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Ferris condemns sugar compensation scheme folly

24 October, 2006


The Sinn Féin Spokesperson on Agriculture, Martin Ferris TD has strongly condemned the fact that the compensation given to sugar beet growers is to be taxed. Deputy Ferris went on to reveal that Greencore received more compensation for shutting down the factory and laying off workers, than it would have for transferring to bioethanol production, which he described as an act of pure folly.

 

The Kerry North TD said: “Taxing the producer’s compensation adds insult to injury on top of the fact that Greencore were given the largest share of the compensation monies in contrast to the smaller sums given to the growers. The ongoing refusal of the company to honour its initial commitment to a redundancy package for the former workers at the Mallow factory only rubs salt into the wound.

 

“It also emerged from a reply to one of my own questions last week that Greencore were given a larger sum in compensation for closing down production than if they had decided to transfer over to the processing of sugar beet for the production of bioethanol. This is an act of pure folly for an economy like ours so dependent on foreign energy supplies and in need of new, cleaner forms of energy.

 

“By shutting down the industry they received 100% compensation whereas maintaining the factory, the jobs and sustaining the sugar beet growers would only have entitled them to 75%. There is clearly something amiss when companies are rewarded for closing things down and preparing to use their assets for speculative gain, rather than being encouraged to invest in a viable and necessary new area of production.”

 

CRÍOCH

 

Text of question and answer follows:

 

To ask the Minister for Agriculture and Food if her Department will consider the possibility of holding a public hearing on the prospects of utilising the existing facilities at the former sugar factories of Carlow and Mallow for the processing of sugar beet and possibly other energy plants for use in the production of bioethanol; and if she will make a statement on the matter.

- Martin Ferris.

 

For WRITTEN answer on Tuesday, 10th October, 2006.

 

Ref No:   31502/06

 

REPLY

 

The Minister for Agriculture and Food: (Mary Coughlan)

 

Decisions on the future use of the former sugar factories at Carlow and Mallow are primarily a matter for the owners, Greencore Group plc. Anybody who expressed an interest in the possibility of utilising these factories for bioethanol production was advised to pursue the matter with Greencore.

 

The future use of the Mallow factory is, of course, linked to the EU restructuring scheme for the sugar industry, introduced under the agreement on reform of the EU sugar regime. Restructuring, in this context, refers to the abandonment of sugar quota production, the dismantling of the factories concerned and the allocation of restructuring aid to the affected processors, growers and machinery contractors. In Ireland, the restructuring scheme applies only to the Mallow factory since factories that had closed prior to July 2005, such as the Carlow factory, are not eligible.

 

The restructuring aid scheme as provided for in Council Regulation (EC) No 320/2006 is subject to the submission by the processor of a detailed restructuring plan for the industry. The Regulation provides for payment of the full amount of restructuring aid where a sugar processor undertakes as part of the plan to fully dismantle the redundant sugar factory. A reduced rate of aid (75%) may be paid where a factory is partially dismantled and converted to non-food production, such as bioethanol. A decision on whether to fully or partially dismantle the factory is entirely a matter for the sugar processor concerned.  Greencore submitted an aid application for restructuring aid in July under which they undertook to fully dismantle the Mallow factory and sought the maximum amount of restructuring aid.  As the application met the requirements of the EU Regulations it was approved subject to the outcome of the Judicial Review proceedings instituted by Greencore concerning, inter alia, the percentage of aid reserved for growers and contractors.

 

Before the application for restructuring aid was received from Greencore I raised the possibility of using Mallow for bioethanol production with the Company having regard to the incentive under the restructuring scheme, the inclusion of sugar beet in the energy crops scheme and the extension in the last budget of excise relief of €205m which, when fully operational will support the use and production of 136m litres of biofuels annually.  The Company informed me that it did not intend to produce bioethanol in Mallow.

 

The Government will be bringing forward further initiatives to support the development of the biofuels sector as set out in the recently-launched Energy Green Paper. The Minister for Communciations, Marine and Natural Resources, who has overall responsibility for developing the biofuels sector, announced the new excise relief scheme for biofuels at the end of July and indicated that capital grants for biofuels facilities are also being provided as part of the Government's overall programme to promote biofuels and biomass. I understand that the capital grants programme is currently being designed and will be rolled-out as a separate initiative to the excise relief scheme.

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