Tom Hayes (Tipperary South, Fine Gael)
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Question 135: 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. [32750/06]

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 in Ireland's case, must be drawn down in the framework of a national restructuring programme to be prepared and submitted to the Commission by the end of this year. Under the EU Regulations, payments of the diversification aid would begin in September 2007.

Farmers are showing increasing interest in the potential of energy crop cultivation for biofuel purposes, as was evident at the recent Ploughing Championships. Support to farmers for growing such crops is provided under the Energy Crops Scheme. Under this scheme, aid of €45 is available for energy crops for use in the production of biofuels and electric and thermal energy produced from biomass. At the February Council of Ministers meeting, I called for a review of the premium as it was not proving effective in Ireland and I subsequently raised the matter with the Agriculture Commissioner. The EU Commission has just published a Report on the implementation of the scheme and my Department is currently studying the Report.

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 closely with Ministerial colleagues, as part of the Ministerial Taskforce on Bioenergy to prepare an Action Plan to develop Ireland's bioenergy resources to 2020.