Sugar Bill, 1990: Second Stage (Resumed).

Thursday, 21 February 1991

Dáil Éireann Debate
Vol. 405 No. 5

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Question again proposed: “That the Bill be now read a Second Time.”

Mr. Kavanagh: Information on Liam Kavanagh  Zoom on Liam Kavanagh  When we returned to the House after the Christmas Recess the first item to be dealt with was the Sugar Bill. That was the same day as the budget and I had an opportunity for about 20 minutes to put on record the Labour Party's opposition to this Bill and our intention to oppose it on Second Stage. I think we could deduce from the speech here of my colleague Deputy Deasy that the Fine Gael Party were not going to oppose Second Stage of this Bill; therefore it appears to us on the figures in this House that it is quite likely that this Bill [1232] will pass that Stage. Nevertheless I was trying to put on record why I thought this Bill should be opposed.

The Taoiseach before he went into Government in 1987 assured the then Assistant Secretary of the Irish Congress of Trade Unions, Mr Peter Cassells, that the semi-State bodies were safe in the hands of Fianna Fáil and there was no intention to privatise any of those bodies. We know that the much criticised Thatcher Government of about the same time, on going into a general election listed all those areas in the public sector — water, gas, telecommunications and so on — they intended to privatise. They went to the country and received a mandate to do so. It is very strange that in January 1987 the Taoiseach could give representatives of the workers in all semi-State industries an assurance that their companies would remain within the public sector.

The position of the Progressive Democrats was somewhat different in that they gave some indication that public enterprise would be attacked should they come into power. At the last general election, whereas the Progressive Democrats had some, shall we say, arrangement with the Fine Gael Party, the Government that finally emerged was a Fianna Fáil-Progressive Democrats Coalition. Therefore, the question would have to be posed: was it the Progressive Democrat element of the Government that persuaded the Fianna Fáil Party to take on board the privatisation of various semi-State companies beginning with the Sugar Company, and going on to Irish Life. Indeed, from remarks made it would appear that Telecom Éireann and even a slimmed down An Post could fall into this category. We are aware that the chief executive of Bord na Móna has indicated that that company also could be privatised.

It is my opinion that in the general elections of 1987 and 1989 the electorate were misled since the major Government party had given a clear signal that they did not intend to privatise any semi-State companies, maintaining that workers in those companies could be satisfied with [1233] the written assurances given to Congress to that effect. As we are aware, policy has since changed. Now everything within the public sector that can be moved, and some that cannot, is being examined in that light.

I contend that this Government and the previous minority Fianna Fáil Government never received a mandate to do this; they never put it to the electorate as part of their policy. In that they differ significantly from the stated position of the Conservative Government in England, who listed their proposals in that regard. Yet our electorate have never given this or the previous Fianna Fáil minority Government any mandate to privatise any of these companies. Neither has there been a debate with the general public on this issue. Certainly, the Government cannot contend that they have had this issue publicly debated in the run up to a general election seeking that mandate.

We in the Labour Party are concerned about what is being done, for several reasons. In his introductory remarks the Minister said that he had had a study conducted into the affairs of Siúicre Éireann under three headings: first, the continuation of their present activities and structures, it remaining a private company. The second proposal was that it be considered for total privatisation. The third option was partial privatisation and commercial development of the company while retaining a degree of State control over their sugar operations and quota.

We know that the Sugar Company has a very valuable asset in the EC quota of 200,000 tonnes of sugar which has rendered it a very attractive company to private companies within and without this State who might be interested in its privatisation. There are those of us who think that one cannot have a little privatisation and that the guarantees enshrined in this Bill fall far short of what we and workers within the industry would regard as a safeguard for them. We contend that State control over the company should have been retained at 51 per cent at least if the Government pursued this [1234] privatisation. Our contention was that it should be retained under total State control. Since it is obvious that this Bill will receive a Second Reading — and we will be tabling amendments on Committee Stage — at the very minimum we should demand that the company remain in State control to the extent of 51 per cent.

Of course, the provisions of the Bill stipulate that the Minister will retain 45 per cent of the shares in the company with beet growers and workers being offered a share option of 5 per cent, the safeguard for the company being the golden share of the Minister. I contend that the golden share does not constitute a safeguard at all. I can see no difference between what the provisions of this Bill offer and those offered in the Bill, for example, to privatise Jaguar in Britain, when the golden share proved worthless when circumstances arose in which the State and Government there wished to get rid of their interests in that public company. Therefore, I contend that that golden share could be got rid of easily if circumstances demanded here. It would be my hope that the Minister could give much more assurance about that golden share than workers and the public in Britain received when it was offered as a great safeguard for their interests in Jaguar and other companies. This golden share will be seen for what it is, merely something to give the impression that the Sugar Company will remain a partially public one with a large private interest. It is also my belief that the private sector will have little interest in the company if they believe the State still retains the ability to take decisions over their heads. On the one hand the Minister has endeavoured to give the impression that by way of this Bill he is privatising the Sugar Company and, on the other, that the company is safe with the Government as long as this golden share maintains the balance between the private and public interests.

Neither do I see any great enthusiasm on the part of beet growers that their position or future is secured. They have written to us public representatives [1235] expressing their concerns about their future in the industry and about the quota. If that quota were lost to the country obviously their future in a very valuable sector of the agricultural industry could be lost also. Yet they have not been assured either by the provisions of this Bill or the Minister's remarks that their concerns are being met. Therefore, the workers and growers will look with a great deal of suspicion at what is proposed under the provisions of this Bill.

The recent announcement concerning cutbacks in An Post would lead to considerable concern that workers' rights cannot be assured in any Bill coming before this House. Whether it be a wholly public company or a private one, enshrining assurances in a Bill do not sufficiently guarantee either of the groups or interests I have mentioned. I have grave concerns about the assurances the Minister has given, and in discussions with unions representing the workers, that their jobs will be secure in the future. I hope the amendment we will put down on Committee Stage will give greater assurances, if they can be given as a result of being accepted by the Minister.

The options offered in the Bill should be looked at, having regard to the options available in other companies such as An Post. The Labour Party are disappointed that the joint venture option was not seriously considered by the group who examined this company. FII, a company which was facing difficulties in the mid-eighties, survived because this option was considered and joint ventures were approved in that case. The Minister should have seriously considered that option, especially as he has the example of the success in FII. That option would have assured our EC quota of 200,000 tons. It would have met the needs of the growers and assured the jobs of the workers.

When we last debated this Bill we said that the company as it stood had made very good profits over the last ten years, having been brought through a very difficult period due to the excellent leadership in the company provided by the [1236] chief executive of the company, their board and their worker directors. The company was rationalised. The branches in Tuam and in Thurles were closed. Great sacrifices were made by the people who work in the industry and by the people who supplied the two factories in order that the company should be able to rationalise.

The remaining two configurations of the industry, seeing that success is measured by the profit and loss account, should continue as they are. The company were expanding and increasing their profits. Both the chief executive of the Sugar Company, Mr. Comerford and the chairman were strong in their demand that the company should be privatised because it would give them more latitude in the wider industrial world to attract more business. I admire what these gentlemen and their boards have done in the past, but I disagree that a company making profits and expanding could not have had the same latitude in the public sector as in the private sector. After all, one of the assurances given to the workers in Thurles was that the company could go out and bring industry to the town in order to make some reparation to the workers and the people for the loss of a large industry.

We do not agree with the Government. We do not trust the Government's assurances. The Minister, Deputy O'Kennedy, gave very clear assurances to the people of Thurles during the 1987 election in letters distributed to all the workers that the company in Thurles was safe as long as Fianna Fáil were returned, and certainly if he became Minister for Agriculture. Why should we now accept the Minister's assurances and guarantees on this Bill? We are very sceptical about the contents of the Bill and the assurances in the Minister's speech. We are opposing this Bill because there is not any reference to workers' rights and because security of employment is not assured in the Bill. The concerns of the growers are not covered in the Bill either.

Since the Bill was published the Minister has obviously talked to unions and to growers, but the Bill before us today [1237] does not have those assurances in it. As long as that is the case we have to be sceptical. For all the reasons I put forward today and on 31 January last, the Labour Party will not support this Bill on Second Stage and probably not on Committee Stage unless radical amendments are made to it. Because of the genuine concerns of the people in the industry and those depending on it and of the agricultural community, the Labour Party will oppose the Bill. If the Members on the other Opposition benches have decided to support this Bill, I hope they will have second thoughts and will join us in our opposition to it.

Mr. Sherlock: Information on Joe Sherlock  Zoom on Joe Sherlock  I move amendment No. 1:

To delete all words after “That” and substitute the following:

“Dáil Éireann—

(a) noting that the Irish Sugar Company, as a result of good management and sacrifices made by the workforce, is now trading profitably and is not costing the taxpayers any money,

(b) believing that the company has tremendous potential for expansion and diversification and that it should be used as a basis on which to develop a comprehensive food processing industry,

(c) further believing that privatisation of all or part of the company is not in the public interest,

therefore declines to give a Second Reading to the Bill.”.

If ever there was a proposal to privatise a company which was unjustified, unwarranted and unnecessary then this Bill to sell off the Irish Sugar Company is surely it. The Workers' Party will be fighting it every inch of the way. The Minister in his budget speech stated that privatisation would serve to reduce substantially our actual borrowing and eventually our Exchequer borrowing requirement for 1991. What we can deduce from that is [1238] that the proceeds from privatisation will be used to reduce borrowing and thus help ease the burden of the national debt and the debt servicing costs. It was stated that it was hoped to realise between £50 million and £60 million. If ever it could be stated that selling the family silver to pay the mortgage is bad policy, most certainly this applies now.

Rather than developing this great resource to generate wealth and boost our economy, privatisation revenue will be used to effect an apparent but not real improvement in public finances. The attainment of a debt/GNP ratio of 100 per cent by 1993 has a lot to do with the privatisation of the Irish Sugar Company. This company made a major contribution to regional development in employment creation and the purchase of profitable crops from farmers. There were spin-off effects for hauliers, traders and others. The contribution of the Irish Sugar Company to GNP is very substantial each year. Employment, of course, is no longer a major objective of Government policy; the reduction of the national debt is their primary objective, and everything follows from that. It is like the story of killing the goose that laid the golden egg.

The recently published Programme for Economic and Social Progress refers to the Government's commitment to the maintenance of a viable and commercial semi-State sector; yet here is a company which is both viable and commercial and it is being gift wrapped and handed over to the private sector. It is now clear that this Government have embarked on an extensive programme of privatisation. The legislation to facilitate the privatisation of Irish Life was passed last year and the Government have been desperately seeking a buyer for Irish Steel. Verolme Dockyard has been sold. Other probable candidates for privatisation include B & I, ICC and possibly ACC. It is not a case of the Government simply deciding to rid themselves of a number of loss-making companies which are draining scarce Exchequer resources. The list includes large companies, small concerns, profitable and unprofitable [1239] operations. The basis on which these decisions are being made is not commercial but clearly ideological. Fianna Fáil have either abandoned the support they once held for the efficient and vigorous commercial semi-State sector or else the Progressive Democrats tail is wagging the Fianna Fáil dog.

There is a number of myths about the respective performances of the public and private sectors. There is the myth that all private companies are efficient and that all public concerns are inefficient, that all private companies are profitable and all public companies are loss makers. There is the myth that private enterprise is innovative and adventurous, while public enterprise is conservative and over-cautious. Many of these myths have been fostered by rightwing economists who have been provided with platforms by the privately-owned newspapers to wage ideological war against public enterprise in favour of private enterprise. Some of the proprietors of the same newspapers would, of course, be only too delighted to get their hands on the cream of the semi-State sector. There have, of course, been semi-State companies which have performed very poorly but there are also those who have performed excellently.

In many cases semi-State companies were established originally either because of the collapse of private companies or because private enterprise was unwilling to provide badly needed public services. Seán Lemass said that State-financed industries had been set up only where considerations of national policy were involved or where projects were beyond the scope or unlikely to be undertaken by private enterprise. The Irish Sugar Company was established in 1933 as a result of the failure of the privately-owned Irish manufacturing company which had been established in 1925.

I need hardly remind the House of the appalling record of Irish private enterprise and the necessity for the Oireachtas to intervene on three occasions during the past decade to rescue some of the biggest concerns in the country from the [1240] results of their own inefficiency. There was, first, the PMPA, which collapsed in 1983, threatening the entire insurance industry. Shortly afterwards the Dáil had to provide more than £100 million in public funds to save Allied Irish Banks from their mishandling of ICI, a disaster so great, we were told, that it threatened the entire banking system. Only last summer the Dáil had to be recalled to rescue the golden boy of Irish private enterprise, Mr. Goodman — the man held up by the champions of private enterprise as an example to be followed by all — from the results of his own greed an recklessness.

In November 1988 at Mr. Goodman's request I, with my party president and one other person, met him and his executive. Mr. Goodman's statement at that time was that he was interested in buying into the Irish Sugar Company. He stated quite clearly that the Irish Sugar Company, because of its heavy borrowing could not survive and was not a viable industry, but he would make sure that the industry would survive. He made no secret of the fact that he had strong support on the Government side and also from the main Opposition party. What would have happened had things gone right for him in the beef industry and if the Bill to privatise the Irish Sugar Company had been introduced a little earlier? I can imagine the mess we would now have in the sugar industry.

Neither has Irish private enterprise delivered the jobs, despite extensive feather-bedding by the State amounting to more than £1,100 milion in tax reliefs each year and more than £370 million spent on industrial development through bodies like the IDA. Unemployment remains the highest in the EC and looks like going up again, The jobs created in the past ten years have been largely through foreign investment in Ireland. Why do we assume that selling off the Irish Sugar Company to private interests will be in the public interest?

In The Workers' Party discussion document Making It Work/A Framework for Industrial Development, published last May, we outlined our position on the role [1241] of State companies and of the private sector. The Workers' Party, the document states, believe that a flexible approach should be adopted regarding the role of State enterprise in pursuing national industrial development. It goes on to state that where State companies are best placed to exploit industrial development opportunities, then they should not be prevented from doing so for political or ideological reasons. Similarly where private enterprise offers the best potential and is prepared to work within the scope of a national industrial plan, it should be given every assistance to get on with the job. It is our strong belief that the Sugar Company is best placed to exploit industrial development opportunities in the sugar and food industries. There is nothing to suggest that privatising it will assist the industry in any way. Indeed the record of the private sector in the food area has been appalling and the numbers employed in what should be our most important industry has declined steadily. Since 1972 when we joined the EC the numbers at work in the food industry fell by 19 per cent from 43,700 to 35,000.

The Sugar Company has had its ups and downs since it was established and many of its problems had their origins in political decisions made by various Governments. The brave attempt to diversify the food processing industry and marketing through the establishment of Erin Foods was undermined by Government decisions. General Costello who had done so much to develop the company resigned in 1966, leaving the way open for Tony O'Reilly to be appointed general manager and use the position to finish off Erin Foods and launch his international business career. When General Costello as chief executive of the Sugar Company in the early sixties established Erin Foods, the food processing industry, Government interference restricted the food products to 10 per cent of the home market. Just imagine the products that we could produce on our own land, that we could manufacture in our factories. Government Departments said the company were restricted to 10 per cent of the [1242] home market and further interfered in the appointment of marketing managers so that the aggressive marketing policy which should have been taken up by Erin Foods at the time was never pursued.

We come to the mid-sixties when in fact a decision was made to separate the food division from the Sugar Company, and this is at a time when in fact the Heinz company was appearing on the scene. That disastrous decision which was taken by the then leader of the Government, Mr. Jack Lynch, and supported later by the then Minister for Finance, Mr. Charles Haughey, in 1966-67, agreed to separate Erin Foods from the Sugar Company, link the food company to the giant Heinz company to be gobbled up. That is exacty what happened to our food industry.

In 1966 General Costello, who had struggled for years to build up a powerful food producing and processing industry in Ireland based on co-operation between State enterprise and co-operative farming and joint agreements with the producers on the land, resigned and was replaced as general manager of the Sugar company-Erin Foods by Tony O'Reilly, a fanatical advocate of private enterprise. That is the sad story of the linking of what would and should have been a viable company, Erin Foods, which produced and manufactured what we could grow ourselves, to the Heinz company. We know the result: Erin Foods in Mallow, Fastnet Foods, Carlow Foods are all gone. We also know what happened to the Tuam Potato Processing Plant.

Now we are asked to support the privatisation of the Sugar Company. There is no way we will do that. We will fight this every inch of the way. I would like to state as well the attitude of workers and growers in this matter and I will come to that later on.

Many of the problems in the past decade in the company were the result of Government decisions instructing them to keep viable factories open for social and political reasons. The company had planned to close the Tuam plant in 1980 but the Government insisted that it be kept open until 1986 at a cost in current [1243] prices quantified by the company at £13.2 million. This is the kind of political interference in the affairs of the company that has been going on.

Against this background the recovery of the company in recent years has been remarkable. From very substantial losses in the early eighties, as high as £22 million in 1982, the company made net profit of nearly £15 million in the year ended 1989. Indeed, the figures would have been even better had the company not decided to write off the £10 million it made from the sale of its head office against the cost of the Tuam closure. Operating profits before depreciation and interest were £21 million, giving a return of around 22 per cent on capital employed; and borrowings which in 1982 were as high as £86 million were brought down to £22 million bringing with it a major decrease in interest charges. The present chief executive of the company, Chris Comerford, managing director, is quoted as saying that rationalisation is largely behind this and that they can look now to expanding the group as a profitable commercial entity in the agri-business sector. I wonder at what stage did he change his mind about the position of the Sugar Company, because he very definitely had proceeded to broaden the base of the company.

The figures for the year ended September 1990, which had been published since the debate on this Bill started in the Dáil, showed an even healthier picture. In 1990 a report disclosed profits of £22 million, an increase of 30 per cent over the previous year. Turnover jumped from £215 million to more than £271 million. That is the company that this Government, with the support of the Opposition, are proposing to hand over to private enterprise. If anyone has reason to feel bitter about privatisation of the Sugar Company it must be the workers who were repeatedly called upon over the last decade to make sacrifices to help establish the company on a sound basis. They agreed to a major redundancy programme, including the closure of Tuam and Thurles factories, but it seems that the reward for their co-operative [1244] approach is to be sold off to the highest bidder. This very day I received from the workers in Mallow sugar factory a petition signed by them. Yesterday when they knew this Bill was being debated here today they spontaneously initiated a petition which stated that “the undersigned employees of the company in Mallow, noting that the company is trading profitably and as a result of sacrifices made by the workforce and good management, oppose the privatisation of the company”. At the same time the company was able to go in and give them details of privatisation of the shareholding, trying to hold a carrot out to the workforce. However the workers know what they are about. They know when there is security and when there is not, and they have very definitely appraised the situation.

It seems extraordinary that, once the company had been streamlined and started to make a profit, the Government decided to sell it off. The company is expanding and I expressed my appreciation of and commended the chief executive officer for broadening the base of the company when I spoke earlier. The company had bought one third of a share in James Budgett and Son, the second largest sugar wholesaler in the UK; it bought a controlling interest in the edible oils manufacturing company of James Daly, and acquired half of the shares in Odlums. That is a progressive company, broadening its base into areas that are all linked in one way or another with the sugar industry. There is plenty of scope for expansion and for further joint ventures along the lines of the Odlum linkup. The collapse of the Goodman Group would have provided the potential for expansion and development through the acquisition of the food industries.

In 1982, it came to my notice as a Member of the Dáil that a very big French company known as Ferruggi had come to Little Island in County Cork to establish a sweetner manufacturing business, Fructose Corn Syrup. I asked the then Minister for Agriculture, whom I knew was in charge of the Irish Sugar Company what he knew about it but he [1245] replied that he did not know anything about it. I then discussed the matter with the chief executive of the Sugar Company. I also asked the then Minister for Industry and Commerce, who is now Minister for Finance, what he knew about this company and he knew nothing about it. I asked them to meet to discuss the situation. In 1982, which is just a few years ago, a company was established in this country which was a real threat to the Irish sugar industry and the Minister for Agriculture and the Minister for Industry and Commerce had no information on it. How interested are they now to appraise the situation and to secure the sugar industry in this country for the future? I would ask the Minister to tell us what guarantees can be given, whether he will guarantee that the employment within the Sugar Company will be retained and increased and also the sugar quota of this country. We have a sugar quota of 200,000 tonnes: 182,000 tonnes is A quota and the balance B quota.

With this Bill all of this is being abandoned and the future of what should be the centrepiece of our food processing industry is being handed over to private enterprise. When the Minister announced his decision last October he said that he would be retaining 45 per cent of the shares in the company, but there is nothing in this Bill to require him to do so. The Bill clearly seems designed to facilitate the total sell-off of this important public asset. Let us always bear in mind that a strong labour force, which presently exists in the sugar company, is part of industrial development. You cannot have a manufacturing company without having a product. The product of the Sugar Company is the sugar beet grown on our land. We can cultivate our land and grow the beet on it. There is no guarantee for the future of the sugar quota in the Bill. Section 2 (2) refers to the Minister holding a “special share”, which he may claim is designed to prevent a total takeover by foreign interests, but section 2 (3) makes it clear that the Minister can dispose of this “special share” and other shares without any further reference to the Oireachtas. If this Bill is [1246] passed there will be nothing that can be done to prevent control of the Sugar Company passing out of Irish hands. In that situation what will happen, as I asked earlier, to our national sugar quota?

I will deal with a few points that were raised in the Irish Congress of Trade Unions publication Public Enterprise and Economic Development — A Policy Statement on Privatisation issued in March 1990. I wonder who convinced the leadership of the Irish Congress of Trade Unions to change their minds on the issue of privatisation? The previous speaker referred to some points in the document that was issued and there were different options. On the question of the “golden share”, this is what the Irish Congress of Trade Unions said at that time:

The so-called “golden share” option is not a guarantee against foreign takeover as has been demonstrated by the Britoil and Jaguar experience in the UK. At best, it enables a Government to respond to a situation as it sees fit. As happened in the UK, the Government decided not to exercise its right to block a takeover.

Knowing of the strong private enterprise lobby in this country, the same thing could happen here. Therefore, the “golden share” option is a very unreliable mechanism for protecting the public interest in these companies.

The “golden share” is also being examined by the European Commission and may be deemed to be contrary to EC competition law. I will not say whether it is or not but I am reliably informed it is more likely to be deemed to be contrary to EC competition law. This is a good reason the Government should withdraw this Bill and thus secure the Irish sugar industry in the interests of the State, of the growers and of the workers. This is very shortsighted policy. Do they hope to say: “we are great fellows, we are keeping the finances of the State in order”? But at what cost?

The Sugar Company is not costing the taxpayer any money. The Bill as drafted does not contain any provisions to protect [1247] the jobs or working conditions of workers, who have done so much to reestablish the company on a sound footing. Why is there nothing in the Bill to protect the interests of the workers? I will remind the Minister, if it is necessary for me to do so, of statutory instrument S.I. No. 306 of 1980, which deals with European Communities (Safeguarding of Employees' Rights on Transfer of Under-takings) Regulations, 1980. If the Government are so concerned about the interests of workers, why have they already incorporated in the Bill the provisions to safeguard the interests of workers?

As I said already the company are not costing the taxpayer any money and have the potential to pay a dividend to the Exchequer shortly. Is that not the road we should be going down, because the company are now profitable and would pay a dividend to the Exchequer? By doing so, the Minister would secure for all time the Irish sugar industry and also help to develop the food industry which is crying out for development. It is a shame and a scandal that we are importing food which could be grown and processed here while at the same time we are exporting our young people. Quite recently I read in The Cork Examiner an interview with a person who had come home from one of the cities in England and who told The Cork Examiner journalist that “you would be ashamed of the number of our young people who are homeless and hungry in Britain”. This is happening while we are selling off an industry that could provide jobs in the future.

The reasons for seeking to privatise the Irish Sugar Company are ideological and not commercial and the Minister should have the honesty to admit as much.

Mr. Cullimore: Information on Séamus Cullimore  Zoom on Séamus Cullimore  I compliment the Minister on bringing this important legislation before the House in such a short period of time. I am satisfied that the Minister and the Government have taken the correct decision in their proposals to restructure the Sugar Company. The [1248] legislation will have the effect of allowing the company to develop and expand while at the same time it will permit the Government to recoup some of the substantial moneys that have been invested in the company over the years.

As a quoted company it will have access to substantial resources which will be of great assistance to the company in diversifying and expanding. The sale of the shareholding of the Minister for Finance following flotation will ease the Exchequer borrowing and help to reduce the national debt. The development of Irish agriculture and food is of central importance to the development of the Irish economy. An intrinsic part of that development is the development of State manufacturing companies.

The Sugar Company were set up under the provisions of the Sugar Manufacturing Act, 1933, with the main objective of manufacturing sugar from beet. However, over the years the company have diversified into many new areas such as agriculture, heavy engineering, food processing, fertiliser distribution, molasses trading and many other areas. Partial privatisation will further enhance the process of diversification which in turn will lead to greater profitability and subsequently greater job creation.

The company were in a loss making situation in the early eighties but due to the commitment, loyalty and dedication of both the employees and the small farmers — the beet growers — we now have a very profitable and effective company. Turnover has reached over £270 million with an operating profit of over £18 million.

Being from and representing the constituency of Wexford where over 1,000 farmers depend, for a portion of their income, on sugar beet, and an area which sells over a quarter of the raw material needed for the Sugar Company to prosper, I am obviously very concerned about the long term viability and future of this company. I am satisfied that the legislation before this House will protect the future of both the employees and the [1249] farmers who depend on the Sugar Company for a living. I am glad the Minister has recognised the very important role which both the employees and the farmers have played in the expansion of this company. He has made provision for a shareholding for both the employees and the farmers that will further enhance this company and will ensure the continued loyalty and commitment of both the employees and the farmers to the development of the Irish Sugar Company.

I welcome also the provision which allows the Minister for Agriculture and Food to acquire a special share in the holding company. This will prevent the disposal of the controlling interest in Siúicre Éireann or the Sugar Company's assets. I call on the Minister to ensure that under no circumstances can this share ever be sold.

Particular attention must be paid to the 5,000 growers who are the cornerstone of the Irish Sugar Company. It is vital that growers will be party to any future decisions regarding the redistribution of the Irish sugar quota. The new company must recognise the rights of existing contract holders in traditional beet growing areas. As a representative from the Wexford constituency I am particularly concerned about this aspect. We, in Wexford, have been loyal to the Sugar Company. I would ask the Minister to ensure that under the provisions of the new legislation these farmers will always have the right to maintain their traditional beet growing contracts.

The new agreement must also ensure equal distribution of profits from higher sugar extraction. I would ask the Minister to pay particular attention to this matter. There is growing concern among the farming community that they are not getting their fair share of profits from the higher sugar extraction. An agreement must be established detailing aspects of contract offers and acceptance, payment systems, management of sugar quota and sugar surplus.

The company are succeeding in a very competitive business but in order to continue to succeed in this business they must [1250] have access to the capital markets to allow them to raise sufficient finance to permit them to diversify, to expand and to create further jobs resulting in greater profitability.

The sale of the shareholding of the Minister for Finance following flotation will help to reduce our national debt and the interest repayments on that debt. I mention this because of the very substantial burden this debt is placing on every individual and every family in the State.

In conclusion I would like to compliment the Minister and the Government on bringing forward this very positive legislation. It will have a two-fold effect, that we will see continued expansion of the Sugar Company, greater diversification, greater profitability and, in the long term, greater job creation while on the other hand it will allow the State to repay part of the substantial money we owe arising out of our foreign debt.

Mr. Browne: Information on John Browne  Zoom on John Browne  (Carlow-Kilkenny): Cuirim fáilte roimh an mBille seo. Tuigim go bhfuil ag éirí go maith leis an gcomhlacht, go bhfuil brabús mór acu i mbliana ach go bhfuil airgead ag teastáil uathu. Tá mé cinnte nach bhfuil an t-airgead ag an Rialtas agus, mar sin, tá súil agam go mbeidh rath ar an iarracht seo de bharr an Bhille. Tá sé tábhachtach don chomhlacht, don tír agus do Cheatharlach go bhfaighfí an t-airgead agus go n-éireodh leis an scéim seo.

There is not in this wide world a valley so sweet as that vale down in Carlow which grows such fine beet. That means I have a special interest in the Sugar Company representing as I do the sweetest county in Ireland, the county that in 1926 had the privilege of having the first sugar factory opened in modern times when Bishop Foley turned the sod under the watchful eye of Mr. Edward Duggan. Since then Carlow has gained much from the sugar industry. It has been an excellent industry in the town and has attracted other industries. It has been good for the farmers because, as we know, a number of crops and other farming enterprises [1251] have run into difficulties. The beet industry appears to be the one industry that, despite the vagaries of the weather and problems that arise at different times, gives a reasonable return to the farmers. I am sure they are not happy that they are receiving sufficient profit and I will deal with that point later as Deputy Cullimore has done. In general it is the one crop that has stood by this country and as a result it has been of tremendous help to the workers who in turn benefited from the production of beet.

Employment has been a major factor but recently there has been a cutback. In 1981 we had an employment figure of about 3,600 but that was reduced to almost 1,200 last year. This has nothing to do with the privatisation of the company, I did not follow the logic of Deputy Sherlock's line of argument. The present position is that the company has been streamlined and people have been made redundant. Some people did not want to be made redundant, but many more were willing to step down because of their age. I feel sorry for the people who did not want to be made redundant. This streamlining will mean that the company will be able to compete in competitive markets in the future. The company have made large profits this year and I am sure they will continue to do so.

The Bill will enable the company to secure extra finance. They will have to leave their core business of producing sugar and get involved in the agri-business. If they want to get involved in the agri-business they will need finance. As I said earlier, they cannot look to the Government to provide this money. Unfortunately, the Government do not have enough money to meet all the demands made on them. I am sure that if we were in power we would have more money. However, that is a different kettle of fish.

Even though I welcome the Bill and have no hangups about privatisation, there are some aspects of it about which I am concerned. The workers in the company and farmers have to be protected. I regret that the Minister has not included [1252] a provision in the Bill which will protect the workers. I know he gave a commitment that he would introduce such an amendment on Committee Stage. He said, and I quote:

This will provide specifically that the rights which employees of Siúicre Éireann, or its subsidiaries, hold before the date on which the Minister for Finance transfers his shares in Siúicre Éireann to the new holding company will continue to be held by them on and from that transfer date. Provision will also be made to ensure that employees will not suffer any less favourable terms under their pension or superannuation schemes, after that transfer date.

As a former colleague of the Minister's in college, I have no reason to doubt his word. It is very important that he introduces such an amendment on Committee Stage and, if it is not introduced, all hell will break loose. It is important that the workers who have made this company so successful do not suffer in their dealings with Greenvale, the new holding company. I look forward to the introduction on Committee Stage of the amendment promised by the Minister.

What will happen to the 1977 legislation, which provided for the appointment of worker-directors. Will the worker-directors currently working in the Sugar Company be transferred to Greenvale? Will legislation be introduced to cover this issue? I should like the Minister to say in his reply what the position will be in relation to worker-directors.

Reference has been made by previous speakers to our sugar quota. Our quota of European beet production is 2 per cent. This may not be regarded as a very large share in a European context, but we regard it as a major share. We have to make sure that our share of this market is preserved. We probably have no grounds for worrying about our quota in advance of the privatisation of Siúicre Éireann, but it has been said that the golden share which the Minister has to protect the company against take-overs by perhaps a foreign company may not [1253] stand up under EC legislation after 1992. Nobody seems to be an expert on this issue, but, as we have found out in the past, EC legislation can overrule our legislation. I ask the Minister to say how he believes we would fare under such EC legislation. It would be disastrous if EC legislation could overrule ours.

The most important point is that the principle of quotas is preserved. It might suit us to get away from quotas in many areas, but it is vital that our 2 per cent of the beet industry is preserved. If the French can produce 30 per cent of the beet needed, the production of an extra 2 per cent would not pose any difficulties for them. They would have no problems in their climatic conditions in producing the 2 per cent extra which we produce at present. It is very important that our sugar quota is preserved. I believe farmers would like to see joint ownership of our quotas so that they would be managed by farmers, the company and the Minister. However, as we are given our quotas by Europe, it is difficult to know who has complete control over them. Nevertheless, our sugar quota is very important and it would be disastrous if anything happened to it.

I want to refer briefly to “ghost sugar”. Farmers have found that the sugar extracted from the crown of the beet, which up to now has been regarded as waste, accounts for almost 10 per cent of the sugar extracted. Farmers have not been paid for this sugar over the years because it did not seem to matter. However, with the use of advanced technology they are able to get much more sugar from the beet than they did previously. Not alone are farmers not paid for this 10 per cent of sugar but they will have to pay for it if they go into the C quota later. Farmers are not happy about this and I can understand why they may wake up at night after seeing “ghost sugar” chasing them. The privatisation of the company may not be entirely to blame for this. I will refer to this point again later.

I am not too sure what Deputy Sherlock's philosophy is on privatisation, public companies and so on. It is very [1254] important that companies are able to make a profit. My colleague, Deputy Deasy, played a leading role in giving Siúicre Éireann money when they needed it. I am sure he feels happy about this as the company is now a viable, profit-making one.

The impression has been given that everything in the company will go wrong once it is privatised. Things went wrong in the past — there were losses and many staff were made redundant. When I hear reference being made to Seán Lemass, Pádraig Pearse or Wolfe Tone in the Dáil or anywhere else I get goosepimples. People always talk about what these people would do now. We should let the dead generation rest in peace. I am sure Seán Lemass, who was a marvellous man, would have different views in 1991 to those he had in 1931. We always quote what people said but what I said last year may not be relevant to what I say this year. So far as industry is concerned, I do not think reference should be made to what was said by Seán Lemass.

As Deputy Sherlock rightly said, the Heinz effort proved to be disastrous for the food industry and a tragedy for Ireland. We have tremendous scope for producing food in this country and the food industry should have been able to prosper. I regret that that part of our food industry failed so abysmally. Perhaps the privatisation of this company will enable them to move into other sectors of the agricultural industry. I wish the company well and I should like to congratulate Mr. Chris Comerford and the chairman, Bernie Cahill, on their courage and enterprise. I hope they will be successful agus go mbeidh gach rath orthu sna blianta atá rompu.

An Leas-Cheann Comhairle: Information on James C. Tunney  Zoom on James C. Tunney  In respect of the Deputy's opening poetic licence, I notice that he did not apologise to Avoca or to Thomas Moore.

Mr. Browne: Information on John Browne  Zoom on John Browne  (Carlow-Kilkenny): I meant to apologise to the author of Moore's Melodies, but unfortunately I got carried away in the excitement of speaking in this very hallowed Chamber.

[1255]An Leas-Cheann Comhairle: Information on James C. Tunney  Zoom on James C. Tunney  The Chair is happy he gave the Deputy the opportunity of correcting that omission.

Mr. Nolan: Information on M. J. Nolan  Zoom on M. J. Nolan  I welcome the opportunity to speak on this very important legislation as far as Irish agriculture, and particularly the Sugar Company, are concerned. I want to congratulate the Minister and indeed the Minister of State for bringing forward the legislation at this time. As we enter a new and exciting phase in European history it is important that our indigenous industry should be afforded every opportunity of being put on a proper sound financial footing in order to face the exciting prospects in the new Europe.

In considering this Bill the House would do well to keep in mind a number of considerations of a general nature. The first of these is the fact that the Sugar Company have been trading successfully for almost 60 years, with their four factories at Carlow, Tuam, Thurles and Mallow. The company have a pivotal role in the Irish agriculture sector. During this time they have demonstrated a capacity for innovation and adjustment in helping to change the face of rural Ireland, and that has contributed greatly to the establishment of long term confidence in the agriculture sector.

A second consideration is that the Sugar Company down through the years have been a major employer. Apart from those employed directly they have also provided employment in the cultivation and harvesting on the farm, and in the provision of fertilisers and seed. In addition there is a major employment content in the road and rail haulage sectors involved in the transportation of sugar beet and in the processed sugar.

The third consideration is that over the years the number of occasions on which the Sugar Company returned a loss is few, in spite of having to trade in some very unfavourable economic conditions. In the past 15 years the company have embarked on a major capital investment programme. This is very evident to anybody who has recently seen the major [1256] changes in Thurles and Carlow. This programme was essential if the company were to keep pace with international competition in the sugar sector. Successive Governments have contributed towards this major investment programme by making Exchequer advances to the company in order that their debt equity ratio would remain in line with commercial norms. This investment was essential to ensure the survival of the sugar industry since the finance was required to replace obsolete machinery and to increase the production efficiency of the various factories. This rationalisation programme also saw the closure of two factories in Thurles and Tuam. The programme of investment that has taken place in Mallow and Carlow will streamline their operation and hopefully will put them in a position where they can take advantage of the new Europe.

This investment by the Exchequer in the sugar industry has raised the burden of interest charges which constituted a serious drain on the company's resources. Evidence of this turnabout can be seen from the fact that in 1980 losses in the Sugar Company amounted to £11.2 million while the corresponding figure in 1981 was £12 million whereas in the past few years there has been a return to substantial profit.

The introduction of this Bill constitutes a recognition by the Government of the central role played by the Sugar Company in the development of agriculture in Ireland over the past 60 years. It places on record the commitment of this House to fostering an ordered future for the Sugar Company. As regards farmers, they should be considered as partners in this whole new structure. I would like to compliment the Minister for the manner in which he undertook negotiations with the farmers and indeed the employees of the Sugar Company prior to the publishing of the Bill.

The Government requested consultants to investigate the correct approach to privatisation or semi-privatisation and, as was correctly pointed out in the consultant's report, the company had to make major changes to [1257] ensure their long term commercial viability. In this context I am glad to see that the company have diversified somewhat from their core operation, which is the production of sugar, by the acquisition of a 50 per cent share in Odlums Limited, and they have an option to purchase the remaining 50 per cent. It is very positive thinking by the Sugar Company to diversify, and if they are to diversify further they must be given the opportunity to do so. They have also involved themselves recently in commercial joint ventures with private companies and some of these are now up and running successfully in Thurles.

Evidence of the breakdown of the company's activities can be found in the 1989 turnover of £216 million. The sugar division accounted for £125 million or 58 per cent of total turnover. The food division accounted for £34 million or 16 per cent of turnover and the agri-trading division accounted for £57 million or 26 per cent of turnover. Employing over 1,750 people the Sugar Company are indeed a major player in the Irish agriculture industry. These figurs will increase as the Sugar Company continue their policy of acquisitions. I am glad to note that planning permission has been sought for the building of an advance factory in Tuam. This was one of the dark areas of the Sugar Company's business in the past number of years. Tuam suffered as a result of rationalisation which took place in order to streamline the industry.

Full credit should be given to the management of the Sugar Company for the turnaround in the company's fortunes in the past number of years. Tough decisions had to be taken and the results of these decision can now be seen in the performance of the company in their new improved financial position. It was indeed a team effort involving farmers, workers and the executive of the company who have succeeded in ensuring that this most important agri-industry is now in a healthy condition and is in a position to take advantage of the new opportunities which the new open Europe will offer them over the coming decades.

[1258] The Irish Exchequer had a major part to play in the new improved fortunes of the Sugar Company. The Exchequer has contributed over £59 million in equity since 1982 and the total Exchequer equity now in the company is £65.5 million. Successive Governments have played their part in ensuring the success of the Company.

When this legislation is enacted, it will enable the State to get some return for its funding of the Sugar Company. The aggressive attitude to production and marketing which has been so evident in the company over the past decade should instil confidence in the Stock Market, and I am happy that this approach will reflect itself in the price obtained when the new company go to the market.

There has been criticism of the Minister and indeed of the Government for the delay in announcing this legislation. Market commentators have stated that had the company gone to the market last year the State, through the flotation, would have suceeded in gaining much more money. However, there is no perfect time to go to the market; perhaps in a years time, commentators might say that this year would have been a better time than 1992.

One should not underestimate the problems which lie ahead for the new streamlined operation. The competition which the company will face from mainland Europe, particularly from the sugar industries in France and Italy, will be very severe. These countries have the advantage of warmer soil temperature, they can get better sugar returns from their beet crops, and Ireland, its farmers and Irish Sugar must face up to these problems. On the basis of the company's excellent performance in recent years I am confident that they can face this challenge head on and win.

Because of their size, which is relatively small compared to the large companies on mainland Europe, the company must diversify and expand their base to survive and prosper. Indeed, they should be encouraged to change because of the possible changes which may occur in the [1259] Community's sugar regime and the outcome of the GATT negotiations. It is vital for the future of the company that they continue their diversification and that the growth and development of the company will be based on a carefully planned expansion which will incorporate their existing core business and also encompass areas of business which are complementary to their existing activities. Industries such as jam-making, confectionery and allied activities should be on the new company's shopping list for acquisition because they are large users of sugar.

It is essential that the Irish Sugar Company should not be constrained or hamstrung in a way which would inhibit their growth or expansion. Opportunities are there at present — many more will emerge over the next four years — and it is important that the company should be in a position to avail of and explore these commercial opportunities. It is not practicable for the company to be totally dependent on State equity for finance to avail of these takeovers and that is the purpose of this legislation. The access to equity from the capital markets by way of a flotation on the Stock Exchange will ensure that the new company can exploit these opportunities when they become available. The flotation, and the fact that they can avail of this source of funding, will be the life-blood of the new company. I am confident that investors will welcome the opportunity to become involved with the new company and will contribute to its success by investing in it when it is launched.

The capital markets will prove to be a demanding taskmaster for the proposed new holding company, Greenvale plc., and they will demand high standards of performance from them. The track record of Irish Sugar over the past number of years will stand to them, but it will not be sufficient to ensure that future equity injections, which may be called on, will be forthcoming. Indeed, a continuous aggressive business performance is the only criteria which will be acceptable to these investors.

[1260] In regard to the participation of the workers in the new company and the background to the negotiations which took place prior to the publication of this Bill, I am glad to note that the Minister in his Second Stage speech said he would introduce on Committee Stage an amendment which will protect the rights of the workers in the area of pensions and superannuation. I cannot understand why this was omitted from the original Bill, but we must take the Minister's word that he will introduce the amendment which will satisfy the workers that it will protect their rights.

Farmers have a major part to play as the producers of the raw materials used in the manufacture of sugar. The fact that they will be afforded an opportunity to invest in the new company shows a commitment, if a commitment was needed from the farming sector, to their interest in the new company. Indeed, the workers will also be afforded an opportunity to invest in this new company; and it is important for the future of the company that a commitment in the form of shares by the producers and the employees should be in place.

There has been widespread comment on the issue of the Minister's golden share option and alarm has been expressed, particularly in the farming sector, in relation to it. From the point of view of the Minister — I must emphasise this — the farming community must be satisfied that the golden share option is everything which the Minister says it is. There are reports that European courts might be in a position to overrule the meaning and the effect of this golden share option. It is, as I understand it, a device to prevent the disposal of interests or assets in the Irish Sugar Company without the Minister's consent. I would go a step further on this proposal and ask the Minister to ensure that not just with the Minister's consent could the disposal of shares and assets take place, but that they should not take place without the consent of this House. It is not that I do not trust the Minister for Agriculture — I have the greatest trust in him — but at some future time an opportunity could develop [1261] whereby the interests of this major indigenous company could be put at risk. The safest way to deal with the matter is to ask the company to come back to this House to secure agreement for the disposal of major interests and assets in it.

The question of sugar quotas was mentioned by the Minister and there is genuine concern that the Irish sugar quota is indeed a substantial asset, not just to the Irish Sugar Company, but to the nation. Quotas, as we have become increasingly aware, are important cogs in the machinery of any agricultural economy. We have seen the effects of the milk quota and, indeed, sugar quotas are now like gold dust. I notice a recent press report that sugar beet land is making £275 per acre in some parts of Cork, proof of the extent of the profitability of sugar production and beet growing.

I congratulate the Minister on bringing forward this legislation. I ask him to look at the area of the golden share option. I am glad that he intends to introduce an amendment on Committee Stage to protect workers' rights. I hope this Bill will have a speedy passage through the House so that the company can build on the successes of recent years and go on to better things in the future.

Mr. Lowry: Information on Michael Lowry  Zoom on Michael Lowry  I welcome the opportunity to speak to this Bill which provides the Irish Sugar Company with a sound financial structure, offering the company the means to plan a viable and successful future.

Tony O'Reilly, President of the H. J. Heinz organisation and a man who was at one time central to the operations of the Irish Sugar Company, once gave a very apt illustration of mixed emotions. He said that a person would have mixed emotions if he were to watch his mother-in-law driving over a cliff in his brand new car. For me, as a representative of Fine Gael in the constituency of Tipperary north, the opportunity to speak on the Sugar Bill, 1990, is an opportunity to understand completely what is meant by mixed emotions in the context of the [1262] proposals now before the House. Tipperary north is inextricably linked with Irish Sugar, and my mixed emotions are generated by the direction in which this Bill will lead us; about the impact which Irish Sugar have had on the people whom I represent. These are the same people whose rights and aspirations are also served on the Government benches by the Minister for Agriculture and Food and who have paid a shattering price, in terms of jobs and security, by the actions of that Minister and the devastating impact he has had on the direction taken by the Sugar Company in recent years. This has been instrumental in bringing about traumatic changes in the lives of a great many people involved in, and affected by the working of this semi-State body who formed a central part of the life of the community in general.

Tipperary is the home of General Michael J. Costello and of the late Maurice Sheehy, two of the major figures in the growth and the development of the Irish Sugar Company. For more than 50 years it would have been impossible for anybody from Tipperary, and not just those involved in agriculture and tillage, to think of the Irish Sugar Company without thinking of the sugar factory in Thurles and the many people whose whole existence centred around the working of the factory and their annual beet campaign. Children were clothed and fed, houses built or bought and sons and daughters sent to college and into the world of industry and commerce all on the strength of having a father, mother, sister or brother bringing home a weekly cheque from the local sugar factory. It was a way of life, an ethos where people were important and where the man on the weighbridge was held to be as valuable as the accountant in the office.

People counted with M.J. Costello, and the affection in which he was held by the workers is a lasting testimony to the philosophy he developed and generated during his time in the industry. A great many companies in Ireland today are managed and run by executives who learned their craft and developed their skills in the Irish Sugar Company. This in [1263] itself says much about the outlook which was nurtured through successive generations in the company.

I have referred to this aspect of the background to the Irish Sugar Company not out of any sense of nostalgia or to make any attempt to turn the clock back but rather to highlight once again that in our discussions about privatisation, financing, State equity and public share-holdings we should never lose sight of the fact that the bottom line should be people. One of the great phenomena in modern Irish life is the credit union movement. It is no accident that the slogan of that very successful organisation is “People, not Profit”, a philosophy which is at the heart of the movement and which has enabled it to set the standards for all community orientated organisations. It has been proved beyond any shadow of doubt that caring for people does not necessarily mean that financial success cannot be achieved. On the contrary, it has been proved that the two can go hand in glove if the right approach is taken. However, there is a very thin line between the two and it is all too easy to overturn the philosophy and make it read “Profits, not People”.

It is my hope that the recent references in the House to the Irish Sugar Company as being the jewel in the crown of semi-State bodies were not based solely on the fact that in recent times they have been returned to profitability. We could, for instance, put that profitability in a very cruel context by saying that the number of people employed by Siúicre Éireann countrywide, at 1,700, is almost equal to the number of people on the live register for the Thurles area. That is a sobering thought and it should not be cast aside lightly.

For many years the Irish Sugar Company grappled with the problem of trying to marry the operation of a major industry with a high labour content with a commitment to maintain a high social profile with inadequate State funding. However, thanks to the nucleus of an excellent corps of executives and workers, the company survived; but on [1264] many occasions they came close to an emergency. There is no doubt that there was a need for reform, but the path towards reform was the bone of contention. Putting the gun to the heads of many semi-State bodies who found themselves in this position was the answer provided by Deputy Brian Lenihan when he was the Minister responsible. The stark choice which faced the Sugar Company was profit or closure. The board and management of the company have now carried out the mandate given to them by that Fianna Fáil administration. In fulfilling the instructions of their political masters, however, it was ironic that Chris Comerford and his management team were ridiculed and mauled, both publicly and privately, by Fianna Fáil politicians and activists throughout the length and breadth of the country.

The question which must be asked is if the price has been too high and is profitability to be the sole criterion in all future activities of this or any other semi-State organisation. Are job numbers in the Irish Sugar Company to be measured only in terms of acquisition, or will there be real jobs created? The people of Tipperary have no doubt that the price has been too high. The closure of the sugar factory in Thurles might well have been bearable had it been just a one-off incident and an isolated trauma in a sea of industrial harmony and smooth sailing, but it was not; it was the final straw which brought an over-burdened town to its knees. The latest decision was based on woolly thinking on the part of a Minister and Government who do not know what they want or how to go about getting it.

If people require evidence of lack of forward planning all they need do is look at the burgeoning Irish mushroom industry and the manner in which it has grown in recent times. It should not be forgotten that there was the basis of a splendid mushroom industry in Thurles in the not too distant past. This facility had its own compositing shed, heated growing houses and a fine canning plant, which was staffed by people who had a high level of technical expertise garnered from the food processing sector of the Irish Sugar [1265] Company. The product was right, the facilities excellent and the workers committed; but the mushroom plant in Thurles is now but a distant memory in the list of industrial accidents which have beset the area. Yet the Government are today spending millions of pounds by way of grants to aid the mushroom industry.

The Sugar Company in Thurles also had a machinery section which set new standards of engineering excellence and which gained a reputation second to none at home and abroad for the quality of their work; but they too have been consigned to the industrial museum and the skills and flair of the workers are no longer collectively available to the local community.

The story of the mushroom plant and the machinery division could be repeated in many branches of the Sugar Company around the country. The food processing section, for example, once encompassed seven factories scattered over the four provinces and involving a broad range of agri-based activities. There is now but one factory, the Erin Foods plant in Thurles, which is a major employer in the area and which has survived in its present healthy state despite many threats in the past.

It may well be asked what has this to do with a proposal to partially privatise the Irish Sugar Company. It has got to do with learning from our past experiences, looking at our past mistakes, deciding how they were caused and resolving never to repeat them. The many earth-quakes which have rattled the foundations of this great company and the failure of successive administrations to react positively to the problems which beset it during the years give us cause for concern that perhaps the lessons have not been learned. For example, I am very sceptical about some of the remarks made by the Minister for Agriculture and Food, Deputy O'Kennedy, in moving the Second Stage of the Bill on 30 January last. The Minister talks of seeking planning permission for an IDA advance factory in Tuam which will bring a new industry to the area. I quote the Minister from column 798, volume 404 of the [1266] Official Report of 30 January 1991: “The Sugar Company will contribute to the cost of this factory, in the context of their commitment to the establishment of new industries in the area following the closure of the sugar factory there”. There is not enough salt in the entire town of Tuam to help us swallow that one, over five years after the factory closed and without a single job being created in the intervening period. The Minister, more than most, knows that advance factories are nothing more and nothing less than just factories, fresh and inviting maybe, but empty nonetheless and no guarantors of jobs in the long run, as the many vacant plants around the country will testify.

This statement of the Minister has a particularly hollow ring, coming as it does from one who sanctioned the closure of the sugar factory in his own constituency of Tipperary North and who, with Shannon Development and the Sugar Company, almost managed to convince the people of the area that the closure of the factory would be in their best interests. The Minister's and the company's failure, after more than five years, to deliver on their promises to the people of Tuam and its hinterland, holds out very poor hope for the people of Thurles where the dole queue remains constant, despite claims to the contrary, and where emigration of our young people is all that prevents the same dole queue from reaching catastrophic proportions.

That is one side of the mixed emotions about which I spoke earlier. I welcome the introduction of this Bill, providing as it does the platform on which the Sugar Company may build a sound and viable economic future which will encompass all of the old values and ethics which have stood them in good stead since their foundation all those years ago. The company have a sound base from which to expand their business, with a broad network of farmer suppliers, research facilities and contacts internationally. The flotation of portion of the company's shares on the stock market will give them a financial muscle which they have lacked for too long and enable them to diversify from their core business, as they need to [1267] do in order to develop along the lines desired by their executive and their workforce.

That expansion and development must, of course, take place in tandem with the protection of existing jobs. The company cannot lose sight of their commitment to their present food division, already under threat by the recent problems with the Heinz organisation. It is now an established fact that the HeinzErin agreement on sale and marketing of Heinz products in Ireland will alter radically in 1992, at which point Erin Foods in Thurles will become purely a distributor of Heinz products, thereby suffering a 50 per cent drop in revenue, which must have a very grave impact on the overheads of the operation with consequent serious effects on jobs within the Thurles plant.

It is my contention that it is not enough for the Minister, Deputy O'Kennedy, to offer pious platitudes about hopes and aspirations for “yielding a reasonable return to the Exchequer and ensuring as far as possible the future viability of the company” unless, first and foremost, the workers of the company are given a solid commitment on job security. I make this point in relation to the direction which the company are taking on the grassland project and in their acquisition of Odlum's, events which indicate a dilution of their commitment to Erin Foods and to the job security of the workers therein.

The advantages for the development of Erin Foods in Thurles are crying out to be recognised, they are a skilled and loyal workforce and a prime location with first-class access to road and rail, situated in the heartland of a prime agricultural area. The company have a responsibility to the town of Thurles, as indeed has the Minister, and the new found status which this Bill will confer on them both, by virtue of the financial strength to be gained from the investment of shareholders' capital, will give them the giltedged opportunity to discharge that responsibility to the town and the people of Thurles, while underpinning the role which Erin Foods can play in the future [1268] health and welfare of the company as a whole.

Let the company work on their strengths, their experience in agricultural production and the skill, expertise and loyalty of their workforce. Too often in the past the company, through the ineptitude of Government, were forced to dig up the foundations of the structure, when all that was really needed was some well-thought-out renovation work. The road down which the company now propose to travel is well signposted by the failures of the past and by the warning signs which spring up from time to time, and these should not be ignored. It may well behave the company to look beyond the national boundaries for their future direction but they should not forget where their roots are. Thurles and Tipperary North are an example of the devastation that can be caused by the loss of a major employer. It is imperative that this should never be repeated.

I welcome this Bill from another viewpoint also, that it is another admission by the Fianna Fáil administration, unexpected maybe, but very real all the same, that there are good ideas on the other side of the House and that they are not ashamed to take them and claim them for their own. The notion of privatisation for the Sugar Company came from within the Fine Gael Party, based on the recognition by our members of the shackles imposed on the company by existing legislation and by successive Fianna Fáil Ministers. I am glad that the executive, admirably led by Chris Comerford, and the staff of the company now seem to be steering their ship into relatively calm waters, and I urge them to continue forging ahead but to jealously guard the most precious possession they have, the many dedicated people who make up their workforce. These workers have suffered more than their fair share of trauma in the past and may do so again in the future but they should be given cast iron assurances that their value and worth are recognised and appreciated. Maybe the slogan “People, not Profit” is too idealistic, but is there not a grain of truth [1269] there to form at least part of the future philosophy?

I wish Siúicre Éireann plc., and their proposed new holding company, Greenvale plc., the very best for the future, and I look forward to assisting and encouraging the company in channelling and directing some of their new found resources to provide viable and sustainable job opportunities for Thurles and Tipperary.

Mr. Browne: Information on John Browne  Zoom on John Browne  (Wexford): I would like to make a brief contribution to the debate on this Bill before us here today. The Irish Sugar Company over the years have had reasonable success, and different Governments have played a major role in ensuring their continued success and protecting the farmers and workers up and down the country.

The company's main activity is the processing and distribution of sugar. They have almost 100 per cent of the market for sugar in the State, 70 per cent in Northern Ireland and a small market in Great Britain from where a better market might obtain a bigger share. The number of workers in the company has reduced substantially over a number of years and I suppose the closure of the Thurles and Tuam factories has been one of the main factors in that. In the year to 30 September 1990 the company employed approximately 1,800 people and the previous year they employed about 1,500 or 1,560. The Minister told us that this was the first time in a number of years that the workforce had increased. It is good to see such an increase, but there should be potential within the company to create a substantial number of jobs in the next few years. Probably at the moment the company's base is too narrow and they must diversify into other areas. I know they are involved in Odlums, in grassland and in a few other areas, but surely a company such as the Sugar Company must have their brief to consider other areas of food-related industries both at home and abroad, to expand and develop and to create the jobs so necessary in this country at present.

[1270] With proper development and marketing strategies I believe it will be possible to do so. I contend there should be greater liaison between the Department of Agriculture and Food, particularly the horticulture section within that department under the guidance if the Minister of State, Deputy Séamus Kirk and the new holding company. I know that Deputy Deasy referred to this in his contribution, contending that there should be more involvement or liaison between the Sugar Company and the Department with a view to developing our food-related industries, particularly our horticultural and agricultural produce. Looking at vegetable growing in particular, it would appear that we can provide vegetables for part of the year but not all year around. Successive Governments and Ministers have endeavoured to achieve this year round production but have not been successful in that goal.

It is a pity we cannot produce vegetables all year around. We have a very clean environment. We hear much talk nowadays about the green industry in which we should be in a position to capitalise with our clean, pollution-free environment, the clean air we enjoy here. We should be able to develop our vegetable industry, by organic or other means, so that we can guarantee year-round supply and, more importantly, be able to export, tapping the market provided by the 320 million people within the EC where there are tremendous marketing opportunities.

There has been recent talk that the Sugar Company may become involved with the Minch Norton malting company located in Wexford, Kildare and other areas, because malting barley has tremendous potential. If the Sugar Company decide to become involved with them I am sure that could be a successful enterprise. We must remember that there are now new types of beers and beer industries developing within the EC. Malting barley remains underdeveloped and has great potential which should be exploited to the full.

The Bill before us must be examined carefully. The Minister must spell out its implications in three areas of the sugar [1271] beet industry. The first is the quota, the second the implications for Sugar Company and other workers and, lastly, farmers and producers. It is most important that under the provisions of this Bill workers retain their present working conditions and the pay, pension and superannuation rights enjoyed within the Sugar Company. In the past too often when private enterprise becomes involved the first outcome was rationalisation, in turn inevitably leading to substantial job losses. Usually management, the top brass, remained in place while workers were moved out and placed on the dole queues. It would be my hope that the Minister will assure the House that this will not be the case when the new holding company is established, because Sugar Company workers have played a major part in building up the company to its present profitable position. Any new legislation or partial privatisation proposal must ensure that workers' rights are protected.

I would also ask the Minister to examine the possibility of worker/directors being involved in the new holding company. At present there are four worker/directors on the board of the Sugar Company. It would appear that there will not be worker/directors on the board of the new holding company. That is totally unacceptable. The only way in which workers' rights can be protected is by having worker/directors on the board, sitting around the board table involved in decision-making in the future of the new holding company. Therefore, the Minister should consider tabling an amendment on Committee Stage to allow for the involvement of such worker/directors in the day-to-day operations of the new Greenvale holding company.

It is all very well to introduce a Bill and point out all of its advantages. In his introductory remarks the Minister referred to the consultants' report and the advice he had received from them. I have always been of the view that consultants will provide the type of report [1272] one seeks and that, too often such consultants differ and the relevant businesses go to the wall. I do not place great value on the type of advice they might furnish. It would be my hope that the provisions of this Bill will protect the sugar quota and the interests of workers and farmers.

This nation and the Sugar Company owe farmers, large and small, throughout this nation a great debt of gratitude. They continued to grow beet throughout even the lean years when their profits were small. They continued to fill the quota and suffered much hardship. As we are all aware, beet is a winter crop which will be affected by bad weather. We must also remember that we did not always have mechanical harvesters, thinners and other modern equipment and conveniences now available. For example, in the sixties and early seventies farmers had to harvest the beet, crown it throughout the winter, harvesting it with horse and cart, tractor and trailer and the other equipment that made for a lot of hardship. Yet farmers continued to deliver the beet so necessary to the Sugar Company, thereby protecting the sugar industry and its workers. Indeed, in many instances farmers received very little gratitude. We cannot lose sight of that debt we owe them for their dedication and commitment to the industry.

In this change over to partial privatisation of the Sugar Company it would be my hope that we will not see some individuals or companies making huge profits at the expense of farmers. I contend that any future profits must be divided fairly between farmers and the workers involved in the company — there cannot be massive profits hived off to a percentage of private interests. The whole issue of profits must be decided equitably with everybody receiving their fair share. We must remember always that the sugar beet industry is of major importance to our farmers, those in my county in particular. Farmers have expressed concern to me about the provisions of this Bill, being fearful how they will fare when it has been passed and resulting in partial privatisation.

I might point out just how important is [1273] this industry to my county of Wexford where there are 1,400 beet growers, 2,000 people directly or indirectly involved in the sugar beet industry, growers, contractors involved in the sowing of the beet, spraying, harvesting and so on. There is also the involvement of CIE workers who haul the beet to Mallow and hauliers involved in the drawing of the beet to the Carlow Sugar Company. There is a modern up-market depot in Wellington Bridge in south Wexford under the control of an efficient manager, Mr. Séamus Kelly. This depot is well run, efficient, located adjacent to the railway line allowing beet from south Wexford to be transported by rail from Wellington Bridge depot to the Mallow factory. This industry is very important to County Wexford. Neither it nor the farmers growing beet should be affected in any way. I would like an assurance from the Minister that the industry in County Wexford will not be harmed. I fear that the new partially privatised company will no longer provide a service to growers but will enter into the financial arena of profit making and people with perhaps no interest in the sugar industry will only be trying to ensure that the company make profit. That will have a serious effect on the future of the sugar industry and the farmers and workers involved.

I am baffled by how the Sugar Company operate their contract system. New contracts do not seem to be available. Young farmers are very much constrained by the quota system. I appreciate that there are limited quotas in the beet industry but a percentage of the quota should be made available to young farmers who want to diversify and get into the beet industry. Young farmers are being discriminated against in this area and I would ask if this is the right attitude to adopt. The Minister should ensure that a percentage of total contracts is made available to young farmers.

I am also concerned that in future the system of issuing contracts may change. Mallow is a long way from Wexford, and Carlow is 35 or 36 miles away, and while there may not be an official policy, I understand that the management of the [1274] Sugar Company seek to have the bulk of contracts within a 15 to 20 mile radius of the two factories operating in Mallow and Carlow. This policy would be disastrous for farmers in County Wexford and for farmers in counties far removed from the factories. The Minister when replying should guarantee that this type of selectivity of growers will not be contemplated, now or in the future because it would put a number of farmers out of business. We have heard a lot about protecting the family farm. Beet growing is one area where family farms are making a decent living. Any decisions at management level which would mean the withdrawal of contracts around the country would be disastrous for farmers. I would ask the Minister to look seriously at this.

We must retain the 200,000 tonne sugar quota. It is a prime asset. This is of such importance that it is written into the Programme for Economic and Social Progress and should be written into the Bill. It should also be written into the Bill that the Minister for Agriculture and Food is the Minister responsible. The Minister for Finance has a say, and everyone seems to have a say but the Minister for Agriculture and Food should be responsible. I appreciate that the Minister is a responsible man but he may not always be Minister for Agriculture and Food. It is important that it be written into the legislation that no change in the sugar quota can take place without the authority of this House. It should not be up to any individual Minister or the Cabinet without the approval of the Oireachtas.

The workers have expressed concern about pension rights and superannuation rights. I am glad the Minister has decided to introduce an amendment on Committee Stage to ensure that workers' rights are protected.

Farmers are concerned about the golden share option. Farmers supply the beet to the Sugar Company and they stood by the company through thick and thin. Their fears should be allayed. The safest way to protect the golden share option is to put it in the Bill that nothing [1275] can change or be redirected without the approval of the House.

I could speak at length on the Sugar Company but I note that a number of other speakers are waiting. While the Minister is moving in the right direction, I am somewhat concerned about partial privatisation and particularly about how the workers and farmers will be protected in the future. It is important that the people who have devoted so much of their energy to building up the company are not sold down the river and that the company are not allowed to cream off the profits, to sell off some of the Sugar Company or some of the quota, a policy which would have a disastrous effect on our economy in the long term.

What will happen to the money which will accrue from this part-privatisation of the company? We have heard talk about reducing the national debt with it. I am not so sure about this. While I appreciate that we have to reduce the national debt, reducing the national debt means nothing to the people out on the streets who are unemployed. Some of the money should be reinvested in the food industry, in developing new types of products whether by the Sugar Company or some other company. There are unemployment problems over and above the national average in parts of County Wexford and in the south-east. The Ministers for Finance and for Agriculture and the Government should seek to re-direct some of the money they will get from the partial privatisation of the company and direct it towards developing some of the natural resources in those counties which could create badly needed jobs.

I wish the Minister well with this new Bill and I hope he will take on board some of the points that have been raised by various speakers. At the end of the day the quota, the workers and the producing farmers should not be sold down the river in any new deals. They should be protected.

Tomás Mac Giolla: Information on Tomás MacGiolla  Zoom on Tomás MacGiolla  I agree with almost everything the previous speaker said. He is a Deputy who understands the sugar [1276] industry and the commitment of growers and workers to the development of that industry. It is particularly strong in the south-east. The Deputy is naive if he thinks that the things he asked to be protected will be protected in a privatisation Bill. The only way we can protect the jobs, conditions, pensions etc. of workers, the interests of growers, the retention of quotas and the retention of the sugar beet growing industry is by retaining this company as an efficient semi-State body which will look after these interests. Once it is privatised, free enterprise will have a free hand. They can grow or import sugar beet. They can let workers go, downgrade workers, get rid of their jobs, take on part-time or contract workers and shut down factories. That is what free enterprise is about. Surely the Deputy knows that.

I have not a lot more to say other than the basic points I have just made. It is interesting, however, to recall briefly the history of the Irish Sugar Company. A private enterprise company was set up with the assistance of the Government in 1926. They wanted to have a sugar beet industry here, so a company was established with a considerable subsidy. The subsidy was as great as the amount of money the company paid to farmers to grow the beet. By 1932 that company was struggling to the extent that they were producing 13,000 tonnes of sugar while we were importing 85,000 tonnes from Tate and Lyle, who had the market here at the time. The company was such a flop that the new Fianna Fáil Government in 1933 took it over and established a semi-State company, Comhlucht Siúicre Éireann Teoranta, the Irish Sugar Company. They had a fabulous first year when they enjoyed total support from the farmers and from the country, the Government and the people. Within the first year three factories were established and the company had more growers than they could cope with. They went from success to success. Seán Lemass, who was involved in the establishment of the company, said that it would not be a commercially viable firm and would need [1277] State assistance, but it would be of enormous benefit to farmers and of enormous value to the country as a whole. The Sugar Company has shown tremendous enterprise to the present day. They realised that farmers did not have fertilisers and lime, so the company provided them. Whatever they needed they supplied. They gave farmers contracts annually and told them well in advance how much they would get for their sugar beet. They trained them in all aspects of growing sugar beet and gave every assistance possible. They also developed methods of harvesting the sugar beet which were well in advance of those in any other country. A company was established to manufacture sugar beet harvesters which were exported to Britain and across Europe.

The list of enterprises and activities in which the Sugar Company were involved is almost endless. They were involved in golden syrup, molasses, dried molasses pulp, grassmeal, dairy nuts, horse conditioner, sugar beet seed, beet harvesters, the multi-row hoe, limestone spreaders, compound fertilisers, ground limestone, factory lime, and pre-cast concrete units for farm buildings. They were involved in every area where they could assist farmers in the development of agriculture. They were the engine of growth in the fifties and sixties. They gave stability and permanence to many thousands of farmers in the south-east, Munster and the west. Without the Sugar Company farming in Ireland would have been even more disastrous than it was in the forties, fifties and sixties. The Sugar Company had the confidence of the farmers and the people generally and as the main engine of growth for farming they showed enterprise, energy and the only innovative ideas which were emerging. There never were innovative ideas coming from the Department of Agriculture, as there are not to this day. Innovative ideas would be the last thing ever to enter their heads. The Irish Sugar Company certainly showed enterprise, growth and diversification.

It was this need for further diversification in the farming area which led [1278] the general manager of the Sugar Company, General Michael Joe Costello, to move into the vegetable processing area, which had tremendous potential and possibilities. What had been done for sugar beet growers could be done for vegetable growers by developing the same system, showing them a whole new range of vegetables and assisting them to grow them. The vision was that a processing plant would be established in almost every county. These processing plants were developed, utilising a very advanced processing system, namely, the freeze dried system, which was well ahead of anything that Heinz had. Heinz were on a downward trend, losing out worldwide, not just in Britain and Europe but even in America. They were a backward company with backward ideas.

The development of vegetable processing had quite a dramatic effect in certain areas from Skibbereen to Glencolumbcille. Everybody recalls Glencolumbcille for a series of reasons. One of the main generators of the new image, enterprise and push in Glencolumbcille at that time was the establishment of a processing plant for vegetables. Farmers in that area, no matter how small their holding, could contribute. One could be a grower and have a contract for an acre or ten acres or 100 acres of the vegetables of one's choice that one felt one, could grow and that one knew something about. The processing plant in Glencolumbcille was of major significance in developing the ideas of the people and in bringing jobs and growth and enterprise into the area. Fr. McDyer was very closely associated with the commencement of that and assisted in the development of other co-operative ideas in the whole Glencolumbcille Peninsula at that time. Many people here probably do not even know what happened in Glencolumbcille, but I can tell the House that in the sixties this was something. It gave a lift to everybody in the west and all over Ireland to see what could be done. There were new ideas and hopes straight away.

In regard to the Sugar Company, we are responsible for that and for setting up [1279] a separate company, called Erin Foods, associated with the Sugar Company in the vegetable processing area. The Fianna Fáil Government had this tremendous tradition from 1932 of developing semi-State enterprises and pushing new ideas through the Sugar Company and Bord na Móna and various other ideas which were of dramatic effect all over rural Ireland. In the sixties that same Fianna Fáil Party under Jack Lynch did not have the same vision of the potential for growth or development, of new ideas or diversification, of what to do with our farming, of how to use our resources to create new jobs and new ideas that would be economically feasible.

Here was an area that one would have thought the Government would have regarded as being exactly what they wanted, something that would bring back our emigrants who had flown out in the thirties, forties and fifties. This was a new idea, an indigenous development. Let us bring in the multinationals. There is nothing wrong with that so long as they are the icing on the cake and we are developing our own industries as well. However, the then Taoiseach, Mr. Jack Lynch and the present Taoiseach, Deputy Haughey, who was Minister for Agriculture at the time, though they may have parted company, worked closely together and their decision was to prevent this little baby from getting off the ground and to protect our current private enterprise companies, companies like Batchelors and Goodalls who were here since before the State was founded. I do not know whether they were getting anything from Batchelors or Goodalls at the time. The crazy ridiculous decision they made killed off the company before it got off the ground, because they decided to allow them to go ahead with Erin Foods but to sell only 10 per cent of their product on the home market and export 90 per cent. Imagine any budding newborn industry being told that they must export 90 per cent of their product when they are only trying to get off the ground here in their own country. That was killing it off before it got started.

[1280] Nevertheless, the Sugar Company went ahead with their enterprise, sold their 10 per cent and pushed as hard as they could into Northern Ireland and Britain to try to sell the balance of their product. Naturally, it took a few years to establish their market. In their third year in the market they had increased their exports by 300 per cent when, for various reasons which are recorded in this book Farming and the Food Industry, which was developed by one of the departments of economic affairs and The Workers' Party back in 1986 or 1987, the process by which General Costello was forced to resign and Tony O'Reilly was brought in as general manager of the Irish Sugar Company in 1966 was begun. That was just about three or four years after Erin Foods had been started and was being developed. Just when it was beginning to really get off the ground, to be really accepted in Northern Ireland and Britain and to have a possibility of overcoming this enormous obstacle of exporting 90 per cent and only selling 10 per cent on the home market, Tony O'Reilly was brought in as general manager in 1966 and his solution immediately was to bring in Heinz to take over all the sales area of Erin Foods, not alone the 90 per cent exports but even the 10 per cent on the home market. Without going too deeply into it, suffice it to say that within three years, from 1966 to 1969, from when that decision was made to bring in Heinz, the same Tony O'Reilly was shifted over to America as vice president of Heinz.

Acting Chairman (Mrs. Barnes): Information on Monica Barnes  Zoom on Monica Barnes  I would mention to Deputy Mac Giolla that it is not the practice in the House to mention people outside the House in regard to any imputation of wrong doing because we have privilege here and we must be responsible.

Tomás Mac Giolla: Information on Tomás MacGiolla  Zoom on Tomás MacGiolla  Chairman, thank you very much for your ruling; but that is an extraordinary remark, that we cannot mention anybody outside the House. I am talking about history. All I have said so far is that a man called Tony O'Reilly was brought in as general manager in [1281] place of General Costello in the Sugar Company in 1966 and that within three years, by 1969, he had gone from the Sugar Company and had become vice president of Heinz in America. That is history. I have said nothing about wrong doing. There may be an implication of it when one thinks that it is amazing that within three years that should have happened. All I am saying is that he was general manager of Heinz Erin and had left the Sugar Company within three years. I have done nothing but to give the facts of the case. If one looks at the facts one may see an imputation of wrong doing.

In any case, I think it is quite in order for people in this House to say so if they feel there has been wrong doing by somebody outside the House or inside the House. I must make this point because in the past number of years the rights of Deputies are being eroded more and more. When they raise something they are either told it is sub judice or that they cannot say this or that they cannot refer to somebody outside the House. That makes total nonsense of Deputies rights. We are supposed to have more rights in here to talk about people than we have outside the House. I would have no hesitation in saying everything I said here outside this House. What I find is that the Ceann Comhairle, the Leas-Cheann Comhairle and Chairpersons are putting more and more restrictions on people speaking here about somebody outside the House. Everything we say is about the whole outside world. There are billions of people outside. Everybody can lash Saddam Hussein forever. Is it only Irish people outside the House that we are not allowed to talk about? I think it is wrong that I should be told that I cannot say anything about somebody outside the House. That is what we are here for, particularly if we feel there has been wrong doing that we should deal with.

The main point I am making is that an opportunity existed in the sixties for a spectacular development in the Irish farming area. I said then and I still say today that we have the potential for being the greatest food processor, certainly in Europe. Before the 1987 election, the [1282] main plank of the Fianna Fáil platform in 1985 and 1986 was the number of jobs they were going to create in the food processing industry. They had great plans. We praised them at that time. I certainly praised them because this area offered the possibility for the greatest number of jobs. In talking about food processing I am not talking only of vegetable, meat or dairy processing but the development of food processing from the fish in the sea to everything that we can grow on the land. This is an area where we can create not just hundreds of jobs, but thousands and tens of thousands of jobs. I still think this can be done. Fianna Fáil also saw that this could be done and I am sure they still see that is where the potential lies. However, they made the major mistake when they came into power of putting all their goods in one basket. Fianna Fáil had the vision that Mr. Larry Goodman — I know he is outside the House — was going to be the person to make the food processing industry, which would be of tremendous benefit to the whole State. Fianna Fáil almost achieved a majority, but with the help of the Progressive Democrats they have a majority and are in power. They tried this out, but it has not worked. Private enterprise does not work that way.

The Taoiseach may have had a wonderful vision of what could happen in the food processing industry and how the beef industry could be developed so that we would not just be processing cuts for the supermarket but processing the food so that it was ready for the housewife. The Taoiseach may have had great ideas about how the dairy industry and the food processing industry could be developed. But to tell an individual in a private enterprise company that the Government will back that company to the extent of £200 million — the Taoiseach announced this at a public press conference — that the company could do the job and that is it, the vision is all gone, you are just giving a person a licence to make money and do what they feel is the right thing. They could decide to go into beef because that looks good and they can make the money [1283]— big bucks is what it is about and not that they will develop a fabulous food processing industry.

Mr. Larry Goodman had great visions not alone of taking over the whole beef processing industry, which he had almost achieved and he certainly had the monopoly in the beef processing area, and then to move in and take over the dairy industry and then indeed the sugar company, not alone the Irish Sugar Company but the British Sugar Company. This was a man with big vision but of course it has all collapsed now. I wonder, though, if it has all collapsed, and this is one of the concerns I have about this Bill to privatise the Irish Sugar Company, that it will give a free hand to an individual or to individuals.

Let us not make the mistake that this is partial privatisation, it is privatisation. As Deputy Sherlock has pointed out already, this golden share means nothing. The wording is that the Minister may, if he thinks fit, dispose of it. The Goodman Company which has now been re-established — although the banks are clamouring at their back and are ready to pounce if they make a false move — are ready to move again. Will Mr. Goodman be one of the people who will be ready to move on the Irish Sugar Company when the opportunity to privatise it comes up? What could be more horrific? The greatest irony of all would be that the great Mr. Tony O'Reilly would come back from Heinz to take over the Irish Sugar Company, of which he was once general manager until the Erin Food interest was sold out. One does not know who will come in but whoever it is he will not have the interests of the farmers, and the growers at heart. He will not be interested in assisting the farmers with fertiliser and lime or making a deal with them every year on the price. He will simply say “this is our price this year, end of story”. There will be no negotiations. He will tell them that he can only afford to pay so much and they can either grow the product or not and if they do not grow it he will not mind because he can get sugar all over the world. The world is full [1284] of sugar so there is no problem in that regard. That is the line that will be taken with growers. I cannot understand why the sugar beet growers are not paying more attention to this legislation because surely they understand how private enterprise works? This is the way it has worked in many countries throughout the world. In America it is quite clear in private enterprise contracts with growers that, if you are out of business, it is “Sorry, Bud, time to go”. That is how the market flies. They are put out of business and that is it. The growers should understand that they will have no guarantees — they will have no guarantee of how much they will be paid for their sugar beet crop or whether they will be even asked to grow it. This Bill does not guarantee that sugar beet will ever again be grown in Ireland. Private enterprise will take its raw material from the cheapest source and that will eventually happen here as well. Growers will be out of business because in another year or two sugar will probably be got from Cuba. It is already available there, and many people are anxious to get hold of it. Uncle Sam says no, but there is sugar available at cheap rates and that is how private enterprise operates.

Private enterprise will tell workers what they will pay them and no more. They will also tell workers the hours of work and conditions, and if the workers do not like it, out they go. There is no point in Deputies coming in and crying in the House that it would be terrible if this happened or that happened, if growers were not looked after and if the workers were not looked after, and that they hope the Bill will look after the interests of workers. What a load of nonsense. Do they not understand how private enterprise works and what it is all about?

The main point I want to make is that the privatisation of the Irish Sugar Company is not just like any other private sell off. It is not just an ideological issue of private enterprise versus State enterprise. It encompasses agriculture and jobs and will have a major impact on the economic future of this country. That is [1285] why I am so concerned about the legislation.

This is an example of a core development. It is an example of what could have been done in many other areas. Everybody asks why we cannot have jobs for our young people. Why are the people emigrating? They emigrated in their tens, twenty and thirty thousands in the twenties. Emigration increased in the thirties. I recall the forties when the rate of emigration was at an enormous rate and even that increased in the fifties. I watched whole families, with their big suitcases, going off on the trains at Westland Row and heading for the boat. It was the most shattering experience of my life. I thought that day was gone in the sixties when certain developments commenced, but the eighties have been just as bad — and just as tearful — although people went much faster because they travelled by plane. They felt they could come home by plane any time they wished. The problem is that it is very difficult to come home. If you are doing very well you will stay out there but if you are not doing very well you will not come home and admit it, and the worse you do the harder it is to get home. People who are stuck on the streets, as many are in London, with neither a home nor a job — hungry and homeless — will find it very hard to come home to the embarrassment of their parents, relatives and friends, apart from the fact that they cannot even get the fare.

Why do our people always have to face this horror of emigration? They have to face it because there is no industrial development. The multinationals came in the sixties. We were abused for not objecting to multinationals coming to Ireland in the sixties and the seventies. We did not object because it was essential that we would have jobs to keep our people at home, but we always said the other side of the coin was to develop our economy and our industry.

The way to develop industry is the way countries such as Norway did it. People in Ireland think Norway is a huge country with fabulous resources. Norway has far fewer resources than Ireland. It has a [1286] huge mountain range 1,000 miles long from south to north with a few little valleys here and there where crops can be grown — that is their agriculture. It has, however, a fisheries area around its coast, as we have, and on that they based their main industrial development, both their merchant and fishing fleets. Whatever mineral wealth and timber they had they developed. If you have timber you process it and finally end up manufacturing paper plus all the other processes of the timber industry. If you have minerals you have a smelter and make use of the minerals. Here Tara Mines has been taken over by a Finnish State company who themselves are running out of minerals. They have the smelters so they buy our Tara Mines for their smelters to provide jobs for their people. Parts, machines and the domestic equipment are made from our lead and zinc which they import. Out of our fabulous mineral resources we have 200 jobs, while Finland or the other smelters in Belgium, France and so on are creating thousands of jobs from our ore.

The same is true of our timber industry. Some years ago I was down in Woodfab where the general manager showed me the wood chippings that were being exported to Finland. He told me that the very boat that took out those wood chippings came back into Dublin port, five or six months later, with huge rolls of paper which we were importing.

We have a similar position in relation to food processing which should be the first and easiest area to develop industrially. Every Government have failed miserably and every Government are responsible for emigration. Yesterday I quoted from the Minister for Finance, Deputy Reynolds — he quoted what he had been told by the Government and the Taoiseach — who said that it was not the responsibility of Government to create jobs. That is the sort of thing that sickens people outside of this House. What do you mean: “It is not the responsibility of Government to create jobs”. There are 240,000 people out there who think it is the responsibility of the Government to create jobs, and there are [1287] another 120,000 emigrating because they have no jobs. That is the responsibility of the Government, and it is their responsibility to ensure that the jobs in the sugar industry and of the farmers who grow beet are protected. This Government are supposed to be the Government of the small farmers. What in heavens name have they ever done for the small farmers? It is only when the small farmer is over in London that he begins to think about that and says: “I was voting for that crowd for the last 25 years, what did they ever do for me”? That is what they are saying all the time when they have left. When they are at home they say: “I suppose they are the best”; “The Workers' Party are terrible in any case, they are against the farmers but Fianna Fáil are a nice crowd, they do not tax the big farmers”. The small farmer should never be in the tax net in any case. Because we talk about taxing the big farmers we are supposed to be antifarmer.

The State started with about 380,000 land holders; today the number is 160,000. That is fewer than half the number when the State was founded and yet every Government in this State said: “We are for the farmers.” They fight each other as to which of them is most for the farmers; who is for the big farmers and who is for the small farmers? Every one of them fought for farmers tooth and nail, but the farmers were shutting their doors and heading off to England, New York, Australia and to God knows where.

People are now being told to learn more languages, to go to Europe and go to Germany where there they are told there are jobs all over the place. We now have a very highly educated young population and it is marvellous to see them going off to Boston, Sydney, London, even to Germany and France where some of them are doing so well, but that is only about 10 per cent of the people who are being exported; the vast majority are not highly educated young people. The vast majority are over there looking for a job in an hotel, washing dishes, sweeping the streets or on [1288] building sites or whatever they can get. That is where they are working and getting jobs; yet all the possibilities are in the food processing area. I appeal again to Fianna Fáil to look at the possibilities in the food processing area. I know we are wasting our time because of the unity between the Government, Fine Gael and the Progressive Democrats on the issue of privatising the Sugar Company. I am not sure what the Labour Party position is in regard to this issue. It is important that they state their position, as the workers in the industry will want to know what it is.

It is very important that a stand be made on this proposal. Not only will it put the jobs of the workers at risk but it will also put a question mark over the future development of our processing and farming industries. As Michael Dillon said some time last year, the present number of farmers will be reduced from 150,000 to approximately 50,000 in 20 or 30 years' time and to about 10,000 in 60 years' time. The result of what is being done at present will be that small farmers will have to leave the land and it will be grabbed up by bigger farmers who will control the decisions which are made.

What is the advantage of putting the Irish Sugar Company into private hands if in 20 or 30 years' time a handful of farmers will control the land and a handful of private entrepreneurs will control industry and import their raw materials from abroad? The main flaw we see in this legislation is that no thought has been given to the social effects the privatisation of the Irish Sugar Company, will have.

The Workers' Party are opposed to the privatisation of the Sugar Company. We have constantly pointed out the number of jobs which can be created in both fisheries and agriculture by the development of our food processing industry. The development of Erin Foods gave an idea of what could be done for farmers and workers in the production of raw materials for the food processing sector.

Mr. M. Kitt: Information on Michael P. Kitt  Zoom on Michael P. Kitt  I welcome the opportunity to contribute to this debate. I [1289] should like to congratulate all those involved in the preparation of this Bill, which proposes, as the Minister said, the partial privatisation of the Sugar Company. I have no doubt that the company will go from strength to strength in the future. I wish them every success in this regard.

I have had many disagreements with the Sugar Company since I entered politics almost 16 years ago. In particular, I have disagreed with them over their decision to close the Tuam sugar factory, which affected small farmers, the workers in the factory and those involved in the haulage business in Tuam and other western areas. The brave decision made by the Sugar Company in the thirties to locate a factory in Tuam resulted in contracts to smallholders in the area to provide beet. That decision was greatly welcomed by those farmers and it led to great activity in the area. At one time over 700 people were employed in the sugar factory in Tuam. However, for various reasons — I will refer to these later — the great plans for this factory did not materialise. As Deputy Mac Giolla pointed out, Erin Foods were involved in the Tuam factory and attempts were made by the company over the years to close the factory by stealth.

I was interested to hear the Minister refer to the success of what he called the joint venture schemes. He gave as an example the creation of 180 jobs in his area by the end of 1990 through joint venture schemes and the target of 384 extra jobs by the end of 1992. I should like to know more about these schemes. Since the Tuam factory was closed in 1986 there have been no joint venture schemes in the area. It should be remembered that the factory in Tuam was closed at the end of 1986 while the Thurles factory was not closed until a year or two later.

I was glad to hear the Minister say that the Sugar Company will become involved in industrial development in Tuam. Before Christmas the Minister informed me by way of a statement that it had been agreed by the company and community groups in Tuam that the company would provide a free site and a contribution of [1290] £2 million towards the establishment of a new industry in Tuam. He said:

Last September, the company finalised details with the IDA and a private developer for the construction of a 20,000 sq. ft. advance factory on 1.5 acres of the old sugar factory site at Tuam. Siúicre Éireann have provided the site free, and have agreed to pay the cost of developing it and providing services etc. In addition, the company has undertaken to guarantee the rent for the new factory for a maximum period of three years or until a tenant is found. It is hoped to start building work on the new factory in January 1991. The company has also agreed to build a second advance factory on the old sugar factory site at Tuam. Siúicre Éireann's involvement will be on the exact same terms as those applying to the first advance factory. Building of the second advance factory will commence as soon as a tenant is found for the first one.

When the second factory has been completed and a tenant found, the company will review the situation, with particular reference to its total investment in the new projects.

In addition to the foregoing, and as part of the £2 million contribution, the company will contribute £250,000 to Action Tuam Ltd. towards the purchase and construction of an Enterprise Centre at the Weir Road, Tuam. In fact £150,000 of this contribution was, I understand, paid last month and the balance of £100,000 will be paid in May 1991.

I sincerely thank the Minister for that statement. However, I want to ask him why he made no reference in his speech in the House to this contribution of £2 million. It is worth remembering that he said in the statement that two advance factories would be built on a site provided free by Siúicre Éireann and that the company had agreed to pay the cost of developing it and providing services. While I welcome that statement, obviously advance factories are of no use unless people are working in them. I want [1291] to stress again that over 700 people were employed in the factory in Tuam at one stage. I want more employment to be created in the town. While this is beginning to happen at present, I would be much happier if the Sugar Company spelt out in more detail what they are going to do. I should like joint venture schemes such as those which have worked so well in Thurles to be approved for Tuam.

Of the £2 million only £0.25 million has been committed to be paid, leaving £1.75 million yet to be provided. The company may say they will provide the site free, develop it and pay the rent on the buildings for a maximum of three years; but I am still not satisfied that their total involvement will amount to £2 million. The Sugar Company have created those jobs in Tuam but they cannot walk away from a town with serious unemployment and emigration when they have not given details of what they propose to do in the industrial development of the town.

I would like to pay tribute to the various Ministers for Agriculture who provided equity for the company in recent years. The biggest amount of money given to the company was in 1982 when Deputy Brian Lenihan, as Minister for Agriculture, provided £30 million. Deputy Austin Deasy — I would like to pay tribute to him as he is in the House at the moment — when he was Minister in 1983 provided £20 million and in 1987 Deputy Michael O'Kennedy, as Minister for Agriculture, provided £9 million. An effort was made by successive Governments to help the company and the people working in that area. It was not only the workers in the company who benefited, but the beet growers also received an income from the industry and people got employment in the factory at Christmas for what is known as “The Campaign”, a very important period coming up to Christmas. People working in the haulage business also benefited from the industry. There was a knock-on effect for the whole town of Tuam and for the greater Tuam area.

What I find most objectionable is that in recent years this factory received many [1292] blows from the company. For example, they removed the freight and pulp subsidies and discontinued the rail link with Airgloone. All these actions succeeded in undermining the factory at Tuam.

When difficulties arose with the potato factory, the Sugar Company established Tuam Engineering. The workers in that company provided a great service for the people in the area and indeed for CSET. The engineering works are still in operation but they are under a lot of pressure at present. Before Christmas the workers there were put in an impossible position when they were asked to take a 10 per cent cut in income and to accept reduced pension and superannuation rights. Redundancies were also sought. When the Minister is considering guaranteeing the rights of workers, he should give some thought to Tuam Engineering. An investigation should be undertaken as to why the engineering works are not getting sufficient work from the Sugar Company.

I was very happy to hear the Minister talk about the general restructuring of the food industry in Europe and the increased numbers of mergers and acquisitions. Even though the Irish food companies will never be as big as those in the US or Europe, I believe they can succeed. They have shown a great willingness to come together and provide for development. In the Connacht region the three co-operatives, Midwest, Kiltoghert and the North Connacht Farmers have come together as one and pooled their resources in the dairy sector. Next Monday the Minister for Agriculture will launch a new low fat dairy butter spread in Sligo for that co-operative. I hope this development will continue in other areas.

We have had in this House for many years a committee to oversee the semi-State sector, the Joint Committee on Commercial State-sponsored Bodies. That is a very important committee to which I would refer in commenting on the Sugar Company and their disengagement from Tuam and Thurles. That committee recommended that there would be no question of closing the sugar factory in Tuam until alternative employment was provided, but that did not happen.

[1293] Deputy Mac Giolla referred to the fact that the Goodman group were grant-aided with a number of projects throughout the country, the first of which was to be in Tuam where 70 jobs would be provided with an investment of £14 million. I regret that did not happen, but we cannot blame one individual. We now have to find alternative employment. The IDA are trying to do that in places like Tuam and Thurles and I hope they succeed. What now remains on the Tuam Factory site are the Tuam Engineering Works, sugar packaging and animal feeds. The Minister has provided in the Bill that the workers there will be guaranteed their pension and superannuation rights and I am happy about that; but, as I have said, what I am not happy about is that the engineering works are not getting enough work from the company.

I regret that, as happens in a lot of semi-State bodies, what is called voluntary redundancy turns out to be compulsory redundancy. This matter has arisen in the past few weeks with regard to An Post, who want to shed 1,500 jobs. It arose also in Bord na Móna and in the Sugar Company. Voluntary redundancy is offered until a certain date — usually not enough time is given — and as soon as that date passes the employees are told they will have to accept statutory redundancy. I hope the Minister will put down an amendment on Committee Stage to guarantee the rights of workers on and after the transfer date. Employees will not suffer less favourable terms in relation to their pensions or superannuation scheme after the transfer date.

While I welcome the Bill, I am very critical of the Sugar Company in relation to the factory in Tuam. I can never understand why, over the years, the question of cost penalty was always raised in regard to Tuam and Thurles. As I understand it, these costs were allocated by head office to smaller factories in the scheme. It is most unfortunate that that phrase was introduced and, even though the Sugar Company are going well, it was the closure of two factories which led to their healthy financial position. We could [1294] probably close all the sugar factories in Ireland if the cost penalty was too high and import sugar from Cuba — or from wherever it is plentiful — but that is not the way to proceed in future. I hope, when partial privatisation takes place, that the company will grow. I congratulate them for turning their finances around, but they were at fault in the way they treated Tuam.

We have problems in regard to emigration and unemployment and people who worked in and were taught skills by the Sugar Company are setting up small industries. However, I hope that we will now have a forward looking and successful company in the years ahead.

Mr. Bradford: Information on Paul Bradford  Zoom on Paul Bradford  As I come from the Mallow area, this legislation is of great importance to me. Indeed it is vital that the legislation, which I am sure will be put through the House over the next number of weeks, will provide a sound and secure base in future for the Sugar Company.

We are very fortunate in Mallow to have one of the two remaining sugar factories in the country. I heard the criticisms this morning regarding what happened — it might be more accurate to say what has not happened — since the closure of the factories in Thurles and Tuam. It is vital that the measures which the Minister intends to bring forward will ensure the strengthening of our two factories. In the Mallow area, the Irish Sugar Company play a vital economic role, indeed it is one of the major economic planks of the north Cork area. Many hundreds of families are dependent on it for permanent and seasonal employment and farmers depend on it as a source of income.

In recent times the agricultural area in north Cork has, in a sense, been hit by the forced rationalisation of a certain number of co-operatives. As a result of this and the formation of one of the new super co-operatives — Kerrygold Co-operative — a number of workers, unfortunately, will be laid off; as a result of quota cutbacks in milk, farmers' options will be reduced. Because of these two factors it is vital that [1295] our other major agri-industry in north Cork, the Sugar Company, will continue to thrive and prosper and, as a result of this legislation have their future secured.

Deputy Deasy made the initial reply on behalf of Fine Gael last month and he outlined our views and fears. He said that the Minister is not going far enough to direct the Sugar Company into new options and openings. Like my colleague, Deputy Deasy, I welcome this legislation but it is not the be-all and end-all as far as the Sugar Company are concerned. We need from the Minister — which we did not get in his Second Stage speech — a clear policy statement and direction for the company which, I hope, will lead to the company being a leader in the vegetable industry. It is important that the Greenvale Company — as they will be called — play a role as a leading vegetable processor and, through that, bring about a major increase in the number of people working in this area.

The reason the legislation is before us is that the Irish Sugar Company urgently need funds to survive and prepare for the challenges of 1992, to prepare for the changes after 1992, to prepare for the challenges which will certainly emerge as a result of the GATT proposals and the liberalisation of trade after the GATT talks. If this funding is to be made available there is really no other option. If we were living in an ideal world, if the Irish taxpayer was willing — or able — to pay more than at present, it would perhaps be more pleasant all round if the Government continued to fund the Sugar Company. Unfortunately, we do not live in an ideal world and the sort of funding which may have been available in the seventies and eighties is no longer available. Because of that, we must look at this in a realistic light and at the options for funding in relation to the Sugar Company. When all is said and done, when the debate has been concluded, it will be seen that the Minister's option is the correct one.

When I was a Member of the Seanad I served on the Oireachtas Joint Committee on State-Sponsored Bodies and [1296] one of the bodies which the committee examined was the Sugar Company. During the many interviews we had with Sugar Company personnel on our visits to plants throughout the country and the many hours of discussion on the whole question of the Irish Sugar Company's future, most members of the committee were convinced that the future of the company lay in some form of partial privatisation.

When the legislation was introduced a month or so ago, the Minister outlined the three options which faced him, or indeed any Minister for Agriculture and Food. The first option, which was to leave things as they were, might work for the next two or three years but, unfortunately, it would not be adequate post-1992 and GATT. When the taxpayer is unable, through the Government, to put extra funding into the company, it is not a realistic option. The second option was the total privatisation of the Sugar Company and indeed it is not long since there appeared to be a strong possibility that a major player in the food industry was a serious option as far as total privatisation was concerned. That major player has diminished somewhat but, apart from that, I hope that total privatisation was not considered as a serious option. The third option, which we are debating and which will obviously be put into practice, is partial privatisation. It is a reasonable and positive step forward and it will ensure that the Sugar Company will be viable long into the nineties. It will ensure that the company can grow, prosper and continue not just to maintain employment but to create it in other areas. It will mean that the company can continue to be a major source of income for the farming community.

People in the Sugar Company are, naturally, worried about their jobs and others have attempted to spread scare tactics throughout the industry. The biggest threat to jobs would come if we did not act. Their jobs will be under threat if everybody decides not to do anything in the hope——

Mr. Sherlock: Information on Joe Sherlock  Zoom on Joe Sherlock  We should give the [1297] people of Mallow a copy of the Deputy's speech.

Mr. Bradford: Information on Paul Bradford  Zoom on Paul Bradford  My constructive contribution would prove far more interesting for the workers in Mallow than the negative and unrealistic rubbish uttered by the Deputy this morning.

Mr. Deasy: Information on Austin Deasy  Zoom on Austin Deasy  Deputy Sherlock has insulted the intelligence of the people of that area.

Mr. Bradford: Information on Paul Bradford  Zoom on Paul Bradford  The vast majority of the workers and managers of the Irish Sugar Company are realistic enough to know that the ideas being promoted by Deputy Sherlock in 1991 are out of date and are being discarded in all those countries in Europe where they were accepted. It is ironic that the economic system which Deputy Sherlock and his party are trying to foist on us has been rejected by its proponents and that his former political friends and allies in Eastern Europe have realised that what we are proposing, partial privatisation, is the only way forward.

Mr. Deasy: Information on Austin Deasy  Zoom on Austin Deasy  Including Albania.

Mr. Bradford: Information on Paul Bradford  Zoom on Paul Bradford  It is important, as the countries of Eastern Europe move towards democracy, that we in this country do not take a backward step.

Mr. Sherlock: Information on Joe Sherlock  Zoom on Joe Sherlock  Will the sugar quota be guaranteed?

Mr. Bradford: Information on Paul Bradford  Zoom on Paul Bradford  As I said, the threat to the jobs of the workforce will be far greater if the Government or the Oireachtas decide to do nothing and just hope for the best. There is not just a duty but a responsibility on us to face up to the difficulties confronting the Sugar Company and to bring forward realistic proposals. What has been put forward is a step in the right direction and I am glad therefore to support it.

Some Deputies have questioned whether the introduction of the golden share will ensure that the Sugar Company will remain in the control of Irish hands. I am confident that both the Minister and [1298] the Oireachtas will ensure that it will. It has been pointed out that any changes would require the approval of the Minister, but I appeal to him to introduce an amendment on Committee Stage that any such changes would require the approval of the Oireachtas.

Earlier I mentioned that there is a possibility of extra jobs being created in the vegetable and horticulture industry following the passage of this legislation. It is my hope that Greenvale plc will become the market leader so far as the processing of vegetables is concerned. I am glad that the Minister of State with responsibility for horticulture is present in the House to listen to my remarks. I think he would be the first to admit that, despite the efforts of the Minister for Agriculture and Food and his predecessors, the food and vegetable sector has not been developed in the way it should and that we are not providing many options in this sector for farmers and growers. I hope, however, that the passing of this legislation will lead to them being given more options at a time when there are severe cutbacks in other sectors. That is the reason I feel that not only are we taking a step forward so far as the Sugar Company are concerned but, more importantly, a step forward so far as the food and vegetable sector are concerned. Greenvale plc will play a major role in the food processing sector in the years ahead and can become a major employer.

It is also important that the workers in the Sugar Company be given a cast iron guarantee in this legislation that their pension rights will be maintained. I urge the Minister, when replying to the debate, to reassure us in that regard.

I would also like to know what the Minister's views are on the question of worker directors. These were involved in the board when major and difficult decisions had to be taken, some of which they may not have agreed with, but they lived up to their responsibilities in a very mature and far-seeing way. Having regard to the fact that they played such an important role in the development of the company in recent years, I hope the Minister will give a commitment that they [1299] will be allowed to play a role on the new board of Greenvale plc.

Is it the Minister's intention that the growers would also be represented on the board of the new company? They wish to make their views known and would like to see many changes made. Their views should be brought to the attention of the board and because of this I feel they should be represented on the board.

Section 2 of the Bill deals with the sale of shares in the new company. I am glad that both workers and growers will be given the opportunity to buy shares and I hope they will take up this option. I have no doubt but that they will base their decisions on what the long term future will hold for the company. Shared-ownership should lead to more mature decision making at all levels of the company. I would certainly encourage both workers and farmers to take out shares and to continue to play a major part in the running of the company.

There are approximately 5,000 sugar beet growers in the country. Their association have informed us that they have two main concerns, the first of which relates to the management of the Irish sugar quota. They have asked that there be co-management of the quota. This is a very reasonable request and would guarantee that any decisions on the sale and distribution of the quota would only be made after full consultation with all interested parties. I support this request. Even though the figure represents only 2 per cent of the total European Community quota, it is of vital importance to the 5,000 growers who would otherwise have very few options. It is therefore in their interest that we strive to maintain the quota at its present level.

The quota system as at present construed offers little hope or opportunity for new growers to enter the sugar beet field. As a public representative I have been inundated with requests from people who wish to obtain a sugar beet quota and, unfortunately, there is very little I or any public representative can do for them. I feel that young trained farmers who have completed their Green [1300] Certificate in Agriculture, have perhaps obtained a farm installation grant and are fully fledged farmers in every sense of the term, fully prepared to meet the challenges of the nineties which farming offers, deserve whatever priority can be given when we allocate quota. These young people are up to date and au fait with all the new technologies of farming, all the new machinery and all the challenges and they should have some sort of priority when we allocate what quotas we can from time to time. I hope new opportunities will be available in the farming field for our younger farmers.

The second major concern of the growers and their representatives is payment for sugar beet as it is at present. My colleague, Deputy Browne, mentioned the term “ghost” sugar this morning. That, I believe, is a semi-technical term. Most farmers I know in the sugar beet industry always feel they are not receiving their full and just entitlement in payment. This problem remains with us after many years and it comes up for debate annually. When we are setting out on a new road and when we are beginning to set up a new company, we must address once and for all and bring to a conclusion this question of the payment system. Not only must the payment be fair; more important, it must be seen to be fair. I hope the new board and the new organisation will ensure fair payment for beet to farmers so they can at least be contented that they are getting an adequate reward for their labours in this respect. The Minister might like to comment on that in his reply.

As I said at the start, overall I welcome the proposal. It is a positive move as far as the Irish Sugar Company, the farmers and the workers are concerned. Let me repeat my one little doubt that the Minister in a sense is not laying out a clear policy statement for the future of the Sugar Company and the vegetable industry. I hope he will reflect on that over the next few months and that in the long term we will see the Irish Sugar Company being a major employer and a major producer of wealth in rural Ireland and that there will be many related industries in [1301] the food and vegetable industry doing likewise.

Mr. M. Ahern: Information on Michael Ahern  Zoom on Michael Ahern  It gives me great pleasure to speak on this Bill. Since I reached the age of reason I remember reading Beet It, a production by the Sugar Company which told us what was happening in the company, and I found it very interesting. The Sugar Company have been of vital importance to the rural community since the thirties, especially in Cork east. We have a factory based in Mallow and thousands of farmers supplying beet. Also we had two vegetable factories, Erin Foods in Midleton and Erin Foods in Mallow, both of which were closed down by the Sugar Company; but I will come to those later.

Mr. Sherlock: Information on Joe Sherlock  Zoom on Joe Sherlock  The Government also.

Mr. M. Ahern: Information on Michael Ahern  Zoom on Michael Ahern  The sugar beet crop is the most profitable tillage crop, as far as I am aware at this moment; so it is very important for farmers and all involved, whether they are agricultural contractors, hauliers, workers in the factory or farmers producing beet, that this industry be kept in operation at its present rate. I suppose the price some farmers are complaining about, as Deputy Bradford said in his excellent contribution, would be for the supply of over quota beet. That causes some concern, but I suppose if a person is paid for his quota there can be little crib if he gets something for what he is supplying over and above one quota and putting a glut into the market. They are getting the full price at quota level and, depending on the year and the demand, the over quota supply varies.

One of the main concerns employers have relates to the control of the quota and who will be responsible for its distribution after Greenvale plc have been set up. It is vital that the control lies in the hands of the company, the suppliers and the Government. A varied number of institutions should be involved in controlling the quota. The problem is that if you have only one institution responsible they may make decisions in their own interest only. As happens generally, that [1302] institution are the company and they do not take into account the workers and suppliers in making their decisions. Therefore, it is vital that all the elements involved in this industry have a say in the control of the quota.

It is important that farmers and workers take advantage of section 2 of the Bill and purchase shares on the flotation. When they have a financial holding in the company as well as an interest in earning their living out of it, they will take an interest in how the management of the company operate. Therefore, I urge farmers and workers to purchase shares when these become available.

Concern for the rights of the workers has rightly been expressed, and I must say the statement by the Minister, Deputy O'Kennedy, should allay worries in this field. What he said in his speech regarding the workers' rights is worth repeating, and I quote from the Official Report, volume 404, column 803, 30 January, 1991:

The position is that workers' interests are already protected under the European Communities — safeguarding of employees' rights on transfer of undertaking — Regulations, 1989. However, in order to reassure workers on this point I intend moving, on Committee Stage, an amendment underlying the rights of employees. This will provide specifically that the rights which employees of Siúicre Éireann, or its subsidiaries, hold before the date on which the Minister for Finance transfers his shares in Siúicre Éireann to the new holding company will continue to be held by them on and from that transfer date. Provision will also be made to ensure that employees will not suffer any less favourable terms under their pension or superannuation schemes, after that transfer date...

...Siúicre Éireann has indicated to ICTU a willingness to confirm formally a number of commitments, in writing, [1303] relating to employees' conditions subsequent to the restructuring of the company.

These commitments are worth repeating and are as follows:

no interruption in continuity of employment; current rates of pay and conditions of employment will continue to apply; continued recognition of existing trade unions; and existing procedures for determining rates of pay and conditions of employment including redundancy terms, will continue to apply.

He said that the company were willing to register these commitments in the Labour Court and with the new Labour Relations Commission.

Debate adjourned.


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