Sugar industry revival ‘could get EU funding’

Money to help revive the country’s sugar industry could be found in the EU’s regional budget, Fine Gael MEP Sean Kelly believes following a meeting with the European commissioner responsible.

A feasibility study said that 5,000 jobs could be created from growing sugar beet and manufacturing sugar and bio-ethanol in a new factory that would require an investment of €350m.

Mr Kelly met Johannes Hahn, the regional affairs commissioner, in Strasbourg yesterday and outlined the case for restarting the country’s sugar industry, pointing out it would offer new income source for farmers, eliminate imports of up to €200m a year and help the country meet its commitment to replace 10% of its energy needs with bio-fuel.

“He was interested and positive and said he would look to see if there were any funding seams available as of now. And if not, he would see what would be possible in 2014 when the new EU budget comes on stream,” said Mr Kelly after the meeting.

The project has the support of Simon Coveney, the agriculture minister, and a number of private investors are keen to be involved.

“Once there is unity of purpose and agreement at national level, this can happen,” said Mr Kelly.

The last sugar producing plant in the country, in Mallow, Co Cork, closed four years ago following negotiations between the government and the EU and which resulted in the industry receiving more than €310m in compensation, while growers were paid around €30,000 to help them diversify into other areas.

The industry was worth €150m a year to farmers but the EU was forced to remove the subsidies they were paying to producers by the World Trade Organisation, which would have cut the price paid for beet from €44 to €26 a tonne.

Despite other countries succeeding in cutting their costs, the price of producing sugar in Ireland was one of the highest in the EU.

Since then the cost of sugar on the world market has increased, and the EU is suffering from a shortage and having to import around 15% of its needs.

“There would be substantial job creation and economic benefits from renewing the sugar industry and I am very heartened by the response from Commissioner Hahn,” said Mr Kelly.

It would not be possible to use the Mallow plant, where businessman Liam Carroll got planning for a €500m development in 2007 after investing in Greencore, the company that owned the factory.

A feasibility study suggested a new plant in the south east and showed that with improved technology and skilled growers, yields in excess of 60 tonnes/ha could be achieved, making the industry competitive, according to one of the authors, Jimmy Burke of the UCD School of Agriculture and Food Science.

Agriculture Commissioner, Dacian Ciolos, said in Dublin last month that the EU would not be opposed to reopening the industry and if the proposal to end the sugar quota goes through, then Ireland could decide for itself whether to restart the industry. “But there is no EU money available for this,” he said.