Áine Brady (Kildare North, Fianna Fail)

I am responding on behalf of the Minister for Agriculture, Fisheries and Food. I am pleased to address the House on this matter. As part of the reform of the EU sugar regime in 2006, a temporary restructuring scheme was introduced by the EU Commission with the aim of reducing EU sugar production in order to comply with WTO and other international obligations. The scheme provided an incentive for sugar processors to renounce sugar quota and dismantle the associated sugar processing plant and it provided compensation for affected stakeholders. Greencore plc, the sole Irish sugar processor and holder of the entire Irish quota allocation, decided to avail of this restructuring scheme. Accordingly, the company renounced the quota and dismantled the last remaining Irish sugar factory at Mallow in compliance with the conditions of the scheme.

This brought the Irish sugar industry to an end. As a result of the restructuring scheme, the overall EU sugar quota was reduced by almost 6 million tonnes, of which the Irish quota contributed some 200,000 tonnes. At the time of the reform negotiations, the Government made strenuous efforts to have the Commission's reform proposals modified in such a way that an efficient sugar industry could have been retained in Ireland. In the end, there was insufficient political support among our EU partners for the Irish position and our efforts had to be directed at achieving the best possible compensation package.

The sugar reform package was secured as a whole. Restructuring aid, diversification aids and the single payment was worth approximately €226 million to Irish beet growers and contractors. The restructuring and diversification aids were paid to stakeholders concerned in 2007 and 2008. Greencore plc received €127 million, giving a grand total of €353 million of aid to Ireland under this package.

Following the restructuring of the EU sugar industry, sugar production is now concentrated in 18 member states, as opposed to 23 before the reform, which enjoy favourable agronomic conditions and over 75% of production is accounted for by seven of these member states, namely France, Germany, Poland, UK, Netherlands, Belgium and Italy. There is no mechanism under the current regulations that allow for the re-instatement of the sugar quota for the growing of sugar beet in Ireland for the sugar industry. Any proposal to review the EU sugar quota regime is a matter for the EU Commission in the first instance and any proposal to re-establish a sugar factory in Ireland would, subject to the availability of quota, be a matter for commercial decision by interested parties. At the time of the closure of Mallow, Greencore plc was approached about the possibility of producing ethanol there but it was not considered to be a viable proposition.

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