Paul Connaughton Snr (Galway East, Fine Gael)
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Question 72: To ask the Minister for Agriculture and Food her plans for the future utilisation of land previously used to grow sugar beet; and if she will make a statement on the matter. [40481/06]

Bernard Durkan (Kildare North, Fine Gael)
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Question 226: To ask the Minister for Agriculture and Food the proposals she has to incentivise the production of bio-fuels with particular reference for the need to replace the beet growing sector; and if she will make a statement on the matter. [40853/06]

Mary Coughlan (Donegal South West, Fianna Fail)
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I propose to take Questions Nos. 72 and 226 together.

Under CAP reform, farmers now have the freedom to focus more clearly on exploiting new farming opportunities, including agricultural production for non-food use, while retaining their single payment. This gives farmers an incentive to exploit new opportunities in growing energy crops as a feedstock for biofuel and biomass production. The development of this sector is an opportunity for farmers to diversify and seek new investment opportunities beyond traditional farming outlets.

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 €44 million 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.

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 the recent announcement that sixteen biofuel projects have been granted excise relief worth some €200 million will stimulate demand for the production of energy crops. When fully operational, the scheme will support the use and production of 163 million litres of biofuels annually and provide a stable market in which farmers can supply.

At present, the EU Energy Crops Scheme provides farmers with a premium of €45 per hectare for growing energy crops to produce biofuels and biomass. I recognise that the take up of the scheme in Ireland has been low to date. At the February Council of Ministers meeting, I called for a review of the premium 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 has made a proposal, which would allow member states pay national aid up to 50% of the costs associated with establishing permanent crops. The Proposal is currently being discussed in Brussels.

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. A key part of this Action Plan will be the consideration of further initiatives to incentivise the development of Ireland's biofuel market.