Coughlan will preside over battle for sugar fund

Analysis: There is a battle over who gets most of the €145 million fund for the sugar sector, writes Colm Keena

Minister for Agriculture Mary Coughlan has found herself in a quasi-judicial role in a row between Greencore and 3,700 beet growers.

At issue is who gets how much out of a €145 million fund for Ireland that has been set up by the EU as part of the restructuring of the European sugar industry.

Greencore says other EU compensation packages put in place, along with 10 per cent of the €145 million fund that has been ring-fenced for the farmers, means they will be better off for the 10 years post the closure of the industry, by as much as €166 million.

The Irish Farmers Association (IFA), on the other hand, quotes a report it commissioned from Deloitte to argue that as things stand, the farmers will be out by €106 million unless they get more of the €145 million fund.

There is huge distance between the two sides.

Greencore has strongly criticised the Deloitte report and insisted the €145 million fund available for Ireland is one set up to assist processors who are getting out of the sector.

It will have to lay off 400 sugar workers at a cost of €25 million, and write off €120 million in assets, post the closedown. Environmental work on the Mallow plant will cost a further €15 million. Last year it made €25 million out of its €110 million in operating profits from sugar production.

The EU regulation setting up the fund described it as an incentive for sugar growers undertaking to give up their quota production. To support growers that have to give up production due to the close of factories, "a part of the restructuring aid should be made available to growers as well as to machinery contractors that have worked for these growers, in order to compensate for losses resulting from these closures".

It said 10 per cent of the fund should be for growers and machinery contractors. However it then continued: "After consultation with interested parties, member states shall be entitled to increase the percentage ... provided that an economically sound balance between the elements of the restructuring plan as referred to... is ensured. Member states shall grant the aid on the basis of objective and non-discriminatory criteria, taking into account the losses resulting from the restructuring process."

Hence Greencore's strong stance on the Deloitte report, which the IFA is using to argue that farmers need to get substantially more than 10 per cent of the €145 million already allocated for them. A copy of Greencore's in- house critique of the Deloitte report was shown to The Irish Times yesterday but a spokeswoman for Deloitte said it had yet to be shown a copy.

"Deloitte stands over the analysis, which is founded on information from a number of third party sources, including Teagasc and the EU," she said." The allocation of the compensation fund between the growers, Greencore and other stakeholders is a matter for the Minister."

Greencore said the report is wrong in its "facts, methodology and conclusions". It quotes a sentence from the report that says the restructuring fund "creates an incentive to producers to abandon sugar beet production and renounce the quotas concerned," to argue that Deloitte has "reconstructed the EU Council directive to wrongly advance the rights of beet growers to the restructuring fund."

Greencore's David Dilger has said that if the minister gives too much of the fund to the farmers, he may challenge the move in the High Court.