Mary Coughlan (Donegal South West, Fianna Fail)

The recent agreement reached by EU Ministers at the Agriculture and Fisheries Council about the reform of the EU sugar regime was the culmination of a protracted and difficult negotiating process. The outcome represents the best deal that could have been achieved for Irish beet growers in the circumstances. It represents a considerable improvement on the Commission's initial proposals, which were made last June. The main features of the agreement are a lower reduction — 36% rather than 39% — than originally proposed in the support price of sugar; a phased introduction of the corresponding reduction in the minimum sugar beet price over four years, rather than the two-step reduction that was 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 one-off payment of almost €44 million exclusively for beet growers if sugar beet production ceases in Ireland; and an aid package of up to €145 million to meet the economic, social and environmental costs of restructuring of the Irish sugar industry in the event of factory closure and the renunciation of quota. The entire compensation package for Ireland has an estimated value of more than €300 million.

Beet growers and Irish Sugar Limited will be responsible for making decisions about sugar beet growing in light of the reformed sugar regime. A one-off payment of almost €44 million will be available for growers, as I have said, if sugar production in Ireland ceases. In such circumstances, a restructuring fund of up to €145 million will be made available to provide compensation for the economic, social and environmental costs of factory closure. The agreement provides that at least 10% of that fund will be reserved for sugar beet growers and machinery contractors, to compensate them for losses arising from their investment in specialised machinery. The fund may be increased by member states after they consult interested parties, as long as the financial breakdown of the elements of the restructuring plan is balanced in line with a sound economic proposal.

Formal legal texts giving effect to the agreement will be adopted by the Council of Ministers early next year, after the opinion of the European Parliament has been received. The Commission will then come forward with proposals for detailed implementing rules. It is not possible to give further definitive information in advance of the adoption of the relevant regulations. The Department of Agriculture and Food will make timely arrangements for implementing the new regime in due course, as it did during the earlier phases of Common Agricultural Policy reform.

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