Seanad debates

Wednesday, 5 July 2006

9:00 pm

Fergal Browne (Fine Gael)
Link to this: Individually | In context

I wish to share my time with Senators Bradford and John Paul Phelan. It would be useful, before the House rises for the summer recess, to raise the issue of the sugar beet industry again. My colleagues, Senators John Phelan and Bradford have raised the matter recently. It is important at this stage to find out exactly how many submissions have been received by the Department of Agriculture and Food on the EU sugar restructuring process and what criteria the Department will be using in allocating compensation to the various parties, namely, Greencore, beet growers, contractors and machinery operators, whose business has been wiped out overnight.

We wish the Minister to know that Members on this side of the House take the issue very seriously. The Government has a disastrous record in this area. We have seen an industry wiped out. While I appreciate that the world price for sugar as against what one would need to charge to make a profit necessitated a major change, it is a pity the Government has not been proactive in finding replacement industry or alternative fuel with the sugar beet and the plants. It seems to be quite happy just to wind the operation up. A test for the Government will be the restructuring plan and the compensation allocation. There is a demand by growers that they would get the lion's share of the compensation and most people would be very unhappy to see Greencore doing well out of the compensation package. The company has done well enough already.

Photo of Paul BradfordPaul Bradford (Fine Gael)
Link to this: Individually | In context

I thank my colleague, Senator Browne, for giving me the opportunity to speak on this issue before the Minister for Agriculture and Food makes a decision on the compensation package, in particular on the package of €144 million. We have debated this issue ad nauseam in the House and elsewhere in recent months. The crucial decision will have to be made by the Minister in the next few days, or weeks at most, as to how she allocates this fund of over €140 million. It is crucial that she reflects very seriously and deeply on the submission by the former growers and contractors, particularly those contractors who had specialised machinery.

The position as outlined by the authorities in Brussels is that a minimum of 10% must go to the farmers and contractors but I urge the Minister to give the maximum amount possible to the former growers and contractors, whose livelihoods have been wiped out by the stroke of a Brussels pen, which the Government was unable to prevent.

I read with some interest in one of the Sunday newspapers last weekend of how the chief executive of Greencore proclaimed defiantly that he was expecting the company would get the bulk of the compensation. I sincerely hope that will not prove to be the case. It is imperative that the farming community, the former growers and contractors receive the bulk of the assistance.

I am sure the Minister of State is aware of the dispute concerning the redundancy package for Greencore workers and I hope the Minister for Agriculture and Food can also ensure that some of the compensation fund is directed to the former workers, who are currently being treated scandalously by Greencore, which is failing to honour the recommendations of the Labour Court.

Photo of John Paul PhelanJohn Paul Phelan (Fine Gael)
Link to this: Individually | In context

I also thank Senator Browne for giving me the opportunity to speak on this matter. I wish to leave the Minister of State in no doubt as to the depth of feeling in the country as to where the €143 million worth of funding should be allocated. I am firmly of the view that Greencore should not get one cent of that money. Following the privatisation of Irish Sugar, that company now finds itself in the position of owning several very valuable sites in various parts of the country, which is more than adequate compensation. Furthermore, it has played a pretty poor role in the downfall of the sugar beet industry and I would hate to think that it would receive any compensation from this fund.

I agree with Senator Bradford that the producers and contractors should get all, or at least the vast bulk of, the €143 million restructuring fund. It is clear that the contractors and some farmers have invested thousands of euro in machinery that will now lie idle because there is no longer a use for it. For farmers, who are employed or involved in producing the product, they are now faced with the headache of trying to find an alternative product to produce.

In the next ten days or so the Department will make a decision, which will be a political one. The Minister for Agriculture and Food will have the final say as to where this funding will go, and she seemed to give positive soundings lately. Senator Browne posed a number of interesting questions concerning what criteria will be used. That is a crucial issue.

Another important issue is the number of submissions received. I wholeheartedly support the submission by the producers and the contractors. They, through no fault of their own, have suffered a great loss and they, not Greencore, should benefit from the restructuring fund.

Photo of Brendan SmithBrendan Smith (Minister of State, Department of Agriculture and Food; Cavan-Monaghan, Fianna Fail)
Link to this: Individually | In context

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.

Fergal Browne (Fine Gael)
Link to this: Individually | In context

I wish to ask a question arising from the Minister of State's reply. He may not be able to answer this question now, in which case he can report back to me on it. The Minister of State said that "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 asked on numerous occasions whether we would be entitled to more compensation if it had not closed. Was Greencore premature in closing the Carlow factory? The Minister of State's reply seems to indicate it was. The Minister of State might report back to me on that. A motion was debated in this House last January 12 months calling for a decision not to close the Carlow factory and to wait until the EU reform talks were concluded when we would be better informed. However, the Minister of State's reply appears to indicate that Greencore, by closing the Carlow factory first, has caused us to be in line for less compensation, which will affect everybody. The Minister of State may reply to that question now if he knows the answer to it and, if not, I will await a reply from him.

Photo of Brendan SmithBrendan Smith (Minister of State, Department of Agriculture and Food; Cavan-Monaghan, Fianna Fail)
Link to this: Individually | In context

To be absolutely accurate I will revert to the Senator tomorrow.