Denis Naughten (Longford-Roscommon, Fine Gael)

The Department of Agriculture and Food has been fully conscious of the implications of the nitrates action plan but for some unknown reason that has not been communicated to the Department of the Environment, Heritage and Local Government. That was publicly admitted before Christmas at a meeting of the Joint Committee on Agriculture and Food. Sadly, the Minister has not taken action. It is about time she started taking an active role on the issue.

The Minister has also failed on the sugar issue. She failed to make the case at EU level for the survival of the Irish sugar industry. First, she failed to ensure the retention of the Carlow sugar plant until the negotiations were complete, which could have strengthened her hand in those negotiations. Instead she turned her back on the Carlow plant and the people of Carlow. She also failed to impress on the Commission that Ireland was in a unique position in that it had only one processing factory and was not contributing to the over-production of sugar within the EU, and that restructuring was naturally taking place in Ireland.

A key question which the Minister failed to have answered by the Commission was whether a member state should have the right to produce sugar, and whether Ireland had that right. Even after the negotiations nobody seems to know what exactly was agreed. Does the Minister know what she signed up to and at what cost to Irish farmers? There are currently 3,700 farmers who grow sugar beet and who are in limbo on a number of fronts. What was the specific detail of the Minister's agreement when she signed up to facilitate the closure of the Irish sugar industry? What will be the reference year or years on which compensation will be based? Will farmers be forced to grow beet at a loss in 2006? Under what circumstances must the restructuring levy be paid if there is sugar production in 2006 or 2007?

The Minister claims that there is no liability but the European Commission stated in a response to my colleague, Mairead McGuinness, MEP, that Ireland would be liable for the levy in both 2006 and 2007 if we were to produce sugar in both years. Who will be paid compensation, under what circumstances and at what level? Under the restructuring fund of €145 million, is it the case that growers and contractors are entitled to a maximum of 10% or at least 10%? That is a key question. What about the 1,000 or so people employed in the sugar beet processing industry and ancillary activities?

Farmers must decide whether to grow sugar beet this year. They must make arrangements about matters such as conacre, fertiliser, seed and getting land ready. Despite a week of negotiations last November, no one, including the Minister, seems to know or have answers in respect of what was agreed. We are now told that we must wait for the legal text before we know what is happening.

We know there is compensation in respect of the price reduction and a once-off payment of €4 million in the event of sugar beet production ceasing in this country. What about the €145 million compensation available for the economic, social and environmental costs of the restructuring of the Irish sugar industry involving factory closure and renunciation of quota? Last week, the Minister of State stated that "at least 10% of the fund shall be reserved for sugar beet growers and machinery contractors to compensate notably for losses arising from investment in specialised machinery". However, no mention was made of farmers who purchased sugar quota.

This is a mess and the Minister does not seem to know exactly what is happening. She cannot provide answers on the matter. I call on her to immediately instigate multi-party talks on the future of the sugar industry and the scale of the compensation to be made available to beet growers and contractors. The forum must be composed of representatives of growers, contractors, Greencore, the Departments of Finance, Agriculture and Food, Enterprise, Trade and Employment and Communications, Marine and Natural Resources, the employees of the company and the Attorney General to deal with all the complex issues raised by the reform of the sugar industry.

We need immediate clarification on the production of sugar in 2006 and legal clarity on the ownership of the sugar quota and the powers of the Minister for Agriculture and Food, who holds a golden share in Irish Sugar. While the Minister has stated that the quota is not an asset, that is not true. Many farmers have traded quota in the past and now the EU is going to buy back quota from member states. This clearly indicates that the EU believes that the quota is an asset. If that is so, the Minister for Agriculture and Food, Deputy Coughlan, and the Attorney General must provide clarity on the ownership and the powers the Minister has under her golden share.

We must know what plans, if any, the Government has to kick-start the bio-fuel sector, which could be a valuable outlet for sugar beet. Sugar beet is one of the best raw materials for the production of ethanol. However, as matters stand, it is not economical without excise reduction or removal. The Government could be doing more to look beyond mere sugar production to harnessing sugar beet growth for bio-energy.

Fine Gael has published a set of proposals on this topic, including the removal of all excise duties on bio-fuels produced from all renewable energy crops and funds for the establishment and operation of a number of bio-fuel processing plants. Fine Gael also proposes to legislate for all motor fuels to include a blend of fuel from renewable sources. All petrol sold at filling stations will include a 5% bio-ethanol mix and all diesels will contain a 2% bio-diesel mix. This would not necessitate the conversion of standard motor engines and would represent a good start to reducing emissions from cars. It would provide an immediate market for farmers to sell energy crops.

If the existing plant in Mallow were used to produce bio-ethanol from beet, it would dramatically reduce the Greencore case for compensation as it would not need to foot the cost of job losses or decommissioning the plant to return it to a greenfield site. Furthermore, under no circumstances can Greencore be compensated for the closure of the Carlow plant, a decision that seriously undermined the Irish negotiating position and that the company stated at the time stood up to commercial scrutiny.

Has the Minister held discussions with the Minister for Communications, Marine and Natural Resources on the issue of utilising the sugar beet crop or is it like her consultation with the Minister for the Environment, Heritage and Local Government on the nitrates directive? Each time I asked the Minister for Agriculture and Food about the nitrates directive, her first comment was that it was an issue for the Minister for the Environment, Heritage and Local Government.

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