asked the Minister for Agriculture and Food if his attention has been drawn to the difficulties being experienced by small milk producers who want to increase their quotas at enormous cost under the restructuring scheme.
21.
Ceisteanna — Questions. Oral Answers. - Milk Quotas.
5.
asked the Minister for Agriculture and Food if he will outline the proposals, if any, he has for the redistribution of milk quotas; and if he will make a statement on the matter.
23.
asked the Minister for Agriculture and Food if he intends to allow temporary leasing on milk quotas on a one year basis in 1989.
24.
asked the Minister for Agriculture and Food if he will reconsider his decision not to allow the leasing of milk quotas; if his attention has been drawn to the hardship being caused to the large number of farmers who are anxious to increase their milk production to give themselves a reasonable family income to meet their commitments but who are not in a position to purchase milk quotas at this point in time; and if he will make a statement on the matter.
I propose to take Questions Nos. 5, 21, 23 and 24 together.
The reports I have received indicate that there has been a very good response to the quota restructuring scheme which I negotiated as part of last year's EC price fixing package. The only apparent difficulty seems to be that in some areas the demand made by producers seeking to buy additional quotas exceeded the supply of quotas available for sale. Under the terms of the scheme I arranged that in those circumstances smaller scale producers would have priority access to the quotas available. Priority has also been given to other producers with special difficulties such as farmers with animal disease problems.
Smaller scale producers will, of course, now also have the opportunity of having priority access to quotas available under the temporary leasing scheme at a maximum cost of 15p per gallon for 1988-89. This is the first year in which Community regulations allowed such a scheme to be operated.
Under the terms of the scheme leases must be drawn up and completed by 31 July 1988 and the period of the lease will expire on 31 March 1989. The portion of a producer's quota to be leased cannot exceed a limit of 70 per cent of his quota, except in the case of a producer whose herd was depopulated under the disease (TB and Brucellosis) eradication schemes in either 1987 or in 1988, prior to 31 July, where the portion permitted to be leased will be increased to 99 per cent. Payments made for the leased quota shall not be more than 15p for each gallon leased.
Quotas offered for leasing will form a pool in each co-operative or dairy area and at least 60 per cent of this pool will be allocated to suppliers whose quotas do not exceed 25,000 gallons.
Taken together with the restructuring scheme, the temporary leasing scheme represents the first real attempt to make the quota arrangements more flexible mainly in the interests of the special category farmers. I have asked the Quota Review Group to advise on how this process of introducing flexibility into the arrangements can be intensified in future years and I will, of course, take full account of the group's view in future decisions.
I have received representations from a number of small scale producers and it would appear that it is out of the reach of small scale producers to purchase additional quotas. If they are going to survive in agriculture we should try to encourage them to go into milk as it is the only viable area for small scale producers. An industrial worker would be paid a minimum wage but it is not possible for a farmer to make a living from a quota of between 5,000 gallons and 10,000 gallons.
I am anxious to facilitate the Deputy but we must proceed by way of supplementary questions.
Can the Minister tell us if anything can be done to alleviate this problem?
I have particular concern for small scale producers. All of the schemes I have introduced since becoming Minister have one characteristic — priority is given to young farmers and small scale producers. The Deputy will be aware that special priority is being given to small scale producers in each of the schemes which I have announced, including the restructuring scheme and the leasing scheme which I have just announced. I believe this should have been done four years ago. Prior to my taking action it was the power of the cheque book which determined whether a person would be able to purchase a quota. I have now intervened and both the small scale producer and the young farmer can feel protected. As a result of my actions, while it is not the same in all cases, the price per gallon is now as low as 75p. It varies. I can assure the House that it will remain a priority of mine to ensure that in all schemes priority will be given to young farmers and small scale producers. Over time I think the price will come down even more.
I wish to ask the Minister two brief supplementary questions. The Minister referred to suppliers whose quotas do not exceed 25,000 gallons. Does this mean that the previous reference to a 10,000 gallon quota for young farmers coming into agriculture has now been eliminated? In 1982 farmers found their quotas cut as a result of disease and I asked previously that special attention be given to these farmers. Can the Minister tell us whether they are being given this attention?
I agree with what the Deputy has said. Those farmers who were unlucky to find their quotas cut as a result of disease in the period in question are being given priority in these schemes. Secondly, in relation to the Deputy's question in regard to a quota of 10,000 gallons for young farmers I can tell him that there has been no change. Young farmers are being given priority in the restructuring scheme, in the fleximilk scheme and now in this leasing scheme along with the small scale producers with a quota of less than 25,000 gallons. The actions which we are taking belatedly — not our fault; I wish they had been taken previously — are having the desired effect and I hope that over a period of two to three years the price will come down and access to quotas for young farmers and small scale producers will be improved.
A Cheann Comhairle——
I am sorry, Deputy, but I am calling Deputy Deenihan. I am calling first Deputies who have tabled questions on this subject matter.
Can the Minister tell us whether those farmers who have entered into leasing agreements would now be able to break these agreements to avail of a one year leasing agreement?
Obviously, I cannot intervene in legal obligations which have been entered into. If leasing agreements have been entered into they would still stand. I have asked the Quota Review Committee, which represents all the farming organisations, Macra na Feirme and ICOS, to make short-term urgent recommendations on temporary leasing agreements. They have now done so. Temporary leasing is one matter and long term leasing is another, but I cannot intervene in legal obligations which have been entered into.
The ideal would be to have a minimum quota. Can the Minister tell us whether there is any evidence to suggest that small scale producers are getting out of milk?
There is some evidence of this. When this restriction was introduced in 1984 — and I was no more involved then than the Deputy is now — it had an effect on small scale producers both in this country and in Europe. What I have being trying to do over the last 12 months is to minimise the damage of this decision, which was taken before I became Minister, on small scale producers and young farmers. I believe we are doing that. Secondly, we are trying to minimise the damage so as to ensure we will come through this quota regime better than other countries in Europe, and I believe we are doing that also.
Is the Minister serious when he anticipates that the price for the small producer of a quota purchase will come down over the next couple of years? Is the Minister not aware that in Holland at present milk is making £5 a gallon from purchase of quota and does he seriously suggest that this country is going to be exempt from that kind of price trend in the years ahead?
The point which the Deputy has just made only underlines what I have already said. It is because of the scarcity of milk in Holland that they are paying that price. Milk is more scarce there than it is here because we are managing the consequences of it. They are entering into joint ventures with co-ops in this country, such as Waterford Co-Op, in order to ensure that they will have milk to make their cheeses. The figures indicate that there has been a reduction. It is not the same all over the country. Some of the larger Co-ops are paying of the order of £1.20 per gallon but in the west and north-east they are paying much less. One Co-op are paying as low as 75p per gallon. So, the indications are reasonably encouraging.
A final supplementary. I want to deal with other questions also.
Would the Minister agree that it is a gross injustice for a Co-op to pay only 75p per gallon to small suppliers in a disadvantaged area?
Does the Deputy want us to pay the person who is getting that price for his milk or the person who is paying it? Where is the injustice?