Denis Naughten (Roscommon-South Leitrim, Fine Gael)
Link to this: Individually | In context

Question 163: To ask the Minister for Agriculture, Fisheries and Food the status of the compensation package for sugar beet growers; when interim payments under all categories of compensation will be granted; when such payments will be completed; the steps she is taking to develop an alternative crop for growers; and if she will make a statement on the matter. [19545/07]

Mary Coughlan (Donegal South West, Fianna Fail)
Link to this: Individually | In context

The compensation package negotiated in the context of the reform of the EU sugar regime comprises three elements worth in excess of €310m to Ireland.

The first element is the sugar beet compensation that has already been incorporated into the Single Payment Scheme since last year. It is worth approximately €123 million to Irish beet growers over seven years. The second element is the EU restructuring aid for the sugar industry, which arises following the renunciation of the sugar quota and the closure of the Mallow sugar factory. In Ireland's case, the restructuring aid is worth €145m approx. The EU Regulations provide for payment of the first instalment of aid (40%) in June 2007 and the balance in February 2008. Pending the conclusion of the legal proceedings over the Government decision of July 2006 on the allocation of the restructuring aid, arrangements were made to allow payment of the June instalment to commence last week. This includes payment of €14.5m to the growers and machinery contractors, representing an undisputed 10% of the total amount.

The third element of the compensation package is the diversification aid, worth almost €44m in Ireland's case. A national restructuring programme was submitted to the EU Commission, in accordance with the EU Regulations, with a view to drawing down the diversification aid. The Regulations provide that payment of this aid would commence in September 2007.

Following the reform of the Common Agriculture Policy in 2003, farmers now have the freedom to focus on new market opportunities including the area of purpose grown energy crops for use as a renewable source of energy in the heat, electricity and liquid biofuels markets. The market for energy crops is developing in response to the need to develop alternative renewable sources of energy. I am making €14 million available over the next three years to encourage farmers to grow energy crops. €6 million is being provided for a new national payment of €80 per hectare, which will be paid as a top-up to the €45 EU premium available under the EU Energy Crops Scheme. A further €8 million is being made available for a new Bioenergy Scheme to encourage farmers to grow miscanthus and willow for use in the production of heat and electricity. The Scheme provides farmers with establishment grants of up to 50% of the costs of establishment, subject to a maximum grant of €1,450 per hectare. I am confident that these measures will encourage farmers to consider energy crops as an alternative land use option.