Brendan Smith (Cavan-Monaghan, Fianna Fail)

I thank Deputy Stanton for raising this important issue. I wish to put on record that the Minister did not mislead anyone with regard to the levy. 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 on which political agreement was reached by the Council of Ministers in November 2005.

The main features of the reform package have already been widely publicised. After a long and difficult negotiating process, we succeeded in having the proposals changed to provide a longer phasing-in period, as well as a number of options to enable the sector to adapt to the new regime. There will be a lower reduction in the support price of sugar than originally proposed — 36% instead of 39% — as well as phasing in of the corresponding reduction in the minimum sugar beet price over four years, instead of the two-step reduction originally proposed.

We also secured an enhanced compensation package. Beet growers will be compensated for up to 64% of the price reduction in the form of direct payments which will be worth approximately €121 million to Irish beet growers over the next seven years. A once-off payment of almost €44 million will also become available in the event that sugar beet production ceases in Ireland. In that event also, an aid package of up to €145 million becomes available for economic, social and environmental costs of restructuring of the Irish sugar industry involving factory closure and renunciation of quota. This would involve the submission of a detailed restructuring plan for the industry.

The reform agreement reached last November provides that at least 10% of the restructuring fund shall be reserved for sugar beet growers and machinery contractors to compensate notably for losses arising from investment in specialised machinery. This proportion may be increased by member states after consultation of interested parties provided that an economically sound balance between the elements of the restructuring plan is ensured. The entire compensation package has an estimated value in excess of €300 million.

The final legal texts giving effect to the reform agreement could not be approved by the Council of Ministers until the opinion of the European Parliament had been received. That opinion was delivered on 19 January and it is now expected that the legal texts, which are currently being discussed at technical level in Brussels, will be approved by the Council at its meeting in February. In parallel, the EU Commission is working on preparation of detailed implementation arrangements which can only be finalised once the Council texts have been adopted. Until all the various legal texts have been adopted, it will not be possible to finalise the implementation arrangements definitively but all parties concerned appreciate the importance of having this process completed as soon as possible.

The Minister and her officials have been keeping in close touch with stakeholders about these developments. One issue on which she hopes to decide shortly is the choice of reference year or years for determining an individual farmer's single farm payment entitlements. I am glad to have the opportunity to update the House on this important issue. It is up to the growers concerned and Irish Sugar Limited to make commercial decisions in light of the new regime. Teagasc, in accordance with its statutory responsibilities, is available to provide advice where required.

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