Michael McGrath (Cork South Central, Fianna Fail)
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Question 323: To ask the Minister for Agriculture, Fisheries and Food his views on the European Court of Auditors report into the closure of the sugar factory in Mallow; his further views on the absence of sugar production here; and if he will make a statement on the matter. [46024/10]

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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The European Court of Auditors Report on the Sugar Reform package of 2006 was addressed directly to the European Commission. The purpose of this report is to consider whether the reform of the European sugar sector had achieved its main objectives.

One of the issues commented on by the Court was the Impact Assessment carried out by the Commission. This was a theoretical exercise undertaken prior to the commencement of the negotiations to assess the possible impact of the reform proposals on sugar production in Member States. It indicated that the Member States most likely to be affected adversely by the reform measures were Ireland along with Portugal, Greece and Italy.

The European Court of Auditors criticised the Commission for not using up to date information in the impact assessment in the case of a number of Member States. The Commission in its response pointed out that "the reform model did not require an analysis of the current profitability and prospects of every individual sugar producer in the EU. Therefore the Commission did not consider it necessary to collect such data on productivity and efficiency for the model chosen".

As the Commission points out repeatedly in its 17 page response to the Court, under the reform package it was up to operators to decide whether to close processing plants and avail of the compensation package or not. Obviously industry operators would have the most up to date information available to them in making that decision.

Ireland strongly opposed the Commission's reform proposals throughout these negotiations and sought to have them modified in such a way that an efficient sugar industry might have been retained in Ireland. At all stages during the actual negotiations, the most up to date available information on the sugar industry in Ireland was used and the Commission was fully aware of the fact that sugar processing here was consolidated to one factory.

Ultimately, there was insufficient political support in the EU Council of Ministers for the Irish position and our efforts had to be directed at achieving the best possible compensation package. The total compensation package negotiated was worth €353m to Ireland.

Greencore plc, the sole Irish sugar processor and holder of the Irish sugar quota, decided to avail of this scheme and accordingly the company renounced the quota and dismantled the last remaining sugar factory at Mallow in compliance with the conditions of the scheme. The decision by Greencore plc, to cease sugar production in Ireland was a commercial decision, having regard to the sugar market situation prevailing at the time and the impending reform and restructuring of the EU sugar sector.

As a result of the sugar restructuring scheme the overall EU sugar quota was reduced by almost 6 million tonnes, of which the Irish quota contributed some 200,000 tonnes.

There is no mechanism under the present Regulations that would allow for the reinstatement of the sugar quota for the growing of sugar beet in Ireland for processing into sugar. Any proposal to review the EU sugar quota regime would be a matter for the EU Commission in the first instance and any proposal to re-establish a sugar factory in Ireland would, subject to the availability of quota, be a matter for commercial decisions by interested parties. A quantity of sugar beet has always been grown in Ireland for fodder purposes and this continues. It is not affected by the EU sugar regime.