Joe Sherlock (Cork East, Labour)
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I wish to speak on the imminent closure of the Irish Sugar plant in Mallow, County Cork. The issue is important to me not only because I represent 300 full-time and part-time workers whose jobs are to be lost but because I was an employee at the factory for 18 years. The Mallow plant has been in operation for generations, yet the closure is part of an emerging pattern in the Irish employment market whereby the Government is giving up on traditional industries that have sustained communities for many years.

Mere sentiment and nostalgia are not my motivation in calling on the Minister for Agriculture and Food to account for her role in the closure of the plant. Rather, the Government failed the employees of Irish Sugar and the people of Mallow by failing to argue the case for the Irish sugar industry at the meeting of the EU Agriculture Ministers in Brussels last December, when the future of the EU sugar regime was decided. Since that meeting and before and after the announcement of the closure of the plant there has been a conspiracy of silence on the Minister's negotiating position in Brussels. The Minister for Agriculture and Food agreed to cut the price of Irish sugar by 36% but the Finnish Government, representing a country with a similar demographic structure to Ireland, was able to retain the beet industry, guarantee a higher price and arrange a special deal with Brussels.

It appears Ireland negotiated for an enhanced compensation package without considering the viability of the industry. If the Finns could retain the industry in their country, why could the Irish not do likewise? The Minister has failed to answer this and has offered no explanation for the negotiating stance adopted at the meeting. From December the closure of the plant appeared inevitable and the outcome of the EU Agriculture Council allowed Greencore to blame the closure on the Irish Government when it made the announcement a few weeks ago. After the announcement and the platitudes and crocodile tears that followed, the emphasis has been on providing for growers, Greencore and contractors during the restructuring phase rather than on saving the jobs. Very little has been done for employees.

The Taoiseach and the Government have a duty to account for the Government's position last December that led to the demise of the industry. Some 3,700 beet growers, mainly in the Mallow area, believe the issue was badly handled by the Government. Greencore seems more obsessed with its own shareholders than concerned with the soon to be redundant workforce. I hope to receive an explanation for the sake of the workers but given the way the matter has been handled to date I expect more evasion.

Mary Coughlan (Donegal South West, Fianna Fail)
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The political agreement on reform of the EU sugar regime reached by the Council of Agriculture Ministers in November 2005 was the culmination of protracted and difficult negotiations. For some time past there was general acceptance that reform of the EU sugar regime, which had remained largely unchanged for almost 40 years, was inevitable. It became acutely urgent last year due mainly to international pressures arising from the WTO panel finding on the complaint from Brazil, Thailand and Australia on subsidised sugar exports, as well as obligations under the everything but arms, EBA, agreement. To comply with these obligations, the EU had no option but to curb production substantially.

Impact studies by the EU Commission had shown that in four member states, Italy, Greece, Portugal and Ireland, sugar production was likely to be drastically reduced or phased out as a consequence of reform. However, most member states are affected in varying degrees and already factory closures have been announced in 11 member states and more are expected.

Throughout the negotiations my primary objective was to seek to have the Commission's reform proposals modified to ensure the continuation of an efficient sugar processing sector in Ireland. I had several meetings with the Commissioner in that regard and Ireland played an active role in a group of 11 member states who had common cause in seeking to modify the proposals. The group remained steadfast in its opposition to the reform proposals from the time they were first mooted in July 2004 right up to the final Council meeting in November 2005. During the course of the negotiations I also engaged regularly with Irish stakeholders and had full support for my negotiating stance.

When it became evident at the final Council meeting that there was not sufficient political support to adapt the proposals to the extent necessary, I focused my efforts on securing the best possible compensation package for Irish stakeholders. I also succeeded in having the reform arrangements phased in in a manner that opened up the possibility of sugar processing being continued in Ireland for a further two campaigns. Unfortunately, the recent deterioration in the sugar market was the decisive factor for Greencore and on 15 March the company announced its decision to cease sugar production. I learnt of the company's decision the same day.

The success of my negotiating strategy in these difficult negotiations was reflected in the final compensation package worth over €310 million,which was higher than the most optimistic expectations. There are three elements to the package, including compensation to beet growers of up to 64% of the reduction in the minimum price for beet. This compensation will be incorporated in the existing single payment scheme and is worth approximately €123 million to Irish beet growers over the next seven years.

Compensation by way of a restructuring fund covering the economic, social and environmental costs of restructuring of the sugar industry involves factory closure and renunciation of quota. In Ireland's case this will be worth up to €145 million. The fund is subject to the submission of a detailed restructuring plan for the industry following consultations between the processor and the beet growers. The reform agreement provides that at least 10% of the restructuring fund shall be reserved for sugar beet growers and machinery contractors. That proportion may be increased by member states after consultation with interested parties provided that an economically sound balance between the elements of the restructuring plan is secured.

The reform agreement provides for the introduction of aid for diversification measures where sugar beet production completely ceases. This aid, worth almost €44 million to Irish growers, would be drawn down in the framework of a national restructuring programme to be elaborated when the Commission's implementing regulation has been adopted.

The decision taken by Greencore marks the end of an era and is obviously difficult for everyone concerned including workers, beet growers and all those who have depended on the sector in one way or another over the years. The compensation arrangements will be finalised when the Commission's implementing regulations are adopted in the coming months and I will endeavour to ensure that they are implemented in a fair and equitable manner in accordance with the regulations.