Doom report on future of Irish sugar industry ‘has significant shortcomings’

THE analysis in a report by the European Commission that a proposed 39% cut in prices might wipe out the sugar industry in Ireland suffers from a few significant shortcomings, it was claimed yesterday.

Goodbody Stockbrokers analyst Liam Igoe said the report, which suggests the sugar industry in Ireland may no longer be profitable if proposed price cuts go ahead, is based on incomplete beet productivity figures.

“Firstly its stats are apparently based on total sugar beet production in Ireland, whereas some is in fact used as animal feed,” said Mr Igoe.

“While we would not overstate this point, it would shift the productivity of beet growing in Ireland from near the bottom of the league closer to the middle.” Mr Igoe also said the report does not allow for any potential productivity gains by growers in the future.

Finally he said, the analysis of the factory productivity is historic and does not allow for the rationalisation of Irish Sugar.

“Nevertheless,” said Mr Igoe, “the report does serve as a reminder of the threats facing the Irish sugar industry in the face of these reforms.

While we estimate that sugar beet will remain relatively more profitable, the call is far more marginal than was previously the case and, secondly, the compensation package for withdrawal from the industry is proving to be controversial among beet growers,” he said.

Meanwhile, the IFA held an emergency national council meeting in Dublin yesterday to consider the threat to the industry, and Sugar Beet chairman Jim O’Regan said the industry in this country would be unviable if the leaked proposals go through.

“Such price cuts of over 40% would be intolerable and would devastate beet growing in Ireland. Income would be down 67% by 2007, leaving beet growers with earnings below production costs,” said Mr O’Regan.

He said Agriculture Minister Mary Coughlan must insist on a viable future for beet growing in Ireland, which is the cornerstone of the Irish tillage sector, and that means rolling back these unsustainable price cuts.

He stressed that any EU restructuring scheme must be voluntary and “provide full compensation directly to Irish beet growers who give up their livelihood in beet, including growers affected by the Carlow factory closure earlier his year”.