Sugar beet industry braces itself for challenge
Mary Coughlan has major issues with the proposals.
A MAJOR campaign to protect the €140 million Irish sugar beet industry from devastating reform proposals by the European Commission is expected to intensify over the coming months.
The Government, Irish Sugar, part of the Greencore group, beet growers, employees, road haulage contractors and the communities in Mallow and Carlow, where the country’s two processing plants are based, are concerned about the threat to the industry.
It is generally accepted that some reform of the sugar regime is unavoidable due to a number of reasons, including developments at the World Trade Organisation (WTO) talks and international pressures.
But there has been a furious backlash in a number of member states to the Commission proposals to abolish intervention, substantially cut back export refunds, lower the sugar price and reduce overall EU sugar production.
In exchange, the Commission suggests granting a decoupled payment to sugar beet farmers.
The reform process would start in July 2005 and be accomplished by 2008.
A proposed 37% beet price cut by 2007 and a European quota reduction of 16% by 2008 have been described as unacceptable by Ireland, which has been developing common ground with other member states.
The region’s 332,000 beet growers, including 3,800 in Ireland, are also strongly opposed to what is the biggest overhaul of Europe’s €5.3 billion sugar market in four decades.
Sources in Brussels say the Commission is unlikely to bring forward formal legislative proposals for reform of the sector until May or June.
Negotiations will follow in the Council of Agriculture Ministers, with a view to reaching political agreement before the end of the year.
The proposals, as currently framed, are seen as a serious threat to the Irish sugar beet industry, worth €75 million annually to beet growers, and could result in the closure of one of the country’s two processing factories.
These plants employ 450 workers directly and another 200 during the annual three and a half month processing campaign and are an integral part of the economic bed rock in both communities.
In addition, 240 haulier are engaged in transporting 1.3 million tonnes of beet to the plants each year to manufacture 199,208 tonnes of sugar - Ireland’s quota.
The IFA estimates that up to 8,000 jobs depend directly and indirectly on sugar production in Ireland, when upstream and downstream supply and service industries and seasonal employment are included.
Even after proposed compensation, it said beet grower’s income would be almost halved.
Income will go from €19/t in 2004 to €9.70/t in 2007.
This would reduce output to farmers by €26 million, making beet growing in Ireland totally uneconomic.
Agriculture and Food Minister Mary Coughlan said she has major difficulties with the Commission’s initial reform proposals, which are unacceptable in their present form because of the serious repercussions they would have for the industry in Ireland.
“There will be a long and difficult negotiation process. My primary objective is to protect the viability of sugar beet growing and processing in this country and I will work vigorously in common with like-minded member states towards that end,” she said.
But the European Commission insists the current system is not sustainable in the long run.
If it continues with the status quo it will not be able to restructure the sugar industry and will not help either developed or underdeveloped European regions. With the reform, at least the most competitive industries will be able to continue.
Ireland East MEP Mairead McGuinness warned, however, that the proposals will have dire consequences for the EU sugar industry, including farmers but also for the less developed countries.
“Sugar production is an important activity across many member States, including Ireland.
“To allow a package of measures to proceed which would effectively wipe out sugar growing and processing in Ireland is unthinkable,” she said.
IFA Sugar Beet Section chairman Jim O’Regan said growers are facing the greatest challenge ever in the history of the sugar industry in Ireland.
