The weekend saw no easing up of the anger of the thousands of people whose livelihood depends on the Irish sugar industry. The deal concluded in Brussels last week at a three-day meeting of EU agriculture ministers was, they feel, unfair, inadequate and even unnecessary and the passage of a few days has not lessened their disappointment in any way.
Sugar growing and production has been at the heart of Irish agriculture for three-quarters of a century. The Irish Sugar Manufacturing Company was established in Carlow in 1926 following the discovery that high quality sugar could be grown on the flatlands by the River Barrow on a very economic basis. Given the need for self-sufficiency and the lack of industry in the midlands, it was a development which was much welcomed. Within 10 years there were four sugar factories, major efforts were made to improve beet and Ireland, in quality terms, became a world leader in the industry.
Entry to the European Community brought greater security in the form of guaranteed prices but nevertheless Ireland remained a small producer with many competitors whose unit costs of production, even in Europe, were significantly lower. The cost of sugar cane production was cheaper still, far cheaper. The four Irish factories shrank to just one.
The protection given to European sugar seemed, however, too good to last. Sure enough, the World Trade Organisation ruled that the regime of guaranteed prices and export subsidies is illegal because Europe's surplus production, some five million tonnes a year, ends up being dumped on world markets. Because of this, the average world selling price is now below even African production costs. There is a moral imperative to bring this unfairness to an end which cannot be denied.
It also represents waste of high order. Every euro of export sales costs the EU €3.3 in subsidies. Low-cost producers in the rest of the world are prevented from selling to EU countries by import tariffs and duties. The EU price is three times the price in the rest of the world and it has been estimated that every EU household pays almost €100 a year to support sugar prices.
Ireland, along with other EU producers, argued against radical reform of EU sugar prices but eventually bowed to the inevitable and changed tack to maximise the compensation package being offered to the 3,700 growers and to Greencore plc, the owner of the remaining factory in Mallow which employs 220. The Minister for Agriculture, Mary Coghlan, came back from Brussels with more than she might have and deserves credit for driving up the value of the package in the face of stiff opposition.
Sugar production is worth €140 million a year to the economy and supports an estimated 5,000 jobs directly and indirectly. The devastation that its closure will cause to communities cannot be overstated. The Government must now turn its attention to easing the pain of those affected and waste no time in doing so.