John Paul Phelan (Fine Gael)

I welcome the Minister of State, Deputy Browne, to the House. Coming from Wexford, he is familiar with the problems that have developed over the last number of years in the sugar beet sector. Many producers in his neck of the woods in Wexford and in my area of Kilkenny and Carlow, have been affected by these problems, not least by the closure of the sugar factory in Carlow.

There are a number of important issues that must be resolved as soon as possible. The Government retained its golden share in Greencore after its privatisation in early 1990. My understanding, and that of most farmers at the time, was that the share was kept as an insurance policy, to influence the future direction of the company and to ensure that sugar beet production remained a profitable and important part of the agricultural sector. However, it became clear, following the announcement of the closure of the factory in Carlow, that the golden share had no real effect in terms of influencing the decision made by Greencore. Why was it necessary to keep the golden share if it did not have any bearing on the outcome or, if it did have some bearing, why did the Minister for Agriculture and Food not use her position to ensure that the plant in Carlow remained open? It is clear that it was a profitable business which had an important economic impact on Carlow, its immediate surroundings in the south east and, indeed, further afield. In fact, it was also important for beet producers throughout the northern part of the country.

The ownership of the quota is an issue which has still not been resolved. It is an issue that must be resolved urgently and as favourably as possible, vis-À-vis the producers. It is apparent to me and to all sugar beet producers that the ownership of the quota rests with them. However, there is a question over whether the Government, Greencore or the producers own the quota. Approximately four years ago, a scheme was introduced whereby people purchased quota from those who wished to get out of sugar beet production. At that time, a number of people sold quota, received payment and paid tax on the earnings from the disposal of their quota. Following from that, it seems clear that the quota is an asset that belonged to those producers. It is important that it is sorted out, for once and for all, and that the ownership of the quota resides with the producers and not with the company.

Another area of concern is the World Trade Organisation talks, which will resume shortly. It was reported in the media yesterday that, rather than seeking a 39% price cut from producers, the European Commission will set a new target of a 50% price reduction, as part of the WTO negotiations. Whatever about production continuing with a 39% drop in price, it is obvious that if prices drop by 50% the sugar beet sector in this country will disappear completely.

The major problem I have with the decision to close the Carlow plant is that it was taken prematurely. It was taken before the sugar beet proposals had been finalised. In effect, Greencore held up the white flag before those talks were concluded. In doing so, it has put the sector and the producers on the back foot. The Minister of State will be familiar with the situation that has arisen from the plant closure. Producers are being forced to transport sugar beet themselves from the point of production to Mallow, which is a considerable distance from where I come in south Kilkenny. I spoke to a contractor yesterday who told me that he and his son drove from the village of The Rower in south Kilkenny to Mallow, on tractors, with a load of sugar beet each and returned that night. That is an uneconomic prospect for producers in that part of the country. It is an extremely long round trip to undertake.

The Government must be under no illusion about the significance of this sector and the urgent need to answer the vital questions still hanging over the heads of the producers.