I should like to thank the Chair for giving me an opportunity to speak on this topical and important subject. I intend dividing my time between my colleagues, Deputies Noonan and Joe Walsh. The milk super-levy introduced here last year by the Minister for Agriculture has had disastrous effects on our agricultural industry. It has set off a chain of events which will affect almost every farm enterprise. The acceptance of the milk quota in the first instance has laid the foundations and made it easy for other quotas to follow. The super-levy quota has left in its wake many difficulties. The levy was to have been imposed on milk in excess of an increase of 4.6 per cent. The deal was hailed as outstanding by the Minister and the Government on the Minister's return from Europe.
Adjournment Debate. - Milk Production.
And by the farming organisations.
But they could not count.
That is correct. Later we discovered that the Minister had presented incorrect figures to the EC.
Inaccurate.
They were incorrect and the result was that the quota was dropped to 3.5 per cent. I did not hear any hurrah from the farming organisations about that. That error on the Minister's part has caused great confusion and anxiety in farming and co-op circles. Farmers, in the first instance, had to make a late change when the levy was imposed but were asked to change again at a stage when it was almost impossible for them to do so. That was the last straw. As yet the Minister had not come clean about his mistake. He has threatened all sorts of action if the EC do not give the 4.6 per cent, but those threats have a hollow ring. We recall the Taoiseach, and the Minister, promising to block the super-levy even if they had to resort to the tactic of using the veto. We all know what happened. The cockup, as it became known, in the presentation of our figures has damaged our credibility in Europe and left farmers not knowing where they stand.
Last week the Farmers Journal carried an article under the heading, “Big Co-ops Back in Super-Levy Net”, and I should like to quote part of it:
An upsurge in milk production during February seems likely to push all the large Co-ops into the super-levy net. Together, the big six could be facing a super-levy bill of £3½ million.
Farmers could be penalised by 18p to 30p on each gallon over quota. Many co-ops are now advising farmers to feed whole milk to calves to reduce the super-levy bill.
Weekly milk intake during February is up by seven to eight per cent on February 1983.
The Minister is obliged to tell the farmers what the precise position is. He is obliged to pay the farmers to the tune of 4.6 per cent. Farmers cannot be penalised for a blunder made on this question. There are small producers with low quotas and new entrants with no quotas. Those people had plans prepared by the Department of Agriculture and they were encouraged by the Department. In co-operation with the banks and the ACC they have prepared plans for a six year period. They were encouraged by the Minister but they now find themselves without a milk quota. They have embarked upon an enterprise from which there is no turn back. What is the position in regard to them?
There are farmers with diseased herds with small quotas and young farmers in training for dairy enterprises. Those people have been completely ignored. They cannot compete for quotas. In fact the farmers who need an increased milk quota most are those who can least afford the change. The Minister should immediately introduce controls on the sale or lease of quotas. Such quotas should be freed from the land on which they were produced. Farmers discontinuing production should make their quotas available to a centralised body made up of co-ops and other interests. Each co-op should determine a list of priorities based on the groups I mentioned.
The milk cessation scheme clearly demonstrated the willingness of farmers to move out of milk because the scheme was oversubscribed by between ten million and 17 million gallons of milk. However, because of the Minister's failure to act on milk quota mobility the cessation scheme has failed. It is seen as being more profitable and flexible by farmers either to lease or sell such quotas. The Department, undoubtedly, is a disaster area under the stewardship of the Minister. His blunders, misleading statements and failure to recognise the real problem has caused great difficulty. It is sad for me to say that for the first time in the history of farming in County Wexford farmers are forced to go to the South Eastern Health Board for assistance. Agriculture is the base from which our economy can recover and it is time the Minister recognised that.
(Limerick West): I support Deputy Byrne's views. Our party have called for a debate in the House on the super-levy episode. We want the position with regard to the levy clarified. Will it be 4.65 per cent or 3.5 per cent over 1983 figures? The dairy industry is in a state of confusion. The Department of Agriculture, under the Minister, is in a state of confusion. There is not leadership. European Council meetings in recent years were a disaster for Irish farmers. The Taoiseach has been humiliated on many occassions. He told us that the super-levy negotiations were the most important that ever went before the Council of Ministers, but they turned out to be a disaster for us. We are aware that there is no joy for anybody in this pathetic position.
Over the past number of years an item of vital national importance has been dismissed as unnecessary in so far as the Council of Ministers and particularly the Commission are concerned. There is no need for me to reiterate the unique importance of milk production to the Irish economy. It has been stated as representing something in the region of 9 per cent of our gross national product. It is the basis of the whole Agricultural sector. Other European countries have almost maximised their milk production, but we said two and a half years ago, when the super-levy issue came up for discussion, that we needed time to develop and reach the average of our European partners. The Minister, unfortunately, was not prepared to allow that time.
It was in order that night.
(Limerick West): The milk super-levy has allowed other European countries to develop with comparative ease——
Limerick West):——but it has kept the Irish farmer in a state of under-development, and that has been done under the present Government and Minister. The expansion of the most profitable agricultural enterprise and the manufacturing and processing superstructures will be completely blocked as a result of this approach by the Government. We do not know at this stage what the final outcome will be, but we do know that the pass has been sold by the Minister. I want to remind him of his speech at last year's Fine Gael Ard Fheis.
He delivered.
(Limerick West): Some very clear and very public commitments were made at the Fine Gael Ard Fheis by the Minister for Agriculture, as follows:
We are not going to accept the proposals from the Commission on milk. We are going to get a derogation.
What did the Minister get?
He got a derogation.
(Limerick West): He did not. He could not even get his sums correct and the Irish dairy farmer knows that.
(Limerick West): The farmers in County Clare and west Cork know that.
Deputy Sheehan, please.
The Government could not count the Bailieboro quota. They made a dog's dinner of it.
(Limerick West): I want to quote what the Taoiseach said at that Ard Fheis:
For my own part, I have already started to take advantage of the friendly and influential contacts I have made during my period as Minister for Foreign Affairs.
Does he call that a friendly contact? I certainly do not.
The only country to get an exemption was Ireland.
(Limerick West): We know the situation. That surely shows the lack of knowledge of Deputy Carey. He should know that Greece got a far greater derogation, a far greater exemption than we got. That applied to Belgium also.
Except that Greece does not produce milk.
(Limerick West): This is a very limited debate and I am going to give some time to my colleague, Deputy Joe Walsh. As Deputy Byrne rightly pointed out, the whole dairying industry is in a state of total confusion. Our farmers so not know what their quota will be, whether they are going to be allowed to increase it by 4.6 per cent, 5 per cent or 3.5 per cent. The Minister cannot give an answer one way or the other. This is a sad occasion and I want to re-emphasise that the pass has been sold by the Minister to his partners in Europe.
I thank the Chair for facilitating us. I want to say a few words in support of a number of categories of farmer, in particular new entrants to dairying. It is running very late in the day in the current super-levy year which ends on 31 March. These unfortunate farmers, of whom there must be at least a few thousand, have no quotas whatsoever. It is now the first week of March and I would appeal to the Minister to formulate a scheme. I know that he and his Department have been meeting ICOS and other farming organisations. There is no use in spending the whole year talking about it; a scheme needs to be formulated.
The other category of farmers are those in severe financial difficulty. They are badly off enough with the discontinuation of the rescue package, but to have no quotas or inadequate quotas to meet repayments is absolutely disgraceful.
I am afraid that time is also running out for farmers in the diseased herds category because the closing date for the milk cessation scheme offered to the Minister's Department was 10 December. It is now 6 March and we still have not obtained an allocation of milk under that scheme. In fact, the original allocation of 17 million gallons has been whittled down now to 3.9 million gallons. There is not half enough to go around. I cannot understand how it took from 10 December to 6 March to allocate that milk. Some have withdrawn from the scheme and others who were producing milk have used up their quotas. We are now told that in the next super-levy year these unfortunate farmers could get some allocation. I am very much afraid that some will not be able to survive until then.
The point has been made that the new entrants to farming have their farm plans drawn up, they have their five year programmes and their commitments to meet. In all fairness to them, at this stage of the game it is only right to give them a scheme which would give them some opportunity of making a living. The scheme proposed by the ICMSA is one which would not cost the Department anything. It would regulate leasing. Surely it is not beyond the bounds of ingenuity that the Department of Agriculture and the ICOS representing creameries around the country could get together to formulate a scheme to distribute milk from those who want to cease milk production. They have demonstrated this wish because they have offered 17 million gallons to the Department to distribute to those who want it. At this late stage the Minister should set about doing this straightaway, in the interests of a national dairy industry.
I should like to know what is going to become of the 3,500,000 gallons of milk set aside for those who sold milk directly to consumers? I understand that included in that amount are at least one million gallons which have no home to go to. Surely as a start that could be divided out to people who want and are seeking a quota? The outflow of milk from certain co-operative areas will prove pretty disastrous for large sections of the dairying industry if there is not some kind of control over the outflow of milk from one co-operative to another. Anybody in the dairying industry in the southern part of the country who has his ear to the ground will know that some co-operatives are in dire danger of being out of business if there is no control of outflow of milk between the co-operatives.
These are some of the points that I should like to make in support of the resolution: That the Minister immediately formulate a scheme to distribute milk to new entrants to farmers in severe financial difficulties and those with disease breakdown.
The Minister to reply and he has ten minutes.
I thank God for Deputies like Deputy Joe Walsh, who have a constructive attitude towards debates in the Dáil.
Deputies
Hear, hear.
He has raised many pertinent points, in direct contrast to the mumbo jumbo which preceded his contribution.
He knows what he is talking about.
I wish I could answer all the points raised by Deputy Walsh.
Typical personalised rubbish from the Fine Gael Party. The Minister should spend more time helping the farmers and giving less criticism.
The Minister should not be interrupted.
What, no interrupting? What about the Caliban twins?
That was not interruption by the Minister.
Nocturnal grunts.
The crown prince himself in motion, perpetual motion — hands, legs, mouth, the whole lot.
There is nobody better at nocturnal grunting.
Deputy Walsh made a number of pertinent points. It is not possible to answer all of them. We still have considerable problems in working out the system. Deputy Walsh and other responsible people appreciate that. Our deal on the super-levy is acknowledged throughout Europe as being about the best negotiating deal in agriculture while we have been a member of the European Community.
That is a load of crap.
(Limerick West): The Minister should tell us about the Irish farmers.
That is appreciated in Britain, Northern Ireland, France and the other countries. If Deputies go to County Fermanagh or any of the Six Counties they will find that dairy farmers had to take a reduction in milk output of 13 per cent this year in comparison with 1983.
(Limerick West): Tell us about the Irish farmers.
Fermanagh farmers are Irish farmers.
That was a colossal set back to them. Our deal in Europe last March was quite exceptional and was seen as such throughout Britain, Northern Ireland and Europe.
The efforts which I have made since coming into office to facilitate the development of the Irish dairy industry have, of course, been of benefit to all in the dairy industry, especially small scale producers. The interests of the dairy industry have been foremost in my mind each year in the negotiations in Brussels in regard to agricultural prices and these have, of course, resulted in significant benefits for all Irish dairy producers but more especially small scale producers.
The concession we won on the super-levy was of fundamental importance to the industry in allowing for further expansion beyond 1983 delivery levels. In dividing out our national milk quota I decided to give more favourable treatment to small producers throughout the country. The allocation to co-operatives and dairies gave a disproportionate increase to suppliers with deliveries of less than 14,000 gallons. This was equivalent to setting aside for small farmers about ten million gallons out of the extra 50 million gallons available to us above 1983 deliveries and then dividing the remaining 40 million gallons among all producers.
I felt that the gain of an extra allocation was much more important to the smaller farmers than the loss of some potential quota for bigger farmers. Many small farmers are also benefiting from the arrangements that I introduced under the milk cessation scheme whereby £5 million Exchequer funds is being made available to free quotas that can be reallocated to special category producers whose deliveries in 1983 were affected by animal disease and other exceptional situations that had to be compulsorily catered for under the Community regulations.
The Community regulations do not provide for special treatment for new entrants. I decided, however, that producers who began milk production between January 1983 and May 1984 should be specially catered for. I stipulated that special additional allocations should be given to them each year out of the flexi milk that becomes available within the co-op area. The distribution by co-ops of the flexi milk available for re-allocation to new entrants and farmers with heavy investments in dairying must be carried out up to a combined limit of 1 per cent of the co-op's total quota. I would have preferred to have been able to allocate these additional quotas permanently but the EC Commission ruled that permanent reallocation cannot be made on the basis of reduced deliveries by other producers. While the new entrants can have no guarantee that the quantity of flexi milk available for them this year will also be available next year, I would hope that they will be able to obtain additional quotas in future years as well.
As Deputies know, we provided £5 million from Exchequer funds in the milk cessation scheme to buy up quotas for redistribution to those categories — mainly farmers with animal disease problems — that must, under Community regulations, be compulsorily catered for through a national reserve. This scheme was heavily oversubscribed by producers wishing to cease milk production and give up their quotas. The total number of applications amounted to a gallonage in the region of 17 million. This has been reduced by withdrawals and up to date figures indicate that about three million gallons have been withdrawn. People were entitled to do that up to a certain date.
Because of the heavy response and because also that the flexi milk available may not be sufficient to meet all the demands upon it, I have suggested to the co-operatives that they consider providing the finance to buy up the quotas of the remaining applicants so that we can expand the national reserve to give additional help to new entrants and heavily borrowed dairy farmers. A working group comprising co-op representatives and officials of my Department have been examining how such a scheme might operate and I understand that there is to be a meeting of all the co-ops to discuss this matter next week. While I would not wish to prejudge their decision I understand that the response to date from co-operatives has been encouraging. In the meetings I had with them I noted that their attitude was positive to that request.
I also had published last week-end a notice in regard to leasing and selling of lands indicating the vigilant controls the Department would be operating to ensure that only bona fide land transactions would take place and that there would be no bogus leasing or selling of quotas. This should help new entrants as it will have the effect of preventing the pool of flexi milk within co-op areas being reduced unnecessarily and thereby affecting the prospects of new entrants and heavily invested producers of securing additional quotas.
These then are some of the ways in which I have been trying to cater for new entrants and other producers with special problems within the constraints that the quota system imposes on us. I am prepared to look at other ways in which the super-levy system might be improved and to this end I am arranging for consultations between Department officials and representatives of the farming and cooperative organisations later this month. I would point out, however, that I do not have a great deal of flexibility in this matter and many suggestions made to me for dealing with super-levy difficulties are not feasible as they are in direct conflict with the Community regulations.
I am terribly concerned that new entrants and dairy farmers in severe financial difficulties should be catered for. When the farming organisations came to me about eight or nine months ago seeking a pool of milk for people with particular problems, they sought a total of £5 million over a period of five years. Within two weeks I provided that £5 million. It caters for seven million gallons of milk. As I pointed out, the total response to the scheme was that people applied to the extent of 17 million gallons which is now reduced to 14 million gallons. I expect that seven million gallons will look after all the people who had disease problems since 1981. That seven million gallons will cater for those and will also cater for people who had serious illnesses in the family which inhibited their ability to produce milk.
I want to sound a note of caution. In recent times certain creameries or co-operatives had many people applying under the cessation scheme and we had a corresponding flood of doctors' certificates accompanying applications for extra milk. This indicates that there is some sharp practice in operation and that certain co-ops do not want to lose any milk. If they are to lose it due to people partaking in the cessation scheme, the powers that be in certain co-ops want to see that they get it back and they are trying to get it back through sharp practice and on the pretence that there was a serious illness problem when there may not have been such at all. Of course there are genuine cases but it would appear to me that there are also many bogus cases.
In certain co-op areas sufficient flexi milk has become available to cater for all the problems that arise. Enough flexi milk has become available to cater for disease problems, for illness problems, for new entrants and for people in financial difficulties. One of the major co-ops told me they have 5 per cent flexi milk available in the current market year. If we had even a fraction of that all over the place, we would have sufficient to cater for all the cases which have been raised in this debate.
An Leas Cheann Comhairle
The time is up.
The precedent is that we are allowed a question. If a small farmer got an allotment from the Land Commission of land which was not used for dairying purposes, what is his position if he is in dairying as regards extra milk?
The exception I make is for a person who entered into dairying between January 1983 and May 1984.
This is a small farmer. He has a herd and he has a quota already. He gets land from the Land Commission, say 30 acres. That land was not used for dairying purposes before.
He will have to depend on the availability of flexi milk within the cooperative.
The Dáil adjourned at 9.05 p.m. until 10.30 a.m. on Thursday, 7 March 1985.