Paul McGrath (Westmeath, Fine Gael)
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Question 45: To ask the Minister for Agriculture and Food her plans for the future utilisation of lands previously used to grow sugar beet; and if she will make a statement on the matter. [23613/06]

Mary Coughlan (Donegal South West, Fianna Fail)
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Following the introduction of the Single Payment Scheme last year, farmers now have the freedom to choose whatever farming enterprise is most appropriate to their circumstances. Under the agreement on reform of the EU sugar regime, the Single Payment Scheme is being extended to cover sugar beet compensation.

The sugar 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 €44m, would be drawn down in the framework of a national restructuring programme. Under the draft Commission implementing regulation, which has still to be published, Ireland will be required to provide a restructuring plan to the Commission by the end of this year.

Farmers are showing increasing interest in the potential of energy crop cultivation for biofuel purposes, as was evident from last week's 'Agriculture and Food 06' event organized by Teagasc. Support to farmers for growing such crops is provided under the Energy Crops Scheme. The current aid level of €45 per hectare available under the Scheme has not proven to be sufficiently attractive in itself to stimulate the growing of such crops. I raised this matter at the Council of Agriculture Ministers meeting last February and I am pleased to say that the EU Commission has undertaken to review the operation of the scheme this year.

The production and utilisation of agricultural products for energy purposes can only be sustained in the longer term if biofuels generate a more favourable return than traditional market outlets. I am confident that the extension in the last Budget of excise relief of €205m which, when fully operational, will support the use and production of 163 million litres of biofuels annually, will help drive additional demand for the production of energy crops. I am working directly in this matter with the Minister for Communications, Marine and Natural Resources who has overall responsibility for energy policy.