Michael Moynihan (Cork North West, Fianna Fail)

Thank you, a Cheann Chomhairle, for the opportunity to contribute to the debate. I thank the Minister for Agriculture and Food, Deputy Coughlan, for visiting Cork North-West in October. We met many delegations from the farming community from right across the industry, including the co-operatives. It would be remiss of me not to mention New Zealand Genetics, one organisation we met at that time. We had a great day with the Minister, Deputy Coughlan, Peter Daly, its chief executive and his family. They had a great industry built up over a ten year period. It made a great contribution to the Irish Breeding Society and so on. Mr. Peter Daly, who was a neighbour of mine, lost his life in a tragic farming accident in January. I take this opportunity to extend our sympathy to his wife and family, and to all who mourn his passing.

The Minister, Deputy Coughlan, has been a great ambassador for agriculture. On many occasions since her appointment she has encouraged agriculture. She is ably assisted by her two Ministers of State, Deputy Browne and Deputy Brendan Smith, who know the agricultural scene well and have its future at heart.

In the few minutes allotted to me tonight, I will talk about the sugar reforms and where Irish Sugar stands at this stage. A decision on the future of beet growing in Ireland will be a commercial decision taken by the stakeholders concerned, having regard to the reform of the EU sugar regime, which was agreed by the Council of Ministers in November. The regime has remained largely unchanged for 40 years but its reform was inevitable and could no longer be postponed for reasons that are well known to and accepted by all in this House.

There were increasing internal EU pressures to bring sugar into line with all other agricultural sectors. There were largely international pressures arising from the Everything But Arms Agreement, the WTO 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 decision by the WTO arbitrator that the EU must implement the panel's ruling by 22 May 2006 added to the pressure for early action. There was considerable support for the ambition of the UK Presidency to achieve political agreement ahead of the WTO ministerial meeting in Hong Kong in December. As the sugar regime in its current form expires at the end of 2006, there was need for an early decision on future arrangements to avoid a legal vacuum from next July.

The political agreement in November in regard to reform of the regime was the culmination of a protracted and difficult negotiating process. During that negotiating process, the Minister engaged with the stakeholders on a regular basis and had their full support for her negotiating stance. The outcome from Ireland's perspective was the best possible deal in very difficult circumstances. The main features of the reform package have already been widely publicised. The Minister 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 reductions in the minimum sugar beet price over four years instead of the two-step reduction originally proposed.

The Minister 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 that 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 for the benefit of beet growers in the event that sugar beet production ceases in Ireland. In that event also, an aid package of up to €145 million would become available for the economic, social and environmental costs of the 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 provides that 10% of the restructuring fund will 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 with interested parties, provided that an economically sound balance between the elements of the restructuring plan is ensured. The entire compensation package for Irish stakeholders has an estimated value of in excess of €300 million.

The final legal text of the reform has yet to be adopted. I understand the Minister will meet the Council of Ministers within two weeks to discuss this matter. I congratulate the Minister for Agriculture and Food, Deputy Coughlan, and her Ministers of State for the enormous amount of work they are doing on behalf of Irish agriculture. All of us who have the betterment of the Irish agriculture industry at heart should strive to ensure there is a viable future for farming.

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