Ceisteanna — Questions. Oral Answers. - EC Milk Agreement.

9.

asked the Minister for Agriculture and Food the average price increase paid to farmers last year for milk primarily arising out of the December 1986 EC agreement; and if he has satisfied himself that the bulk of the benefits arising from this agreement are passed on to farmers.

The agreement on milk reached by Council in December 1986 dealt mainly with reduction in milk quotas and with the suspension of intervention for butter and skimmed milk powder. The new arrangements for intervention were agreed in detail in March 1987 and included a provision that in implementing those arrangements account would be taken of the special importance of intervention to Ireland. I have ensured that this provision has been respected in practice.

It is not possible to quantify precisely the effect of these agreements on producer prices for milk as other factors, such as improved commercial market conditions and overall economic environment, must also be taken into account. However, it appears that producer prices increased by between 4 and 5 pence per gallon in 1987. The actual levels of price are a matter for those involved in the industry.

The Minister mentions the improvement in the market being principally due to buoyancy because of the reduction of stocks. That together with the green pound devaluation, should have led to an increase somewhere in the region of 10p or 11p per gallon, but as pointed out, it has been only an increase of something like 4p or 5p a gallon. It would seem that farmers are being shortchanged to the extent of 5p or 6p a gallon. Is the Minister doing anything to see that that shortfall is being made up?

I do not think that even the farm organisations would use the figure the Deputy uses. The Deputy will appreciate that it is not a matter for the Minister of the day to intervene between the co-operatives, their shareholders and suppliers. Secondly, while I do not want to engage in argument on this matter, it may be that the co-operatives who are in constant consultation with their suppliers and shareholders, may have reasons as to why every penny of the increase coming to them was not passed on to the producer. There are overheads, losses from previous years and other matters that they have to cover. It is not for me to intervene. The fact that the Deputy has raised the matter here will perhaps result in highlighting the issue. Incidentally during normal discussions with the farm organisations they have never requested me to make representations to the dairy co-operatives because they are well capable of doing that themselves.

I can well understand that the co-operatives may not want to pass on the full price increase which developed as a result of the stronger market. They are probably entitled to retain some of it. Nevertheless, as much as 5p a gallon is involved and nationally that would come to a total somewhere in the region of £50 million to £55 million being lost to the farming community. That is a very considerable amount, if that is true. It can be corroborated to some extent because of the huge difference being paid for milk by some co-operatives. Obviously, there is some uisce faoi thalamh on this matter.

Bainne faoi thalamh.

Some co-operatives are paying 3p or 4p a gallon more than others.

The Deputy particularly, as former Minister, will appreciate that the Department have no function at all in setting prices for creamery milk. Secondly, the fact that someone of his status and experience raised the matter publicly may give rise to further discussion. There has been buoyancy in prices in the whole dairy sector this year over last year, which I welcome. Incidentally, some of this is attributable to efforts made by the Deputy himself as Minister in 1986.

I thank the Minister very much.

Equally it was implemented by me as a result of certain regulations I introduced.

The Minister was just lucky. He came along at the right time.

I have managed to have re-introduced the whole scheme of aid for the dairy sector and the co-operatives. I hope that the new efficiency which will come through the grants available from FEOGA will mean that the maximum possible profit will be earned and passed on to the producer.

Is the Minister condoning the withholding by the co-operatives of the 5p or 6p a gallon from the farming community throughout the country? The Minister did say that it was up to the co-operatives, that they had overheads and all the rest. The facts are that the co-operatives have not been passing on the due amount to the farmers over the last year. Does the Minister not feel he has a duty to ask the co-operatives to pay this amount won by the previous Government, as the Minister said himself?

I did not say that either.

It is only right that the Minister should give the kudos to those who deserve it.

(Interruptions.)

I am not condoning anything. Do not put words in my mouth.