Walsh leads chorus of opposition to reform proposals

The Minister for Agriculture, Mr Walsh, last night led a chorus of opposition to the proposals on reform of the EU sugar regime.

Mr Walsh said the proposals, which were exactly in line with a draft leaked last month, were a direct threat to the 1,000 jobs in the processing and supply industry as well as to the 3,800 farmers growing sugar beet.

He said the implication of the proposals on price and quota cuts, even allowing for compensation, would be to make sugar beet growing no longer viable in some member states.

Analysts said that even watered-down reform would have a significant impact on Greencore, the sole processor of sugar beet in the State. Goodbody's Mr Liam Igoe said the impact of the current proposals on the company's bottom line would be a fall of 14 per cent in earnings per share on a pro forma basis.

While acknowledging that there was significant political horse-trading in prospect on the issue, he said that even less drastic reform would require the company to overhaul its sugar business.

"There are going to be big changes one way or the other," he said. Greencore said there was no surprise in the proposals published yesterday. "Greencore has been planning for change for a period of time," a spokesman said. "It is our view that the final proposal will be different to what we are looking at now."

The company's shares slipped five cents to €3.01 on the news on a day when markets in general were poor.

Farmers' representatives were taken aback by the proposals and the timetable for implementation. "We didn't think the leaked figures would prove to be the actual proposals," said Ms Elaine Farrell, executive secretary of the Irish Farmers' Association's sugar beet committee.

"They are much more dramatic than we thought they would be. We are also surprised that the target date for implementation has been brought forward to 2005, as we understood the existing agreement would run until 2006."

She said sugar beet was worth €80 million a year to Ireland's nearly 4,000 growers. "A lot of our growers could not stay in production on the basis of these proposals and it is a crop that keeps tillage farming viable around Ireland."

Ms Farrell accepted that the regime, unchanged since 1968, was in need of reform but that Mr Fischler's outline was not the way forward.

The Department of Agriculture said an impact assessment produced previously by the EU Commission showed that Ireland was one of the more vulnerable member states to price reductions for sugar and sugar beet.