Revival of sugar industry wins cross-party support

The joint Oireachtas Committee on Agriculture, Food and the Marine expressed cross-party support yesterday for a revival of the sugar industry, but suggested that the two main sugar groups should adopt a joint approach.

Addressing the committee, Beet Ireland and the Irish Sugar Bio Refinery Group made compelling economic and food security-based cases for the revival of the industry. Both sugar groups have partnered with industry and third-level experts to assess the proposed revived sugar industry’s needs in terms of acreage and finance, and its potential economic benefits.

A revived sugar sector would employ 2,000 growers and 250 full-time factory workers, and create another 500 jobs in constructing a new sugar and bioethanol refinery. Total jobs could reach 5,000.

The revival would also replace current sugar imports of up to €200m, support Irish security of food and fuel supply, enhance Ireland’s carbon footprint and reduce animal feed import costs. Both models take 2015 as a starting point, when the EU ends its sugar quota restrictions. Several speakers, however, said that the EU may yet decide to retain its sugar quota regime until 2020.

In terms of profit sharing, the example was given of the recent six-month profits of €172m announced by British Sugar, of which just €25m went to growers and €25m to processors, with the company executives taking the greater share.

Tipperary-based Fine Gael TD Noel Coonan questioned the logic of the Irish Sugar Bio Refinery Group’s decision to choose the south-east as the location for its proposed refinery. The group cited the British model, which achieved efficiencies via savings on transport costs, noting that its beet would come primarily from the south-east.

Cork-based Fianna Fáil TD Michael Moynihan welcomed Mr Comerford of the Irish Sugar Bio Refinery Group’s suggestion that both sugar groups can collaborate on developing the industry.

Sinn Féin’s Michael Culreavy questioned the depth of the Sugar Bio Refinery group’s commitment to growers. He said that Beet Ireland’s co-op style model, with growers taking board seats and greater profits, was better suited to Ireland.

Mr Culreavy also said he was confident either and/or both sugar groups would receive full cross-party support in seeking a derogation from the EU to re-enter the sector, should, as is widely expected, the EU decide to retain quotas until 2020.

However, Fine Gael’s Noel Coonan asked: “Is it true the Sugar Bio Refinery group is a front for British Sugar? Could you clarify or deny that? The closure of the beet industry has left a sour taste in the past here. Can your company guarantee you won’t be shutting the industry down again after a few years? And what role precisely do you envisage for the grower in your company?”

In reply, Chris Comerford said: “We are not a front for British Sugar or a front for anybody else. We are committed to the growers, and want them to have equity, but we don’t see them putting up the total money required for the project. We are confident what happened with the industry here in the past will not happen this time.

“We are quite willing to work with the other group, and it is up to Michael Hoey to cooperate and share information with us, because one thing is sure — there will not be room for two factories in Ireland.”

Cork-based Fine Gael TD, Tom Barry, welcomed the fact that both groups were discussing a shared approach. He said even though people thought sugar was dead in the water six or seven years ago, he believed it could still be an industry that would help pull the country out of the economic mire.

Beet Ireland’s Michael Hoey said: “We have been talking with our EU counterparts. There are a lot of countries out there who want the right to be allowed to produce sugar. We know that there are strong powers out there who want the EU quota system continued beyond 2015.

“We just want a small derogation that would allow Ireland back into the sugar industry. The EU is about 75% self-sufficient in sugar now. We are only looking for a small piece of the cake.”

The Oireachtas joint-committee chairman Andrew Doyle said the committee would work to gain a derogation from the EU to re-boot the sugar industry in Ireland. He also noted, however, that both groups’ efforts to gain financial support would be dependent on the business models being proposed, and the growers’ share in profits.

Mr Doyle adjourned the meeting until next Tuesday, July 17.

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