Written answers

Wednesday, 29 March 2006

Department of Agriculture and Food

Sugar Industry

11:00 pm

Photo of Dan NevilleDan Neville (Limerick West, Fine Gael)
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Question 36: To ask the Minister for Agriculture and Food the steps she is taking to protect sugar beet growers; and if she will make a statement on the matter. [12035/06]

Photo of Mary CoughlanMary Coughlan (Donegal South West, Fianna Fail)
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Greencore recently announced its decision to discontinue sugar production. This was a commercial decision by the company having regard to the current situation on the sugar market and the agreement on reform of the EU sugar regime. The agreement on reform of the EU sugar regime provides for compensation to beet growers of up to 64% of the reduction in the minimum price for beet. This compensation, which will be incorporated in the existing single payment scheme, is worth approximately €123 million to Irish beet growers over the next seven years.

The agreement also provides for compensation by way of a restructuring scheme in the event of a decision to cease sugar production. Under this scheme, a restructuring fund becomes available for the economic, social and environmental costs of restructuring of the sugar industry, including factory closure and renunciation of quota. In Ireland's case, this would be worth up to €145 million. The fund is subject to the submission of a detailed restructuring plan for the industry following consultations between the processor and the beet growers. The agreement provides that at least 10% of the restructuring fund shall be reserved for sugar beet growers and machinery contractors. That proportion may be increased by member states after consultation of interested parties provided that an economically sound balance between the elements of the restructuring plan is ensured.

The reform agreement also provides for the introduction of aid for diversification measures in the event that sugar beet production completely ceases. This aid, worth almost €44 million to Irish growers, would be drawn down in the framework of a national restructuring programme to be elaborated when the Commission's implementing regulation has been adopted.

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