Sugar future not looking so sweet in EC plans
THE survival of beet growing and sugar processing in Ireland will be at stake when agriculture ministers from the twenty-five European Union member states begin three days of negotiations in Brussels tomorrow.
On the table for decision will be radical proposals by the European Commission to reform the sugar regime across Europe, but a blocking minority of 11 countries including Ireland has emerged to oppose the package.
Key elements of the reforms are a 39% price cut in the institutional price for sugar, a corresponding reduction in the minimum price for sugar beet and 60% compensation to farmers for the price cut. A voluntary restructuring scheme is proposed to encourage factory closures and the renunciation of quota.
It is widely accepted that the proposals as presently framed would devastate the 80-year-old Irish sugar processing industry, currently worth €140 million in total to the economy and €80m a year to beet growers.
The industry has 3,700 beet growers countrywide, 140 permanent and 80 seasonal employees at Greencore Mallow and more than 60 people employed in sales and administration in other locations, as well as hauliers and service providers.
Agriculture and Food Minister Mary Coughlan, who will head the Irish negotiating team in Brussels, has firmly rejected the proposals as unacceptable but admits the negotiations will be very difficult.
She told the Dáil the price cuts proposed are too severe, that the reforms should be based on a longer lead-in time and that it would be preferable to await the outcome of the WTO ministerial conference in Hong Kong in December before seeking to conclude an agreement on sugar.
Ireland is in a unique position in that it has only one processing factory. It has a special case on the right to produce sugar.
“However, if the proposals to reduce the price of sugar by 39% and sugar beet by 42% go ahead, I have been advised by farmers that they could not possibly produce sugar beet at those prices.”
IFA Beet Section chairman Jim O’Regan warned that the EU price-cutting approach will wipe out the livelihoods of Ireland’s beet growers. It will result in a 67% plus income loss to farmers.
“Irish beet growers cannot survive if the Commission’s proposals are adopted. The EU proposal to cut the beet price to €25/t would make beet growing in Ireland totally uneconomic, even on our most efficient farms,” he said.
Other farmers, particularly in the midlands, are convinced beet growing in Ireland is finished. They are sharply critical of IFA policy to seek a viable beet price and if that is not forthcoming to then go for full compensation. They argued at some recent stormy meetings of growers that the compensation route is the only logical option.
Greencore Sugar has meanwhile warned that it cannot and will not operate without an appropriate level of profitability and neither does it expect its suppliers to do so.
Dr Sean Brady, managing director, said it is vitally important to Ireland’s national interest that significant improvements are achieved in the terms of the current reform proposals.
“These improvements must protect our national industry and the viability of beet growing and sugar manufacturing in this country,” he said.
Carlow Sugar Factory was closed in March this year and the country’s last remaining beet processing plant in Mallow was upgraded to improve the operating efficiency of sugar production in Ireland.
Dr Brady said this has given Greencore Sugar the opportunity to be competitive with other European producers selling in the Irish market.
This concentration of production was essential in order to give the industry a chance to survive in the more challenging environment, post reform.
Greencore Sugar now has an efficient sugar manufacturing facility in Mallow and is determined to continue to produce sugar in Ireland.
EU Agriculture Commissioner Mariann Fischer Boel said it is crucial that a decision on the sugar reforms is reached this week. The negotiations will be tough, but she urged ministers to be bold.
“We are continuing our intensive contacts with all member states to bring as many of them on board as possible...
“We need reform now to ensure that sugar production has a future in Europe and to give sugar producers both in Europe and in developing countries long- term certainty,” she said.
