Simon Coveney (Cork South Central, Fine Gael)

At present, no. We have gone through both studies with a fine tooth comb in the Department. The figures stand up but the key issue is the impact on sugar prices when and if we get rid of quotas in the European Union, when Germany, France, Poland and Britain dramatically increase the volume of sugar they are producing. Personally I think it will not collapse, although there will be a reduction in prices. Whether prices will fall by 40%, which would be needed to make it viable here, remains to be seen.

It is important, however, to note that Ireland is not a competitive place, from a global or European perspective, to produce sugar. Sugar yields and sugar content in sugar beet are not high in Ireland because of the climate. Producing sugar from sugar beet as opposed to from South American sugar cane is not competitive. Having said that, because of the extraordinary supply problems with sugar, the likely increase in demand for sugar in future, the importance of sugar security for the food industry, and the value of sugar beet as a rotation crop, which is grown on about 10,000 hectares of land at present when there is no sugar industry but because farmers like to grow it and feed it to cattle, there are many reasons why farmers might like to pursue this course of action. The responsibility for me is to be up-front about the risks and opportunities and that is why I have said if we can predict a fall in sugar price below €500 per tonne of processed sugar, we are in dangerous territory but if we can make an educated guess that the price will remain about that, we are in an interesting position.

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