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Farmers to receive two thirds of sugar compensation

The Minister for Agriculture and Food, Mary Coughlan TD, said that the total EU sugar compensation for Irish farmers will be of the order of €214m out of a total compensation of €312m.

The Minister indicated that beet growers will be entitled to €44 million of diversification aid, an amount which she negotiated specially for Ireland, and yesterday's decision to allocate another €47.1m to growers and contractors, when Greencore submits a Restructuring Plan, means that the total payment to growers and contractors from the Restructuring Fund will amount to approx. €91 million. In addition, growers will obtain €123m over seven years in the Single Payment which the Minister also negotiated as part of the Sugar Reform compensation package.

Minister Coughlan pointed out that the Commission had originally proposed that farmers receive no restructuring aid. Minister Coughlan said growers' entitlements, calculated by the independent expert, will provide compensation for income losses for the next 12 years. While the figures for growers and contractors were the top of the range estimated by the independent expert, the Minister indicated that providing this compensation was appropriate.

The Minister said that the allocation to Greencore will only be decided when the company submits a Restructuring Plan but the Government had decided that the funds should be made available to workers, pensioners and for environmental and demolition costs.

Minister Coughlan said that the Government had totally rejected Greencore estimates of their assets and income losses, which the Company estimated came to €319m and that no funds should be allocated to Greencore for loss of income or for asset impairment.

The following table gives an indicative breakdown of the total aid package:

Restructuring Aid Diversification Aid Single Farm Payment (5) Total
A. Compensation to Greencore for Asset Write-Off/Loss of Income 0 - - 0
B. Growers and Contractors (1) €47.1m ?44m ?123m €214.1m
C. Employee Redundancy Payments (2) €28.4m - - €28.4m
D. Environmental and Demolition (3) €20.0m - - €20.0m
E. Pension Fund Maturity/Training and Outsourcing (4) €12.8m - - €12.8m
F. Transfer to Meet Employees Pension Fund Requirement €37.2m - - €37.2m
(1) Consistent with Government Decision
(2) In line with Labour Court recommendations
(3) Based on plan agreed with Environmental Protection Agency and estimates provided by Greencore
(4) In line with Greencore estimates
(5) Over 7 years

13 July, 2006

Note for Editors

The compensation package for Ireland consisted of two main elements: -

1. The Single payment for beet growers (?123m)

2. The Restructuring Fund (?189m) made up of diversification aid (?44m) and Restructuring Aid (?145m)

Date Released: 13 July 2006