Dáil debates

Thursday, 8 December 2005

Priority Questions.

Alternative Energy Projects.

3:00 pm

Photo of Martin FerrisMartin Ferris (Kerry North, Sinn Fein)
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Question 3: To ask the Minister for Agriculture and Food if she will make a statement on the future of the sugar beet industry here; and the possible use of sugar beet as an energy crop. [38593/05]

Photo of John BrowneJohn Browne (Wexford, Fianna Fail)
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Political agreement on reform of the EU sugar regime was reached at the meeting of the Agriculture and Fisheries Council on 24 November 2005. It will be a matter for beet growers and Irish Sugar Limited to make decisions about sugar beet growing in light of the reformed sugar regime. The reform agreement, as the Minister has already outlined, includes a compensation package with a potential value of more than €300 million for Ireland, including measures that will apply in the event that sugar production ceases in Ireland.

While the production of ethanol from sugar beet is a possible alternative outlet for farmers, as matters stand, Irish Sugar Limited has arrangements in place to process the full Irish sugar quota at its Mallow plant which has been upgraded for that purpose. The question of establishing a bioethanol plant based on sugar beet would be a matter for commercial decision.

In future, under the decoupled system of support payments, farmers will only grow crops which provide an economic return. The announcement in yesterday's budget of the excise duty relief scheme to cover 163 million litres of biofuels per year when the relief is fully operational should stimulate the production of crops for the manufacture of liquid biofuels. This is a very welcome development.

To encourage the growing of sugar beet as an energy crop, the European Commission intends during 2006 to amend the relevant regulations to allow sugar beet to qualify for set-aside payments when cultivated as a non-food crop, and also to be made eligible for the energy crop aid of €45 per hectare. The sugar reform agreement also permits the partial dismantling of a sugar factory and the continued use of the production site for the production of non-food products such as bioethanol. In these circumstances, the final agreement provided that 75% of the restructuring aid be payable. This represented an increase on what the Commission originally proposed.

Photo of Martin FerrisMartin Ferris (Kerry North, Sinn Fein)
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Yesterday the Minister for Finance, Deputy Cowen, announced significant increases in the excise duty relief for the production of biofuels which is intended to boost the biofuel industry in the State. He also stated that this measure would require EU approval as a state aid. Does the Minister of State agree that the State should also request that the range of energy crops covered by production grants should include beet? The two areas most affected in two years' time will be Mallow and Carlow. Jobs have already been lost in Carlow and among those growing beet in the south east. Getting beet nominated as a source of biofuel would be a way to make a transition into biofuel production. I had other questions which were already asked by Deputy Naughten and answered by the Minister.

Photo of John BrowneJohn Browne (Wexford, Fianna Fail)
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As I come from the south east, I have had numerous meetings with farmers' organisations in recent weeks about possible alternatives for the beet industry, one of which relates to ethanol. Other areas in the beet industry need to be resolved first. Yesterday's announcement by the Minister for Finance of excise duty relief for biofuels of €20 million in 2006, €35 million in 2007 and €50 million in each year from 2008 to 2010, inclusive, is a welcome boost for the biofuel industry. The Minister for Agriculture and Food, the Minister for Communications, Marine and Natural Resources and I have pursued this matter with the Minister for Finance for a number of months. We will consider the possibility of exploring opportunities to use sugar beet, oilseed rape, wheat and other crops to develop biofuels. The Deputy can take it that beet will be included and will be very high on the agenda in our discussions with farmers' organisations.

Photo of Martin FerrisMartin Ferris (Kerry North, Sinn Fein)
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I welcome the response of the Minister of State that he will try to get sugar beet included. I stress its importance as it is a rotation crop grown by 3,700 farmers. Usually beet, barley and potatoes are used as rotation crops. Including it for biofuel production would assist all those involved in such rotation crops.

Photo of John BrowneJohn Browne (Wexford, Fianna Fail)
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When the sugar company and the farmers' organisations sort out the difficulties, I hope that beet will be grown in 2006 and 2007. Later we can consider the production of ethanol and other alternatives. We are also considering the area of willows. Next year we will introduce a pilot scheme to produce a certain number of hectares. That would also be an important rotation crop. We are also considering all the ideas the Deputy is proposing.