Brendan Smith (Cavan-Monaghan, Fianna Fail)

I thank Senators Browne, Bradford and John Paul Phelan for raising this important issue, which they have also raised on previous occasions. I am pleased to have this opportunity to give Members of the Seanad on update on the arrangements for implementing the European Union restructuring scheme for the sugar industry.

The restructuring scheme forms part of the agreement on reform of the EU sugar regime of November 2005. The reformed sugar regime came into effect on 1 July. The restructuring scheme, which is an EU-wide scheme is governed by Council Regulation 320/2006 of 20 February 2006 and Commission Regulation (EC) No. 968/2006 of 27 June 2006. The restructuring aid, which would be worth about €145 million to Ireland, is to be drawn down in the framework of an aid application to be submitted by the processor.

The Council regulation provides that at least 10% of the aid shall be reserved for beet growers and for machinery contractors in order to compensate for losses resulting from factory closure under the restructuring scheme. That percentage may be increased by the member state after consultation of interested parties provided that an economically sound balance between the elements of the restructuring plan is ensured. In that context, in May the Department issued an open call for submissions from interested parties and more than 100 submissions were received from various groups and individuals. These submissions are subject to scrutiny by Indecon International Economic Consultants who were appointed by the Government to provide independent expert advice on matters relating to the implementation of the restructuring aid.

Those who made submissions were subsequently invited by the Department to a series of consultation meetings at the end of last month to afford them the opportunity to make any supplementary points regarding their submissions. A final decision on the percentage will be made in the near future having regard to the independent expert advice and following the recent publication of the commission regulation laying down detailed rules for the implementation of the restructuring aid.

The timescale for implementing the restructuring aid is very tight where, as in Ireland's case, restructuring takes place in the first year of the new regime. The Council regulation requires that the application for restructuring aid must be made by the processor by 31 July 2006. The application must include a detailed restructuring plan for the industry, including a social plan detailing the actions planned in particular with respect to retraining, redeployment and early retirement of the workforce concerned. A decision on the granting of the aid must then be made by the member state by 30 September 2006 at the latest. Sugar factories that had closed before 1 July 2005, such as the Carlow factory, do not come within the scope of the restructuring scheme.

We have made clear from the outset our intention to ensure that the restructuring aid is implemented in a fair and equitable manner and strictly in accordance with the relevant EU regulations.