Ciarán Cuffe (Dún Laoghaire, Green Party)

I am pleased to have the opportunity to address the House on this matter. I followed the debate in the other House last week and on the Irish Economy website and the words of Professor Alan Matthews on this subject which make for quite interesting reading.

The situation complex, and not as simple as it sounds. It is tied into the future of Irish farming and the Common Agricultural Policy where we must think again about many of the traditional crops and sources of employment in agriculture and look at the other options and at issues such as energy crops, how the agri-environment scheme works and at how reform of the Common Agricultural Policy will work. We must look at all the options and evaluate them quite carefully. I mention the work my colleague, the Minister of State, Deputy Mary White, did in putting forward a proposal to make ethanol in Carlow.

As part of the reform of the EU sugar regime in 2006, a temporary restructuring scheme was introduced with the aim of 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 6 million tonnes, of which the Irish quota contributed 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 for the Irish position and our efforts had to be directed at achieving the best possible compensation package.

The sugar reform package we secured was as a whole - that is, restructuring aid, diversification aids and single payment - worth approximately €226 million to Irish beet growers and machinery contractors. The restructuring aid and diversification aids were paid to stakeholders concerned in 2007 and 2008.

Following the restructuring of the EU sugar industry, sugar production is now concentrated in 18 member states - as opposed to 23 before the reform - which enjoy favourable agronomic conditions and more than 75% of production is accounted for by seven of these member states, namely, France, Germany, Poland, UK, Netherlands, Belgium and Italy.

Any proposal to review the EU sugar quota 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 decision by interested parties. Currently, there is no mechanism under the regulations that would allow for the application of a re-instatement of the sugar quota. I trust this explains the position for the Senator.