Fergal Browne (Fine Gael)

I thank Senator John Paul Phelan for raising this matter and am pleased to have the opportunity to clarify several issues.

The Minister for Agriculture and Food holds a special share in Greencore PLC. That share has the same monetary value as any other share in the company but has conditions attached which prevent the company from engaging in a number of activities without the prior written consent of the Minister. In summary, the purpose of the special share is to prevent the disposal of the controlling interest in Irish Sugar Limited, or a certain percentage of the sugar assets, and to prevent a single shareholder or group of shareholders from gaining control of Greencore PLC.

Under the EU sugar regime, each member state has a quota for manufactured sugar. There is no quota for sugar beet. The EU regulations stipulate that the quota must be made available to the sugar manufacturing enterprises in the member state. Accordingly, in Ireland the entire sugar quota is processed by Irish Sugar Limited, which is the only sugar manufacturer in this country. Irish Sugar Limited places annual contracts with farmers to grow a specific tonnage of sugar beet sufficient to manufacture the sugar quota.

Ownership of the sugar quota had never been an issue in the past because the relevant EU regulations do not provide for the buying and selling of quota. Speculation about quota ownership only arose when the Commission, in July 2004, raised the possibility of cross-border quota mobility, in the context of its initial thinking on reform of the EU sugar regime. Several member states, including Ireland, voiced strong opposition to the idea of cross-border mobility and I am pleased to say that it does not form part of the Commission's legislative reform proposals, which were published in June. In any event, the European Commission has confirmed, in the context of the proposals for reform of the EU sugar regime, that the quota is not an asset owned by the member state or any other party but is simply a mechanism for regulating the market.

The Commission's proposals for sugar reform were discussed at the Council of Ministers meeting last month. Ireland is among 11 member states that have major difficulties with the proposals and, in this context, we submitted a joint ministerial letter to the Commission in advance of the formal discussion at last month's Council meeting, setting out our objections to the proposals. Negotiations will become more intensive over the coming weeks and the proposals will be considered by the Council again later this month. Given their severity, it is clear that the negotiations will continue to be difficult but the Minister will resolutely pursue our overall objective of achieving a more balanced agreement which will take Irish interests into account.