Ceisteanna—Question. Oral Answers. - Milk Cessation Scheme.


asked the Minister for Agriculture and Food if he will ensure that any over-supply of milk in the milk cessation scheme is retained for distribution among developing milk farmers in the west of Ireland.


asked the Minister for Agriculture and Food when it is proposed to announce the 11.3 million gallon milk cessation scheme; and if unsuccessful applicants for the previous scheme will be considered when they reapply.


asked the Minister for Agriculture and Food if, in view of the fact that the milk cessation scheme has been oversubscribed and there are many farmers with quotas still anxious to cease milk production he will introduce a scheme for young farmers who are anxious to purchase the unwanted quota; and if he will fix a price to safeguard these farmers.


asked the Minister for Agriculture and Food the plans he has for the redistribution of the surplus milk offered under the EC milk cessation scheme to those in need of a quota increase.


asked the Minister for Agriculture and Food if he will use the excess milk offered during the recent cessation scheme for restructuring quotas in cases of inadequate or non-existent quotas where existing dairy farmers are not among those now given priority for a permanent quota.

I propose to take Questions Nos. 4, 9, 14, 23 and 42 together.

The Community milk cessation scheme was established to buy up 2 per cent of the national quota, approximately 22.6 million gallons with effect from 1 April 1987 and a further 1 per cent, about 11.3 million gallons, from 1 April 1988. The quotas bought up are abolished and are not available for re-distribution. Under the scheme producers receive compensation payments at the rate of approximately 23 pence per gallon over seven years in return for the surrender of their quotas and their undertaking to cease milk production. The first stage of the scheme to obtain the 2 per cent reduction has been completed. The scheme was well oversubscribed with the total applied for amounting to 44.4 million gallons or almost double the 22.6 million gallons required to achieve the 2 per cent restriction in quotas. Under the Community regulations at present the excess milk can be brought up only if the State makes the compensation payments to the producers who are surrendering their quotas.

No Exchequer funds are available to buy up the excess milk offered under the cessation scheme and the industry is not prepared to provide funds for such a scheme unless it can operate so that there is no loss of quota from one co-op or dairy to another. This is not at present allowed under the Community regulations.

In response to Irish requests the EC Commission brought forward some time ago a proposal to amend the regulations which would enable new entrants and other special category farmers to purchase permanent quotas available within their co-operative areas as a result of other producers ceasing production. As a result of a decision by the Court of Justice of the Community certain legal difficulties have arisen in regard to this proposal and the matter is now being examined further by the Commission. My Department have recently discussed the legal problem with the Commission and I am hopeful of a satisfactory outcome.

The arrangements for the second stage of the cessation scheme under which a further 11.3 million gallons of milk are to be bought have not yet been finalised. I will be making an announcement in the matter shortly.

Does the Minister not accept that there is a golden opportunity here with applications for 22 million gallons of surplus milk and that every effort must be made to ensure that arrangements are made so that the 22 million gallons can be made available to those in need? Even if there are legal or financial problems surely it is not beyond the competence of the Minister to enter into discussions with the co-ops, the financial institutions, the farming organisations and the EC so as to overcome those financial and legal problems. Does he not accept that that is the challenge he must face in relation to those 22 million gallons of milk and that every effort must now be made to set up such a procedure?

I accept that the matter is one of considerable importance and that every attention must be given to it. The Deputy will be aware from the reply I have given that the first stage of the scheme terminates today. I regret that. It might have been possible, had extensions been sought in advance, to perhaps extend the first stage of the scheme but that did not prove feasible in the time available to me. Any extension of the date would have been required to have been notified a considerable time ago, certainly not since the change of administration. I am sorry that in the time available to me it was not possible to have the first stage date extended. I wish it were possible. However, I assure the Deputy that I will take account of all he has mentioned. I am anxious to ensure, as I am sure Deputies on all sides of the House are, too, that we maximise as much as possible the productive capacity of those who would wish to opt into the scheme to take up what is being made available by those who opt out of the scheme. That is my priority as I know it is the priority of those who put down the question. I very much regret that, as the scheme terminates its first stage today, it is beyond the bounds of my capacity or authority as Minister for Agriculture to have it extended.

Is the Minister aware that the applicants for the first scheme were selected on a lottery system and that a number of disappointed unsuccessful applicants now hope that their application will be considered in the 11.3 million gallon milk scheme? Is it possible that they can be facilitated?

I want to give every priority to those who made application for surplus milk under the first scheme and who were unsuccessful. I will give every priority to them in consideration of the second stage in particular having regard to their productive capacity. That is what we all want to achieve in the national interest. The Commission had clearly indicated well in advance to the previous administration what the time limit was and how it must be applied. I was bound by that and I had no opportunity of changing what might have been changed earlier. I wish I had that opportunity.

My concern is for young farmers who are at present producing milk and who are anxious to increase their quota. This quota is available for people who were not successful in their application for the cessation scheme. Will the Minister make arrangements to release the quota and in doing so put a price on the gallon of milk? If it became freely available, large farmers would outbid smaller farmers. There is still a place for the small family farm in the dairy industry. I think the Minister will agree that if we are to raise cattle numbers——

Deputy Boylan is now embarking on a speech.

——this is a means of doing so. It is a very serious matter.

I hope this does not sound too partisan but can I ask Deputies opposite in particular to accept that it is beyond the bounds of reason to expect me to achieve in just one week what my predecessors in the outgoing administration failed to achieve in three years? Can I be allowed a little time to try to make up for what was not done, having regard to the attention we had to give to the budget, to the Council meeting which I attended for the last two days and to other matters? I assure the House that I will give the kind of attention to this issue that was not given to it during the past three years.

That is unfair.

This is ridiculous.

Does the Minister envisage, now that he has all the time on his hands that he has not had for the last two or three weeks, the commencement of a national cessation scheme involving the co-ops to look after the people whom Deputy Boylan mentioned? Has the Minister decided the procedure with regard to failed applicants? Will people at the top of the current list have to apply again for the cessation scheme towards the end of the year or will the present applications that are in the Department be sufficient for the extra 1 per cent? I would not like to think the Minister can come in here and say there was a bad job done by the previous Minister for Agriculture with regard to this scheme.

I am sorry if what I have to say does not appeal to the Deputy. I am stating facts.

The Minister is arrogant.

I am aware that there are hardship cases. There are cases where productive capacity can be used, not just to the advantage of the individual but to the advantage of the co-op and the national economy. I should be very anxious to receive information from any Deputies in respect of hardship cases and would hope we would be able to demonstrate by our examination of such cases that we will give them favourable consideration. We shall have enough time now over the next 12 months to do it. I hope that we shall do it. Any Deputies with submissions to make can be assured that I will have the matter examined with extreme urgency.

Would the Minister agree that we will never have milk offered to us again as cheaply as at the moment at 23p a gallon for seven years? Will he guarantee the House that he will hold on to the excess milk offered under the cessation scheme until he has a restructuring package in place, to allow the younger and perhaps more efficient farmers who have indicated their willingness to stay in milk production to get a permanent quota or extra quota where that is needed, rather than return the excess milk offered during the cessation scheme to those dairy farmers who have indicated their unwillingness to continue?

Would he also agree that he must concentrate production in areas of greatest natural advantage and thereby concentrate it in the areas where we have efficient producers? Has he any plans to revise the distribution of the national quota bearing that in mind, and to allow extra quotas to the areas and the co-ops where there is a demand for production and there is efficient production in terms of cow numbers, rather than concentrating it in the areas where obviously the land and other factors militate against efficient dairy production? The greatest demand for the cessation scheme came from the areas where there is not a natural advantage for milk production.

As the Deputy will be aware, the national quota has already been determined. We have to accept that as a fact, and that quota was determined during the period of the previous administration.

With excellent results.

Deputy Doyle who asked the question does not seem to regard it as being an excellent result. That is a matter for argument. I am very anxious to ensure within that framework that we use our quotas to the advantage of the efficient producer but also to maintain and support family farm income in all areas. It would be appropriate for me to say that our only criteria will be those who produce most efficiently in the milk belts, if you call them that. We must take account, quite properly, as mentioned by the European Commissioner, of the social aspects of agriculture, particularly in our country. I want to ensure that a fair balance is struck in respect of the more severely handicapped areas of the west generally. We hope that the decisions we take will encourage maximum production in every respect within the existing quotas that have been determined.

I call Deputy Ned O'Keeffe.

On a point of order, my first question was not answered.

The Chair has no control over that, Deputy.

I asked the Minister would he ensure that the excess milk under the milk cessation scheme would not be handed back until a restructuring package was in order.

I am anxious to ensure that no milk will be handed back. Whether on information, or ACOT advice, or otherwise, I would be very anxious to ensure that. I regret the fact that up to now, perhaps without benefit of full advice, so many applied for inclusion in milk cessation who might be better advised to operate under other arrangements such as leasing. I am very anxious to ensure that we minimise the amount of milk handed back and maximise the productive capacity.

Would the Minister agree to the setting up of a national milk pool? Secondly, would he exempt all farmers with up to 30,000 gallons quota from any reduction in their quota and would he bring some order into the sale of quotas which are now making the ridiculously high price of 25p to 30p per gallon, militating against the small producers who are unable to pay this price? Would he agree that the large dairies and people in the manufacturing business are allowing only larger farmers to get their quotas, which militates against the smaller producers. We will see a cartel of large producers if the present system continues to the disadvantage of rural Ireland.

The Deputy has raised some specific matters which are important. I shall be very glad to consider these matters. The Deputy has a separate question down and I shall deal with the matters raised in respect of that question. I shall certainly take account of some of the comments he made about our management of this issue.

I call Deputy Hegarty.

A Ceann Comhairle, one Supplementary Question——

I called Deputy Hegarty. I shall facilitate the Deputy.

I have noticed within the last number of weeks that a certain amount of rigidity has crept into this scheme with regard to cessation. I have specific instances of this. I am glad to note that the Minister mentioned the word "flexibility". There is at the moment this extraordinary anomaly whereby one farmer decides to apply for the milk cessation scheme and for one reason or other changes his mind and finds that he cannot opt out, whereas in the very same co-op area somebody who applies is told that there is an over-supply. In that case can these anomalies be rectified within a specific co-op area?

I regret that the Deputy has identified a certain rigidity. I have to admit that it was there because of the time scale to which I have already referred, which is regrettable. People should have been notified months in advance, clearly and constantly, of the implications of what they were doing in applying for inclusion. Unfortunately——

On a point of order, that is not the point I was making. The people were well aware, but they made a mistake in applying and subsequently changed their minds. For one reason or other, they want to pull out of the scheme and cannot. Yet in that small co-op area there are people anxious to get in who cannot. Surely there must be a way out of this problem.

Of course. I hope that, in the manner in which we manage this matter for the next time, we shall be able to demonstrate that there is a way out.

This time.

Unfortunately, the dates are closed. I have said that about five times. There is no possibility——

Surely the Commission have permission.

Unfortunately, nothing can be done now. I want to assure the House — and I think we should leave it at this — with regard to those who in a sense are locked in and those who wished to opt in and could not get in, that we will give full consideration to the cases mentioned in the House. I very much regret the situation but we cannot do this now.

Now that the system has been changed from the first milk cessation scheme, which seriously discriminated against Connacht-Ulster and which caused a substantial outflow of milk into Connacht-Munster, and now that the milk is to be left within the catchment areas and can be utilised there, would the Minister disregard completely the appeal by Deputy Doyle who, in the typical Fine Gael philosophy, was looking after Munster-Connacht and asking the Minister to forget the west and the other poorer regions.

Munster and Connacht?

The west and the north west will not be forgotten.

I call Deputy Sherlock.

I should like to ask the Minister——

Whereas the north west were over-producing by millions of gallons over the cessation scheme——

Order, order. I call Deputy Sherlock.

——we were finding it very difficult——

Deputy Sherlock is in possession.

Is the Minister aware that a number of people, particularly in the North Cork area where there are 35 such people, had milk quotas unjustly assessed while the herds were tied up in 1982? At present such people are thinking of taking legal action. Would the Minister agree that such people should be given a priority in the redistribution of any milk quotas which may become available?

I shall certainly give special consideration to these cases as the Deputy requests.

I have a problem, as I do not think I will be able to get back to my priority question.

No, it is not being taken with this one.

May I establish it clearly from the Minister: will we have restructuring in respect of the surplus offered——

A question, please.

That was the first part of the question. The second part is: would the Minister outline his plans for achieving such restructuring in respect of the surplus?

I understand that the outgoing Government were considering restructuring for the past three or four years and were not able to come to any conclusion. Now the Deputy is asking me if I will outline my plans, after a few weeks in office. I want to assure the Deputy that I will give urgent consideration to a proper restructuring of this issue.

It means the Minister will not restore the allocation until we have a restructured package.

It means the Minister has no plans.

Is the Minister aware that a sizeable number of farmers applied under the provisions of the milk cessation scheme at a time when the quotas were being purchased at 14p per gallon.? Unfortunately those applications were not sent to the Department but rather withheld by the creameries because they were hoping to become involved in the distribution of this quota. As a result, when the price increased to 22p per gallon those applications were submitted but many were late and many farmers who had applied, say in October, have been omitted because their applications were not forwarded by the relevant creameries. What plans has the Minister to deal with those people? Furthermore, would he agree that the reallocation of the additional 22 million gallons applied for was held up because of legal difficulties with the Commission? Did he not inform the House, when he answered the question, that discussions were in train with the Commission in regard to these legal difficulties?

Yes, of course I accept that there are legal difficulties which must be solved but I think some of these matters might have been addressed earlier. I am not aware of the detail to which the Deputy referred in the first part of his question. I would have to say it is a matter that would cause me considerable concern. If the Deputy or any other Deputy who has information of that nature would furnish it to me, we shall certainly pursue the matter further and take it into account in administering the second part of the scheme.