Sugar jobs could still be saved
However, as things stand, EU and Government decisions of the past few years appear to have doomed the industry in Ireland.
But action by Government and Greencore could still save the 350 jobs in sugar processing for at least another year, even at the eleventh hour, and ensure that enough beet is grown for processing - if Greencore decides processing is commercially viable.
SIPTU, representing sugar factory workers, has expressed concern that not enough farmers will grow beet. But if they look at the situation through farmers’ eyes, they will see how the writing has been on the wall for sugar beet since 2003, when farm production was decoupled from the Single Payment.
This had a major effect on tillage farming last year, when Irish growers took advantage of the new scheme to cut their cereal cropping by 60,000 acres, and in most cases end up with more money in their pockets, because of the low profitability of tillage farming. They did this through “stacking” - drawing their full Single Payment entitlements on as little as 50% of the land they farmed five years ago. Of the 16,000 tillage farmers who draw entitlements, 4,000 “stacked”, and this trend may be accelerating, judging from the reduced sales of seeds for winter cereals.
This was a big shake-up for tillage farmers, but no sooner was it agreed than Brussels started to dismantle the EU sugar regime.
And farmers were hit at the same time with the Nitrates Directive, which complicates the business still further.
For example, they can no longer gain the full benefits of long established practices, such as autumn ploughing for spring crops, and can’t rely on extra fertiliser to boost a poorly performing crop, due to the Directive.
The decision whether or not to sow beet could not have been put to them at a worse time.
According to Teagasc sources, Irish tillage farmers are not just pessimistic after the way their business has gone in recent years, they are depressed, and less likely to take a chance with a crop which they would welcome if times were better.
Indeed, the huge uncertainty for tillage farmers who cannot make plans, because Greencore Sugar may or may not cease processing this year, could push many more to give up tillage this year than last year, and could have bad consequences not just for the sugar industry, but for the grain business as well.
“Stacking”, or even leaving the land fallow, could be the easy way out, rather than wait another few weeks for Government and Greencore decisions. The other option this year is to grow grass and raise cattle, taking advantage of the EU’s high prices, while foot and mouth reduces the beef supply from Brazil.
Unfortunately, sugar beet is down the list of options, after the 36% price cut and 20% transport subsidy cut.
Even growers still committed to this crop are fast running out of time to rent land for beet.
Four out of every 10 acres of sugar beet is normally grown on rented land, but why rush around in late March trying to secure a conacre land bargain (the Teagasc advice is that beet growers cannot afford to pay a high rent after the beet price cut)? Saying No to conacre beet is an easy and correct decision for beet growers in the midlands, and the slump in conacre prices this spring indicates that many famers are saying No.
Throw in the chance of low yields and high contractor costs, and a beet crop could be a big loser financially for them.
On the other hand, non-renting beet growers will have to continue planting an equal acreage of tillage crops to that on which their sugar beet Single Payment entitlements is based, in order to qualify for this cheque from Brussels - just one more complication for the already bamboozled tillage farmer.
Throw in the restructuring levy of €126.40 per ton of sugar which Greencore Sugar must pay the EU this year, and the 11.55% cut in sugar quotas agreed in Brussels last week, and the odds lengthen against Irish sugar processing in 2006.
The questionnaire sent by Greencore Sugar to growers won’t shed any new light on the conundrum, because it was worded in such a way that IFA advised all growers to protect their beet quota rights by responding with a Yes, whether it is their final decision or not to grow beet in 2006.
But against all the odds, there is a way to make sugar processing in 2006 possible, and secure 350 jobs for at least one more year. That requires Greencore Sugar, perhaps with the help of the Government, to draw up a fast procedure for growers who want out to transfer their beet quotas to farmers who see beet as still the most profitable tillage crop on owned land, if yields are high, and are willing to take a chance with it.
Unfortunately, much time has been lost, and every day counts if the industry is to be secured, jobs saved, and a return earned on the €25m investment to upgrade the Mallow Sugar Factory.
