Dáil debates
Thursday, 16 February 2006
Priority Questions.
Sugar Industry.
3:00 pm
Denis Naughten (Longford-Roscommon, Fine Gael)
Link to this: Individually | In context
Question 1: To ask the Minister for Agriculture and Food the legal entitlements to the €145 million sugar restructuring fund; the procedure for the relinquishing of sugar quota; and if she will make a statement on the matter. [6242/06]
Mary Coughlan (Donegal South West, Fianna Fail)
Link to this: Individually | In context
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 sugar quota.
Since the necessary EU legislation has not yet been adopted, it is not possible to make a definitive statement about entitlements under the fund or the procedures for renouncing quota. The political agreement on reform of the EU sugar regime 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 with interested parties provided an economically sound balance between the elements of the restructuring plan is ensured.
The final legal texts giving effect to the reform agreement could not be considered and approved by the Council of Ministers until the opinion of the European Parliament had been received. That opinion was delivered on 19 January and it is anticipated that the legal texts will be ready for approval by the Council of Agriculture Ministers next week. Meanwhile, the European Commission is working on the preparation of detailed implementation rules which can only be finalised once the Council texts have been adopted. This 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.
Denis Naughten (Longford-Roscommon, Fine Gael)
Link to this: Individually | In context
I congratulate the new Minister of State, Deputy Mary Wallace, and wish her the best of luck in her new position. I look forward to working with her. I now have two women to handle so it will be twice as difficult.
Mary Coughlan (Donegal South West, Fianna Fail)
Link to this: Individually | In context
The Deputy has three.
Denis Naughten (Longford-Roscommon, Fine Gael)
Link to this: Individually | In context
Deputy Upton will be on my side in that case. The spokesperson for the Minister was quoted in The Irish Times last week as saying that specific percentages were left out of the €145 million for each of the stakeholders, including workers and Greencore. Can the Minister clarify that?
Greencore is quoted last week as stating it has a clear legal entitlement to compensation under the €145 million fund. Can she clarify that?
Who owns the quota? The Minister has told the House in the past that it is a production system that nobody owns. Why then is the EU buying back quota from member states? In that context what rights and entitlements have farmers who purchased quota in the past number of years?
Mary Coughlan (Donegal South West, Fianna Fail)
Link to this: Individually | In context
What is attributable to a spokesperson is not necessarily what is printed. Under the package put forward there will be a single farm payment, which will be made available to the farmers. There will be a special fund of €44 million for farmers for diversification. At least 10% of the €145 million will be available to the contractors and farmers. There is nothing specific about workers.
Greencore has a legal entitlement. The determination of that entitlement cannot be decided until the legal text has been passed and other methodologies put in place.
The Deputy himself answered the question on who owns the quota, because it is a system. The European Union is quenching quota, not buying it back, and those sugar companies which wish to remain in production will pay a levy to do so.
A proposal has been put to me by the IFA concerning losses attributable to the changes that have taken place. It has set its stall out on what it considers the losses to be and the purchase of quota will be taken into consideration in determining that figure.
Denis Naughten (Longford-Roscommon, Fine Gael)
Link to this: Individually | In context
Is the Minister saying farmers who bought quota will be considered a special category?
Denis Naughten (Longford-Roscommon, Fine Gael)
Link to this: Individually | In context
The Commissioner is quoted on a number of occasions as saying the Commission will buy back quota. Can the Minister clarify that? If it is buying back quota the question of ownership arises.
Has she clarified Greencore's entitlement to compensation? Will the levy the Minister mentioned have to be paid in the current year, should sugar production continue in 2006?
Mary Coughlan (Donegal South West, Fianna Fail)
Link to this: Individually | In context
I did not say farmers who purchased quota were a special case. I said farmers put forward a case for €106 million and have employed a specialist to do that on their behalf. The proposal will be evaluated in due course. Equally, Greencore has put together an evaluation of its view of its entitlements, which will also be determined in due course.
Denis Naughten (Longford-Roscommon, Fine Gael)
Link to this: Individually | In context
How much is Greencore looking for?
Denis Naughten (Longford-Roscommon, Fine Gael)
Link to this: Individually | In context
It is more than €106 million?
Mary Coughlan (Donegal South West, Fianna Fail)
Link to this: Individually | In context
The entitlement will be determined in a fair, balanced and transparent way under certain procedures and with permission from the Commission. The Commission is not buying back quota but asking sugar manufacturers to renounce quota, so taking the quota out of the system altogether.
There is over-production of sugar and there are pricing problems and, as the Deputy knows, a WTO panel decision went against the European Union. Those are the reasons why we had to reform the sugar industry in the first place.
I travelled to Brussels last Thursday morning to meet with the Commissioner to seek clarification on a number of issues. It is, after all, a package worth €310 million. I received clarification on a number of issues. The requirement to deliver beet in the year preceding the year of quota renunciation has been removed, which was very important. I worked with farmers to determine the reference years for entitlement to single farm payments and I believe we have made the right decision. I also received clarification that sugar produced in the first year of the reform will be liable for 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.
There are often misquotes so I will clarify further. The levy, €25 million this year, depends on whether sugar is produced this year, which will determine whether we grow sugar.