Government 'powerless' to save sugar industry

THE CONTROVERSY over the ending of the sugar industry in Ireland was addressed by the director general of the Department of Agriculture, Tom Moran, at an Oireachtas committee yesterday.Sugar cannot be produced in the State under current EU regulations but ethanol could be, Mr Moran said.

Mr Moran said the government had been powerless to prevent the ending of the industry in 2006 and that decision had been made by Greencore.

Mr Moran said he would favour conducting a feasibility study to determine if the industry could start up again. However, he said that under the current regime, which will not be changed until September 2015, sugar could not be produced for export to countries outside the EU.

He outlined the EU system which was in place at the time of the closure. Cheap imports from the world’s poorest countries and a World Trade Organisation ruling against the EU which meant sugar production in the union had to be cut by five million tonnes had a direct bearing on price, which fell by 36 per cent over two years.

The European Commission, he said, had brought forward a restructuring scheme with incentives to renounce sugar quotas and dismantle plants. This was opposed by the government, he said.

He said when it became clear there was insufficient support for the Irish position when the blocking majority dissipated, efforts were then redirected at achieving the best possible compensation package, which was ultimately achieved.

Mr Moran said the decision taken to close down the industry completely by Greencore was a commercial decision taken by the company in which the government had no role.

Referring to the European Court of Auditors report which said the commission had made its policy decisions on out-of-date information, Mr Moran said the report was addressed directly to the commission not to Ireland.

“It has been suggested that Mallow might have remained open if the reform was not affected. The reality is the reform was agreed for the reasons I outlined and the commission reiterated in detail its response in the report itself,” he said.

He said there were suggestions that out-of-date information may have impacted on the negotiations, but nothing could be further from the truth because at all stages during negotiations, Ireland had brought to the table the most up-to-date information.

Mr Moran, who was questioned at length by committee members on the so-called “golden share” held by the minister for agriculture in the company, said the government’s legal advice was it could not be used to prevent the closure of the Mallow plant.

He told the TDs and Senators that Greencore had been asked in March 2006 about the possibility of producing ethanol in Mallow, but it had replied it could not justify commercial investment in ethanol.

The committee has invited representatives from Greencore to attend a meeting of the committee next week.

source:irishtimes