Dáil debates
Wednesday, 29 March 2006
Other Questions.
Sugar Industry.
3:00 pm
Denis Naughten (Longford-Roscommon, Fine Gael)
Link to this: Individually | In context
Question 35: To ask the Minister for Agriculture and Food the steps she has taken to try to retain the sugar industry for a final season; when her attention was drawn to the decision by Greencore; and if she will make a statement on the matter. [12008/06]
Mary Coughlan (Donegal South West, Fianna Fail)
Link to this: Individually | In context
Throughout the negotiations on reform of the EU sugar regime, my primary objective was to seek to have the Commission's 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 which 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. When it became evident at the Council meeting that there was not sufficient political support to adapt the proposals to the extent necessary, I focused my efforts on securing a compensation package worth €310 million 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 market was a decisive factor for Greencore and on 15 March the company announced its decision to cease sugar production. I learned of the company's decision on the same day.
Denis Naughten (Longford-Roscommon, Fine Gael)
Link to this: Individually | In context
I thank the Minister for her response. I note she did not mention any discussions with Greencore. Did discussions take place with Greencore prior to the decision of 15 March? Was the lack of clarity on whether farmers would be eligible for the diversification fund if they did not grow beet in 2006 a factor in making farmers hesitant to indicate they would grow beet in the current season?
Will the Minister, as I asked a number of months ago, convene multi-party talks involving all the interest groups to discuss the future utilisation of the land and to address the issues surrounding the compensation deal?
I have asked the Minister on numerous occasions whether the Revenue Commissioners considered quota as an asset for taxation purposes. Have farmers who have bought and sold quota no legal rights or are all the legal rights in the hands of Greencore?
Mary Coughlan (Donegal South West, Fianna Fail)
Link to this: Individually | In context
If the Deputy wanted to know what meetings I had with Greencore he should have asked the question. That is not the question that was asked. I have had several discussions with Greencore and its representatives, as I have had with farming organisations and people in the localities affected by the reforms. I have met Deputies and Senators from all sides and contractors and as many people as have asked to meet me to discuss sugar since I was first appointed, as I will continue to do. Those discussions covered a variety of issues. I obtained clarity from the European Commission on the basis of the legal text available to me. My position was difficult from the outset because I did not support the reforms, but the regime was going to change this year, in June or July, and I had to make a decision before I had the legal text. Having received the text, I had to make a further decision. I do not think that is the way to do business and it is unfortunate it happened that way, causing concern for many people. However, clarity has now been obtained and I conveyed that to farmers the minute I was in a position to do so. It would have been wrong of me to clarify the situation in a quasi-judicial way because I had to have a legal text available to me.
The question of the future use of the land is, quite rightly, up for discussion. The joint committee of which the Deputy is a member is considering the issue.
The diversification fund is quite specific. It can be used to support farmers and it can be used to support alternatives, if viable. I have recently asked Greencore for clarity as to whether, in the context of the new regime, it would be financially viable for it to consider growing sugar beet for bioethanol purposes and I await a response. The company has previously advised me that it was not economically viable but that is not to say the initiatives announced by former Minister of State at the Department of Agriculture and Food, Deputy Browne, and furthered by the present Minister of State, Deputy Wallace, will not bear fruit. We must investigate their viability.
It would be inappropriate to bring all parties in to one meeting to discuss how the restructuring fund will be dispensed. A process, on which I have sought independent advice, is being put in place at the moment. It will be open, transparent and will produce as balanced an outcome as is possible, given the legal constraints.
As I have said in the House on a number of occasions, my legal advice is to the effect that the quota provides a methodology for measuring an asset but is not, in itself, an asset as defined. The Deputy will accordingly notice that, in the context of the sugar reforms, the term "renunciation of quota" was used. Compensation will be based on renunciation and that clarifies the position with regard to ownership of quota.
Paul Kehoe (Wexford, Fine Gael)
Link to this: Individually | In context
The blame game over who destroyed the sugar industry may be over but I blame the Government for its actions in recent months. I have recently spoken to a number of farmers in the beet industry. As the Minister knows, agriculture in Wexford was largely dependent on the beet industry. People there were left in the dark as to whether they would be allowed to grow beet. Many will be affected by the loss of the beet industry in Wexford — farmers, croppers, haulage firms, machinery contractors and people who have invested thousands of euro in the industry over recent years. I spoke to a beet farmer before I came into the House this evening and he said he would erect a sign on his gate before the next general election forbidding Fianna Fáil candidates from entering his farmyard, and I cannot blame him.
Mary Coughlan (Donegal South West, Fianna Fail)
Link to this: Individually | In context
That is pathetic, Deputy. It is as pathetic as the Deputy's telephone call to me on 15 March.
Paul Kehoe (Wexford, Fine Gael)
Link to this: Individually | In context
No Fianna Fáil member will be allowed to canvass in his farmyard.
Johnny BradyPaul Kehoe (Wexford, Fine Gael)
Link to this: Individually | In context
He was a Fianna Fáil cumann member but will not vote for Fianna Fáil again because of what it did to the beet industry. Whose interests will the Minister look after in the compensation package? Will it be the farmers who have put their heart and sweat into the beet industry in recent years or will it, as in the past, be Greencore?
Can the Minister envisage beet being grown here in coming years as an alternative energy crop?
Mary Coughlan (Donegal South West, Fianna Fail)
Link to this: Individually | In context
I will answer the latter question first. The question of whether to grow sugar beet for bioethanol is a matter for farmers and people who might want to be involved in the activity on a commercial basis.
Paul Kehoe (Wexford, Fine Gael)
Link to this: Individually | In context
It is a matter for the Department of Agriculture and Food and for the Government.
Mary Coughlan (Donegal South West, Fianna Fail)
Link to this: Individually | In context
When Deputy Kehoe is on this side of the House he can spout——
Mary Coughlan (Donegal South West, Fianna Fail)
Link to this: Individually | In context
——about how he would have saved the sugar industry. He could not have done so because nobody could.
James Breen (Clare, Independent)
Link to this: Individually | In context
The Minister should not give up so soon.
Mary Coughlan (Donegal South West, Fianna Fail)
Link to this: Individually | In context
The consequences of this regime have been severe. Some 11 closures have taken place in countries where the impact statement did not anticipate this. I met people at the marts in Wexford who are involved in alternative energy and energy crops. This should be considered in the context of the diversification of the sugar industry. We should not underestimate the impact this has on the people the Deputy represents, those involved in the ancillary industries, those who work in Mallow and the company. I will not favour one side over another as I must work according to the legal text provided. When this decision is made I hope it will not end up as a catfight in the High Court or the Supreme Court. It is best we deal with this in a professional manner.
The single farm payment is being addressed at present. The diversification fund will be dealt with in the context of decisions made by farmers and the restructuring fund will be dealt with on the basis of economic and social criteria, with advice made available to me. I will do my utmost in the decision I make to reflect the loss suffered.
David Stanton (Cork East, Fine Gael)
Link to this: Individually | In context
Has research been done on the future consequences of the cessation of beet growing and sugar beet processing? What alternatives have been suggested to replace sugar beet as a crop in the long term? What part is the Department playing in developing research into energy crops or is it solely concerned with food crops? How could the Commissioner in Brussels provide a clear answer on the question of the levy yet the Minister of State could not give a clear answer?
Mary Coughlan (Donegal South West, Fianna Fail)
Link to this: Individually | In context
An impact study was carried out by the Commission, which indicated that in a number of countries this measure would have an adverse effect. Ireland was one of these countries, the others were Finland, Portugal, Italy and Spain.
Alternatives are being considered and a considerable amount of money has been made available for research into alternatives. This has been done in conjunction with the recent Department of Finance decision on taxation. The Minister of State at my Department, Deputy Mary Wallace, has special responsibility for examining alternatives in conjunction with the Department of Communications, Marine and Natural Resources. A commercial component of the decision made by the Minister for Communications, Marine and Natural Resources on Sunday will be rolled out.
Farmers will also have to make decisions on this matter. When I travelled to north Cork I met young people who had an interest in alternatives. The diversification fund, which the Commissioner has stated is specifically for alternatives, must be considered and should be used in the new technology programme. Alternative energy crops are being promoted in Deputy Kehoe's constituency and this must be examined. I agree that €45 per hectare is not adequate and in the context of the new energy policy, we put forward the view that the sum will not be sufficient for what we wish to achieve in alternative land use.
The special fund was made available because we did not have alternative rotation crops and the sum increased from €22 million. On that basis we are examining the impact the removal of sugar has had on the tillage sector. In consultation with a number of Departments we will examine and facilitate alternatives. Considering compensation, per se, may not be the best way forward and we must show leadership in encouraging people to continue growing in the tillage sector despite their disappointments.
The Commissioner indicated that one does not pay the levy in the year one renounces. I have watched every press conference the Commissioner gave and the decision was made as a result of the final text passed by the Parliament and the Council. It was only at that stage that we could determine the parameters of the levy.