Dáil Éireann debate -
Tuesday, 14 May 1985

Vol. 358 No. 5

Adjournment Debate. - Milk Price.

Mr. J. Walsh

I thank the Chair for allowing me to raise this matter on the Adjournment. With the permission of the Chair I should like to share my time with Deputy Noonan.

I raise this matter on the Adjournment because of the recent trend in the dairy industry of flouting the Dairy Produce Act, 1924, and in particular in respect of section 32. That section states as follows:

(1) The Minister may by order make regulations for all or any of the following purposes, that is to say:

(a) requiring that the calculation of the price to be paid for all milk and cream supplied to any premises to which the regulations apply shall be made on the basis of the percentage of butter-fat or other prescribed constituent contained in the milk or cream.

Adherence to that section is nothing more or less than what I am demanding. I regard the trend of payment on a flat rate basis as a retrograde step because it pays no attention to the content of solids in the milk which, at the end of the day, is the only portion of the milk that matters.

The present situation has no regard for the improvement of breeding programmes or the management of dairy herds. There is no incentive for the farmer to improve his breed or to feed cattle at a higher level of intake. It is most inappropriate now to allow this flat rate system to continue because of the constraints of the super-levy.

We have been hearing about the problems of the super-levy for the past 12 months and tonight the Minister is trying to recover some lost ground in Brussels. With the constraints of the super-levy and the threshold beyond which we cannot go it would be appropriate to avail of the increase we are allowed on the constituents of milk. We are allowed an annual increase of 0.06 per cent in butter-fat and an unlimited increase in protein. If there is a constraint on volume, why not go for an increase in constituents? However, the Department say they are not interested in the solids content of milk, that they are not interested in enforcing the Act. Illegal practices are allowed to occur, namely, payment by volume. When a farmer takes the white liquid to the creamery or to the co-op he will be paid the same price as the farmer who takes the same volume of milk but containing a much higher fat and a higher protein percentage.

It is appropriate that the Minister of State should be present in the House tonight because he has promoted the testing and recording of milk at farmer level through the milk records co-op. Now, an increasing number of the more efficient farmers are getting a print-out not alone of the yield and volume of milk but also of the fat, protein and solids. One section of the Department are encouraging farmers to produce milk with a high solids content and it is incomprehensible to find another section of the Department allowing the co-operatives to pay for milk on a flat rate basis, taking no account of solids.

The flat rate price is unfair to the farmer who is working hard to improve his dairy herd and the constituents in the milk he is supplying. It is also unfair to the processors. They are told every day they should diversify from traditional products and get into the higher revenue, more sophisticated products. Products such as cream liqueurs have been trotted out as an example of the way the industry should go. How can the industry go in that direction if the Department who are responsible for implementing the regulations are allowing those regulations to be flouted in regard to the payment for milk? Surely it is in the interests of processing plants and co-operatives to get milk that contains the highest possible levels of fat, protein and lactose. I am asking not only for this section of the Act to be implemented but I am also asking the Minister to make an order or a regulation extending the payments system to protein or lactose so that the entire solids in milk will be covered.

No doubt the excuse will be given that a review body in the Department are looking into the matter and that the whole question is being considered. Those old excuses are no good. It is about time we gave up considering matters and having review bodies. All those excuses have run out. We are in the EC. We are competing with countries such as The Netherlands and Denmark who are showing us the way. They are paying their farmers 104 per cent of the target price for milk but, on the other hand, we are paying on average only 85 per cent to our farmers. The major reason for our small price to the farming community is the low butter-fat, protein and lactose content in milk.

In the price negotiations in recent years the level of protein is weighted as more important than butter-fat. We have here an opportunity to increase the incomes of farmers by availing of the increases allowed on butter-fat and protein, thus allowing them to compete with the other dairying industries in the Community. I am calling on the Minister to enforce the Act and, as a matter of urgency, he should extend the section to cover payment in respect of protein and lactose.

Mr. Noonan

(Limerick West): I am glad to have the opportunity of supporting Deputy J. Walsh. One could say that the time is now overdue to consider again the Dairy Produce Act, 1924, with particular reference to section 32. It is important to repeat what Deputy Walsh has stated. The purpose of that section of that Act is to pay for milk on the basis of butter-fat content and other prescribed constituents. It is clear that the provisions of this section are daily being flouted and that the Minister and his Department are allowing this illegal situation to continue and develop. Surely that section of that Act should either be enforced or repealed. The current situation is ridiculous and nothing short of a farce.

If the Minister and his Department are interested in building up a strong, well bred dairying herd here, then butter fat and protein testing is imperative. The farmer should be paid on the solid contents of his milk, including protein, butter fat and lactose. I say protein also deliberately because we should be moving in that direction. I am glad to note that some dairy co-operatives are already paying on protein content of milk in addition to the butter fat content.

It might be as well to remind the Minister that there is before the House at present a Bill for the control of bulls for breeding, whose purpose is to improve and maintain the quality of Irish cattle. In the absence of proper butter fat and protein testing how can the AI stations and other people carrying out progeny testing ensure that the best breeds are provided? The Department should enforce standards to ensure that the quality of our dairy cattle is of the best. If this trend continues the quality of our dairy breeds will be adversely affected; there is no doubt about that.

We hear time and time again of the importance of agriculture to our economy, that it accounts for upwards of one-third of our total exports. The time is long overdue to take a long hard look at the situation developing with regard to our dairy produce. As Deputy J. Walsh rightly pointed out, we are now being asked by the consumer to diversify into other areas of production. Yet an illegal situation is allowed by the Department to obtain under which the provisions of the 1924 Dairy Produce Act are being flouted. I know the Minister will advance all sorts of excuses but I contend that where there is the will there is the way. As a man of integrity, of considerable knowledge in this area, I am sure the Minister of State will see the injustice of the situation and that he will take the necessary action immediately before any further damage is done.

Because of the importance of the dairying industry to our economy it is essential that overall national interests be considered. In this instance I fear they are not being considered or safeguarded. We are mainly an exporting country. Therefore, in regard to not alone the dairy sector but the whole cattle industry it is essential that the standard of our breeding stock be maintained and the only way this can be done is through a proper system of testing of solids in milk.

I might reiterate that the law is being broken daily and, for some reason unknown to all of us, the Department appear to be taking no action. I know that the penalties are totally out of date, not in keeping with present day trends. The time is well overdue for action to be taken to update the law. Surely it is not that complicated to introduce legislation ensuring that the necessary penalties for breaches of the provisions of the Act are in keeping with present day costs. I hope as a result of this motion that the Minister will extend the provisions of the 1924 Dairy Produce Act to allow for modern, automated methods of testing of milk for butter fat, protein and lactose. Therefore we appeal to the Minister to do something immediately.

Minister of State at the Department of Agriculture (Mr. Hegarty)

I should like to thank Deputies for two very sincere contributions. I certainly approve of that type of contribution.

In this speech on the Estimates for Agriculture on Friday last the Minister himself pointed out that the Dairy Produce Act, 1924, was in need of updating, that a special group had already been set up in the Department to review the position in consultation with representatives of the Irish Dairy Council — a body representative of the various interests in the dairying industry — and the farming organisations.

Any change in the basis for the calculation of the price to be paid for milk and cream supplied to registered creameries will be one element of the package. It is intended also to introduce a number of other technological and production provisions, in the revised legislation, to take account of the changes which have take place in the dairy industry over the past 60 years and the varying demands. We are aware that some milk purchasers are not complying with the present legislation. I certainly would not condone that type of activity. As Deputy Noonan pointed out, the penalties of £10 and £20 are a joke and are not effective. I agree that the legislation must be updated to ensure that the interests of the dairy sector are properly safeguarded. I will do my utmost to ensure that the legislation is expedited.

One must not overlook the position of the producers in this regard. They must bear in mind their own particular requirements and their trading arrangements with their co-operatives. Farmer's representatives have a role to play and it is in their interests to ensure that payment is based on proper standards and that the price paid is related to the appropriate level of protein or butter fat content. As things stand at the moment the legislation does not help much in preventing the application of a flat rate price and consequently we must amend it and bring the penalties up to a more realistic level if we are to ensure better prices for protein and butter fat content.

Under the super-levy quota system testing for butter fat to establish individual and purchaser average fat levels will be mandatory and penalties for non-compliance with this requirement will be pitched at a more realistic level than those at present prescribed in the 1924 Dairy Produce Act. In relation to the quality of our herds, I appreciate the points made. The people in the business of producing milk, with the guidance of their co-op managers, have been producing the type of cow needed for the product eminently well. I do not see any dramatic change in that area. For instance, in the liquid milk area one might have thought that we would be going for more gallons long ago. The extraordinary thing was that the people supplying liquid milk produced some of the best quality milk. I agree with the Deputies and I give a commitment here that the updating of the legislation will be a matter of priority.

The Dáil adjourned at 9 p.m. until 10.30 a.m. on Wednesday, 15 May 1985.