Seán Sherlock (Cork East, Labour)
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Question 8: To ask the Minister for Agriculture; Fisheries and Food if he is aware of any impediments preventing the creation of a new sugar beet industry in Ireland; if not, the volume of quota Ireland could reasonably expect to receive and if he intends to facilitate sugar production; and if he will make a statement on the matter. [45472/10]

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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As part of the reform of the EU sugar regime in 2006 a temporary restructuring scheme was introduced with the aim of the EU Commission reducing EU sugar production in order to comply with WTO and other international obligations. The scheme provided an incentive for sugar processors to renounce sugar quota and dismantle the associated sugar processing plant and it provided compensation for affected stakeholders.

Greencore plc, the sole Irish sugar processor and holder of the entire Irish quota allocation, decided to avail of the restructuring scheme. Accordingly, the company renounced the quota and dismantled the last remaining Irish sugar factory at Mallow in compliance with the conditions of the scheme. This brought the Irish sugar industry to an end. As a result of the restructuring scheme, the overall EU sugar quota was reduced by almost six million tonnes, of which the Irish quota contributed some 200,000 tonnes.

At the time of the reform negotiations, the Government made strenuous efforts to have the Commission's reform proposals modified in such a way that an efficient sugar industry could have been retained in Ireland. In the end, there was insufficient political support among our EU partners for the Irish position and our efforts had to be directed at achieving the best possible compensation package. The sugar reform package we secured assisted a restructuring aid, diversification aids and single payment and was worth approximately €353 million, of which €220million went to Irish beet growers, €6 million went to machinery contractors and €127 million went to Greencore plc. The beet growers' share was made up of diversification aid of €44 million, compensation via the single payment, which is €123 million over seven years and restructuring aid of €53 million. The restructuring and diversification aids were paid out in 2007 and 2008.

To draw down the restructuring aid, Greencore plc, had to submit a restructuring plan, incorporating a social plan and an environmental plan. The social plan provided for early retirement and redundancy packages as well as support services for the departing Mallow workers such as career counselling, financial advice, including pension advice, pre-retirement programmes for those aged over 50 years, job-seeking support and "start your own business" programmes. The social plan was implemented in the first year of restructuring. The environmental plan will finish in 2010.

There is no mechanism under the current regulations that would allow for the reinstatement of the sugar quota for the growing of sugar beet in Ireland for the sugar industry. Any proposal to review the EU sugar quota regime would be a matter for the EU Commission in the first instance and any proposal to re-establish a sugar factory in Ireland would, subject to the availability of quota, be a matter for commercial decisions by interested parties.

I can confirm that a quantity of sugar beet has always been grown in Ireland for fodder purposes and this continues. It is not affected by the EU sugar regime.

Seán Sherlock (Cork East, Labour)
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Will the Minister clarify his reply? Did I interpret him correctly when he said there is no impediment to the process but it would be subject to an EU Commission proposal? Is there a clause in the agreement that resulted in the closure of the industry, which says that no sugar beet should be produced in Ireland up to 2017? That needs to be clarified by him.

Has he regrets? Does he now feel Government policy at the time was short-sighted in that even if we were not producing sugar, we could have used the sugar beet crop to produce ethanol to fulfil our obligations under the bio-fuels scheme and we would not have to import undenatured ethanol from third countries such as Brazil because we could blend it into stocks at Whitegate and produce an indigenous crop?

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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As I have said previously, the sugar quota was renounced by Greencore plc and not by the Government. The entire quota was held by the company and not the State.

The sugar regime in its present format runs to 2015, not 2017. I say that from memory but I will double check that. The regime was not changed between 1968 and 2006 and there is no indication from the Commission that it proposes to change the regime at this time because there is no indication whatsoever of this issue being revisited.

Seán Sherlock (Cork East, Labour)
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That reply is extremely disappointing but I do not want to make political hay out of this. I accept what the Minister is saying in so far as Greencore, as the commercial entity responsible for processing sugar, stated it would renounced its quota but there is a disconnect between that and the political decision taken at Council of Ministers level, to which Fianna Fáil was a party, to accept the restructuring package as it pertained to Ireland. Will the Minister acknowledge that post-2015 we could grow sugar beet again in Ireland, if not to supply the confectionery market, to ensure we can meet our obligations under the bio-fuels scheme?

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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The rationalisation of the industry undertaken by the Commission resulted in a reduction of 6 million tonnes in production under a voluntary scheme. Greencore was the quota holder. I stated in the House clearly, as did the Tánaiste who was Minister at the time, that she was extremely active along with 13 other member states in opposing the Commission's proposals. As the process went along and decision day approached, there was constant contact with the Commission, the Agriculture Commissioner and other like minded states but opposition to the Commission's proposals dissipated. We did not have the support at the Council meeting to block the proposals and, in view of that, the Tánaiste, as Minister for Agriculture and Food at the time, rightly negotiated a compensation package in the event of the quota holder exiting the industry. That is how that came about. Greencore exited the industry, not the Government or the Department. The Tánaiste was vigorous in her continual opposition. She chaired and led the group of 14 likeminded states opposed to the Commission's proposals but, unfortunately-----

Seán Sherlock (Cork East, Labour)
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The Minister has not answered my question about the potential of the sugar beet crop in the production of ethanol.

Brendan Howlin (Wexford, Labour)
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We are over time and we must make progress. I will allow the Minister to reply briefly.

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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The quota regime is in place until 2015. There is no indication from the Commission that it proposes to revisit it then. Naturally, if the Commission decides to do so, that will be a different scenario.

Seán Sherlock (Cork East, Labour)
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The Minister is kicking to touch again.

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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I am outlining the facts.

Brendan Howlin (Wexford, Labour)
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We must move on to the next question.

Seán Sherlock (Cork East, Labour)
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This is only forum I have to have my question answered. I want the Minister to give an opinion on whether we can produce ethanol on an indigenous basis. He is kicking to touch again. That sums up this Government.

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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We have a question about ethanol production later.

Brendan Howlin (Wexford, Labour)
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The Minister has replied to this question. We will move on to Question No. 9.