regime, following a complaint by Brazil, Thailand and Australia. The recent decision by the WTO arbitrator that the EU must implement the panel ruling by next May added to the pressure for early action. There was considerable support for the ambition of the UK Presidency to achieve political agreement ahead of this month's WTO ministerial meeting in Hong Kong. In any event, the sugar regime in its current form expires at the end of June 2006 so there was need for an early decision on future arrangements to avoid a legal vacuum from next July.

While it is over a year since the Commission first outlined its thinking on the future shape of the sugar regime, the formal legislative proposals only emerged at the end of June 2005. These proposals turned out to be even more severe than anybody had anticipated and they went even further than the Commission had initially envisaged.

From the outset, the Minister for Agriculture and Food, Deputy Coughlan, availed of every opportunity to highlight the serious repercussions that the reform proposals would have for the Irish industry. Beet growing has long been a valuable cash crop for Irish farmers, as well as playing an important role in the tillage cycle as a break crop. In Brussels, Ireland played an active role in a group of 11 member states which had common cause in opposing the Commission's proposals. With her ministerial colleagues from these countries the Minister made joint submissions to the Agriculture Commissioner, the most recent one just before the formal discussions of the proposals at the October Council meeting. Furthermore, the Minister engaged, as did our officials, in an intensive round of discussions with the Commission, the Presidency and other member states with a view to modifying the proposals to take account of Ireland's particular circumstances.

On 24 November, after three days of intensive negotiations in Brussels, the Minister had to make a judgment on what was the best possible deal for Ireland, taking account of the negotiating positions being adopted by other member states. The outcome of the negotiations represents the best possible deal that could have been achieved and is a considerable improvement on the Commission's initial proposals of last June.

From Ireland's perspective, the main features of the agreement, as already announced, are a lower reduction in the support price of sugar than originally proposed — 36% instead of 39%, a phasing in of the corresponding reduction in the minimum sugar beet price over four years instead of the two-step reduction originally proposed, an increased rate of compensation for beet growers of up to 64% of the price reduction to be paid in the form of direct payments worth approximately €121 million to Irish beet growers over the next seven years, a once-off payment worth almost €44 million exclusively for beet growers in the event that sugar beet production ceases in Ireland, and an aid package of up to €145 million for the economic, social and environmental costs of restructuring of the Irish sugar industry involving factory closure and renunciation of quota.

The entire compensation package has an estimated value in excess of €300 million. It will be a matter for beet growers and Irish Sugar Limited to make decisions about sugar beet growing in light of the reformed sugar regime.

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