Mary Wallace (Meath, Fianna Fail)

I thank the Deputies for their kind wishes. I welcome the opportunity to update the House on this issue. The political agreement on reform of the sugar regime, reached last November, provides that in the event of a decision to cease sugar production in Ireland, a restructuring fund of up to €145 million becomes available for the economic, social and environmental costs of restructuring the Irish sugar industry. The fund is subject to the submission of a detailed restructuring plan for the industry involving factory closure and the renunciation of the sugar quota. The agreement 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. That 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 agreement provides that the restructuring scheme will be funded by a restructuring levy payable by sugar processors in each of three marketing years, starting in 2006-07. For the Irish quota of 199,000 tonnes of sugar, the levy payable would be €25 million in the marketing year 2006-07. The levy is paid by the processor and has no impact on the minimum price for sugar beet for 2006 or subsequent years as set out in the agreement. To facilitate payment of the levy by the processor, the price of sugar remains unchanged in the first two years of the reform.

The publication of the EU legal texts giving effect to the political agreement on the reform was delayed pending the opinion of the European Parliament. The Parliament's opinion was delivered on 19 January and the texts of the draft Council regulations then became available. These texts have been subject to technical discussions at working group level over recent weeks. The Minister for Agriculture and Food met Commissioner Fischer Boel last week in Brussels to discuss a number of issues arising from the texts. At that meeting the Commissioner clarified that sugar produced in the first year of the reform will be liable to the restructuring levy, but in the event of the quota being renounced for the second year, the levy will not be payable in that or subsequent years.

Another issue raised was the inclusion in the texts of a requirement to deliver beet in the year preceding the year of quota renunciation to qualify for restructuring aid. At Ireland's request this requirement has been dropped from the draft regulations. These will now be presented to the Council of Agriculture Ministers meeting in Brussels next week for adoption.

The European Commission is working on preparing detailed implementation rules which can only be finalised once the Council texts have been adopted. The restructuring scheme will be a complex measure to implement and until all the various legal texts have been adopted, it will not be possible to provide details of the definitive implementation arrangements. We appreciate the need to provide as much clarity as possible on the reforms. The Minister announced last week her intention to use the three-year average of the individual farmers' contracted tonnage of beet for the 2001, 2002 and 2004 marketing years as the reference period for the single payment compensation for sugar beet growers. I thank Deputy Sherlock for giving me the opportunity to clarify that.

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