Efforts under way to revive sugar industry
In 2006, Ireland accepted EU compensation to dismantle the beet industry. Now we want back in.
When the Waterford to Rosslare train line finally ran out of puff in 2010, its slow demise could be traced back to a decision taken four years previously: the acceptance of EU compensation by Ireland’s sole sugar producer in return for dismantling the State’s beet industry.
That decision has been much lamented, but in the past year attempts to resurrect the industry here have started to gain pace.
Two groups in particular, Beet Ireland and the Irish Sugar Biorefinery Group, have made robust proposals for the country’s re-entry into the market, and the campaign now enjoys strong support at home.
Last month Taoiseach Enda Kenny told Beet Ireland he strongly believed in the project and recognised how it would contribute to Ireland’s future economic success, while Minister for Agriculture Simon Coveney has consistently advocated for the industry.
But any hopes of a return to sugar production depend on a number of factors, among them the construction of a €350 million-€400 million processing plant and, crucially, approval from Europe.
In 2006 the EU introduced a temporary restructuring scheme to bring European sugar production in line with World Trade Organisation and other international obligations. The scheme established a pan-European quota until 2015 and offered less-efficient countries incentives to cease production.
Greencore shut its Mallow facility with the loss of 320 jobs. For their troubles, the company received €127 million, beet growers got €220 million, while machinery contractors received €6 million. Bulgaria, Latvia, Portugal and Slovenia abolished their sugar operations along with Ireland, allowing strong producers such as Germany, France and Holland to thrive in a changed market. Following the reforms, sugar prices soared.
Escalating food demand
“Really it was a supply and demand issue,” says Prof Jimmy Burke of UCD’s School of Agriculture and Food Science. The world demand for food started to escalate rapidly from 2002 and continued to climb at a higher rate than initially anticipated. In order for Irish production to be viable, sugar needs to trade at above €500 a tonne. It currently realises between €700 and €800 a tonne.
According to Burke, European countries have made more money from sugar operations since 2006 than during the 50 previous years. “No one foresaw which way the market was going to go.”
The end of the industry here had consequences beyond depriving the under-utilised Rosslare train route of vital freight. Earlier this year Senator Mary Ann O’Brien, who runs Lily O’Brien’s chocolates, said her company found it challenging to win lucrative tenders that prioritise security of supply, provenance and price, without the domestic availability of sugar.