Noel Coonan (Fine Gael)

I move:

That Seanad Éireann acknowledges the tremendous contribution by the Irish sugar beet industry to the economic and social development of rural Ireland since 1926 and recognises the ongoing importance of the industry to Irish farming:

—regrets the recent announcement by Greencore plc to cease sugar production at the Carlow plant from March 2005 and calls on the company to reverse this decision and take no other such actions until the EU reforms concerning the Irish sugar quota are concluded;

—urges the Minister for Agriculture and Food to resist strongly any EU proposals which would threaten the long-term viability of sugar beet growing in Ireland.

I welcome the Minister of State at the Department of Agriculture and Food, Deputy Brendan Smith, to the House. It is the first time I have spoken in front of him and I wish him well in his new job. I also thank the spokesperson from the Labour Party who facilitated us with the time to move this motion.

We tabled this motion because of the tragic situation in which the workers of the Carlow sugar factory found themselves. We also wanted to debate the issue surrounding the proposed reforms of the sugar industry and its impact on Ireland and acknowledge the contribution sugar production has made to the economy since the 1920s. I thought this would be a unanimous motion and that there was a sense of agreement among the parties about it. However, now I find that there is an amendment to it. We will now have to be more political than we had intended to be.

The motion comes in three parts. The first part acknowledges the tremendous contribution of the sugar beet industry to the economic and social development of rural Ireland since 1926 and recognises the ongoing importance of that industry to the farming community. The second part regrets or even condemns the recent announcement by Greencore plc to cease sugar production at Carlow from next March. We call on the company and on the Minister to exercise her authority and to reverse the decision that has been made. The third part of the motion supports the Minister for Agriculture and Food and her Department, urging them to resist strongly any EU proposals which would threaten the long-term viability of the beef industry in Ireland. This is a matter of vital national importance and, as such, we urge the Minister to exhaust all procedures to ensure that the interest of the beet growers and of the farming community in Ireland is copper-fastened.

The industry is worth €80 million to farmers per annum and €140 million to the economy. There are 3,700 specialist tillage farmers involved in production and beet is the backbone of tillage farming. If the beet industry goes, tillage farming will go with it. There are 500 workers directly employed and up to 8,000 jobs are directly or indirectly involved in the industry. Towns like Carlow and Mallow were built on the foundation of a prosperous sugar industry, as were towns like Tuam and Thurles at one stage. Regrettably, they are in decline and have never recovered since the industry was closed in both of those towns. Despite a multitude of promises for Thurles, no industry has ever replaced that which was lost due to the closure of the factory there.

Everyone is aware that there is a challenge facing the sugar industry due to the EU reforms as proposed, as well as the WTO agreements. If the proposals as suggested by the EU were to be implemented, it would result in a 16% cut in quota for Ireland and a 37% cut in prices, which would be an absolute disaster for the industry and for the growers. The WTO talks are designed to placate the giant sugar cane producers like Brazil, Thailand and Australia. Since the announcements were made, growers, farm leaders, workers, unions, politicians and the Government have embarked on a significant lobbying campaign at EU and national level to ensure a fair deal for Ireland. The Greencore decision to close the sugar factory in Carlow has seriously damaged Ireland's negotiating position. The Minister for Agriculture and Food issued a statement saying that it did not damage our negotiating position. I do not go along with that but, more importantly, the Minister of State, Deputy Parlon, emphatically stated at yesterday's protest rally in Carlow that it does serious damage to Ireland's negotiating position. Perhaps the Minister of State here tonight might be able to explain where this has broken down because this is another clear example of a Government in disarray. There is no unity of purpose and no unity of policy.

The closure, as proposed, is premature. The chief executive, Dr. Brady, has admitted that the reforms coming from the EU are at least 18 months away. This means these reforms would not take effect before the end of 2006. I believe that the decision was taken solely in the interests of the company and certainly not in the interest of the country, the growers or the workers in Carlow sugar factory. Is this the new version of socialism as outlined recently by the Taoiseach? Is this the impact it will have on the people? There was absolutely no consultation involved. I am not aware of any consultation between the company and the growers, the farm leaders, the workers or the unions. Was there consultation with the Department and the Minister and, if so, when did this consultation take place? When was the Minister of State informed of the decision? What has he done since? Will he outline his programme of action and tell Members the reason for this closure? Nobody seems to know the reason.

It is time for action. We have lost valuable ground and we need to take immediate action to ensure that this decision is reversed. I understand the Minister has contacted the Office of the Attorney General for advice on the ownership of the quota rights. What was the response of the Attorney General? More important, what is the Government's opinion on who owns the quota rights established with the various factories or with the sugar company?

What is the situation with what is known as the golden share? Is it the Minister's intention to use that golden share, which gives her the authority to defer any decision taken by the company? We also wish to know more about the timing of this closure. Did the Minister know about the closure or did the company capitalise on the fact that the Minister, the Taoiseach and other members of the Government were part of a significant trade delegation to China? If the Minister did not know, it appears the company was trying to pull a fast one and hoped to get away with it. However, it should be made clear that the farming community and the beet growers will not allow the company to pull the wool over their eyes.

This closure is driven by greed. The company made a profit of €20 million last year, €10 million of which was from the production of sugar. This occurred at a time when 25% of the sugar consumed in this country was imported. It followed recent unsuccessful Greencore investments in the United Kingdom and the United States. The company lost €71 million in the United States on an investment with Imperial Sugar. In the United Kingdom, the company lost €51.4 million in companies such as Rathbones Bakeries and James Budgett Sugars Limited. Are these bad investment policies by the company management to be paid for by the sugar producer, the farmers and the workers in the industry? They are not; it is time for the Minister to take action on this issue.

This company is putting profits before people and wallets in pockets before jobs. That is clearly illustrated when one sees that the five executive directors of the company pay themselves €2.58 million. The managing director of Greencore, Mr. Dilger, receives €861,000. Admittedly, he has taken a big wage reduction of €100,000 from the previous year. That amounts to €2,500 per day or €17,500 per week. That is obscene at a time when he proposes to kick the workers out of the sugar factory in Carlow.

I urge the Minister of State to take immediate and urgent action. He should talk to the senior Minister, Deputy Coughlan, and ask her to discard her aura of beauty and charm.