Sugar industry up against the ropes

By Paul Mooney

The EU Commission put out only a small olive branch to Ireland and the two other EU member states that face wipe out of their sugar beet industries under its reform proposals.

Included in the harsh proposals that were finally published yesterday morning (Wednesday) in Brussels is a clause suggesting member states re-direct part of the buy out, restructuring money away from beet factories and to promote alternatives to beet.

IFA president John Dillon and Beet Committee chairman Jim O'Regan lead the protest of beet growers outside the EU Commission offices in Dublin as the EU proposals for the drastic reform of the sugar regime were passed in Brussels.

This is a change from the draft proposals that were leaked from the Commission four weeks ago.

But the core, draconian proposals remain and if accepted in full by EU farm ministers in negotiations they will end the country's sugar industry. They include:

the 39% price cut with just partial compensation by way of an annual decoupled payment at a level of 60%. That would be a price cut for Irish growers of 47%, IFA beet chairman Jim O'Regan warned yesterday.
the once off price top up for growers in the year of any factory closure, under the formal restructuring scheme.
the restructuring (buy out) scheme to encourage processors to exit sugar quickly. Funded by a levy on those processors remaining, its top payment of €730 per tonne of sugar quota would be there for processors that opted to go in year one with the buy out price falling thereafter.

Disappointingly, the proposals state that the restructuring money would be available "only to EU sugar factories'' and also that factories closing as from 1 July 2005 would be eligible.

But the proposals now also state:

"In the regions most concerned by the restructuring process it might prove to be appropriate to encourage the development of alternatives to sugar beet growing and sugar production. To this effect member states should have the possibility at a later stage in the process to allocate a certain part of the money available from the restructuring fund to diversification measures.''

IFA has demanded that if the Irish sugar industry is to be destroyed by the EU then it must put in place an alternative business for farmers.

Yesterday, IFA President John Dillon slammed the proposals. They are unprecedented in the history of the CAP in that they are deliberately designed to shut down production of a specific farm product in certain member states, including Ireland, he said.

Minister for Agriculture Mary Coughlan also said that the severity of the proposals was unprecedented and that they could lead to drastic consequences for the sugar beet industry in Ireland.

She now intended to work with like-minded colleagues to have the proposals modified to ensure a more orderly and balanced adjustment to the EU sugar regime, she said.

Greencore Chief Executive David Dilger said that the proposals threaten the long-term availability of a competitive sugar-beet supply here. "Without a guaranteed supply, no sugar business can confidently expect to survive. All stakeholders in this industry will need to work closely and effectively together to ensure that sugar and sugar beet production can continue to be adequately profitable in Ireland. That is our determined aim.''

The proposals have grave implications for workers and growers and the towns and villages that rely on the beet industry, Fine Gael MEP Mairead McGuinness said. "Apart from the implications for the European sugar industry these reforms have severe consequences for the world's poorest countries.''

"The challenge facing Minister Coughlan is to radically scale back the proposed price cuts so that growers can continue to have a profitable crop, Jim O'Regan yesterday said.

Fischer Boel defends beet proposals

But EU Farm Commissioner Mariann Fischer Boel, who visits Dublin today (Thursday), defended the proposals. A deep price cut is inevitable in the long run because of the WTO rules, she said in Brussels yesterday (Wednesday). "But if we wait there will be no funds available to help the industries and farmers leave the business in a decent and socially acceptable way.

There would be no public money available and the industry that stays in business would not have the financial resources anymore to finance the restructuring. "By acting now we are offering the sector a good deal while we are still able to do so. If we wait, we will not be in a position to offer the same good deal. We need to be honest about this. Waiting is gambling. I am not prepared to do this to our sugar sector.

'' The restructuring (buy-out) scheme would provide money to cope with the social and environmental impacts of factory closure and it would provide funds for the most affected regions to develop new business in coherence with the operating EU structural and rural development funds, she claimed. "The restructuring fund will be financed through a charge per tonne of sugar produced by those who continue in the sugar producing business.''

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