Jimmy Deenihan
Question:12 Mr. Deenihan asked the Minister for Agriculture and Food the reason for the fall in the price of milk and the measures he intends to introduce to help the survival of the small milk supplier due to the loss of income.
Ceisteanna—Questions. Oral Answers. - Milk Prices
Prices in international markets for dairy products improved significantly in 1988 and remained buoyant throughout most of 1989. The recovery of the world dairy market in 1988 and 1989 was a direct result of the actions taken by the EC in reforming its milk regime through the imposition of quotas on milk production, restrictions on intervention intake and the elimination of intervention stocks. However, world market prices started to weaken in late 1989 and the decline has continued into 1990 resulting in a reduction in milk prices here. Producer returns have started to feel the effect of the downturn in the commodity markets just as they benefited from the exceptional market buoyancy in the past two years.
Since the market decline became evident, I have been pressing the Commission for readjustment to the various support measures applicable in the dairy sector in order to restore balance and price stability to the market. Action has since been taken on a number of fronts, including an increase in the level of export refunds for certain dairy products, increases in the subsidies for butter used by the pastry, confectionery and ice-cream industries, for butter used as concentrated butter and for skim milk powder used as animal feed.
These improvements in the Community's market support schemes, coupled with the successful outcome of the recent farm price negotiations, are already beginning to firm up the market. As far as the small producer is concerned, I have ensured, since becoming Minister for Agriculture and Food, that small producers have always received priority in cases of distribution of milk quotas under schemes operated within the milk quota system. Of the 11 million gallons made available under the recent increase in quota, eight million gallons will be distributed to such producers. The Deputy will also be aware that I negotiated a reduction in the co-responsibility levy for small producers as part of last year's price fixing agreement.
In the longer term, of course, the protection of dairy farmer incomes and job security will depend on action by the industry itself in regard to rationalisation, product mix and the effective promotion and marketing of its production.
Since 1983 the number of dairy farmers has fallen from 61,000 to 46,000 and it is expected that there will be a further fall of 14,000 by 1994. The ESRI report of 1989 showed that 23.2 per cent of farmers were living below the poverty line. In view of this, will the Minister demand special measures for our dairy farmers at the next EC dairy management committee meeting? Will the Minister also demand that the subsidised disposal schemes for butter and skim milk powders revert to 1988 levels? Will he also demand that the level of export refunds is increased to at least 1988 levels to compensate for falling world market prices? I should also like to ask the Minister——
This is a very long question and I must dissuade the Deputy from putting questions in an omnibus form.
Has the Minister any plans to stem the unfair competition from imitation products using a dairy name? Has he quantified to what extent——
The Deputy is embarking on a speech.
——the price of milk will affect our balance of payments this year?
The Deputy raised many questions. The one in regard to imitation products is the substance of a separate question which I answered in detail earlier today. I have given examples of the special measures which I requested the Commission to take in regard to the other matters and there has been a successful outcome. I specifically mentioned four or five which had a very positive effect——
They are not enough.
Deputy Deenihan asked a series of questions and he should be good enough to listen to the replies.
If Deputy Deenihan wants to talk about the decline in the number of dairy farmers since 1983 I need not stress that I was not responsible in 1983, 1984, 1985 or 1986.
There are people leaving the land and the Minister's party are doing nothing about it.
I must ask Deputy Deenihan to contain himself.
Perhaps Deputy Callely would like to say a few words.
Deputy Farrelly must desist from any further interruptions.
I took up responsibility in 1987. Unfortunately, I cannot reverse all the trends of decline which took place between the years 1983 and 1987 but the Deputy can be assured that within all of that the small farmers in particular are afforded priority. He will have noticed that since 1987 there has been a huge increase, which I greatly welcome, in the level of dairy farmers' incomes as reflected in the recent survey prepared by the Central Statistics Office.
With regard to the Minister's suggestion that small farmers are his particular priority, would he not agree that the greatest losses in this sphere have occured in disadvantaged areas? Would he not agree also that the action he took in distributing the 1 per cent of available quota recently, when disadvantaged areas fared worst, constitutes a total negation of his previous answer?
That is not the case. In fact, the Deputy will know that the co-responsibility levy does not apply at all in disadvantaged areas——
One per cent.
——as a consequence of our action last year when I made a specific request at the council meeting, which was acceded to. There is no co-responsibility levy in disadvantaged areas. I thought the Deputy would know that. The other points are equally unfounded.
That is a totally inadequate reply to that question. The Minister knows that the dairy industry is in serious trouble. The Minister is just messing around with it——
A question, please, Deputy.
The Minister talks about his efforts to get more butter fat used in confectionery. That is a voluntary proposal; one cannot make the confectionery industry use it if they do not want to.
Let us not have argument of this kind. Let us have precise questions.
Can the Minister say, as a result of what he was endeavouring to do, how much butter has actually been used because there is no mandatory way of getting them to use it.
In fact the volume has been reduced.
Indeed.
I want to accept what the Deputy says——
Then the Minister should say so.
I will say it now and stress that all business conducted by private enterprise is voluntary. There is no rule in the world that says any Minister can tell private enterprise that they must do this or that in their business.
The Minister is tricking around with this.
The Deputy should not try to cloud the issue. What I am saying is that we got special exemptions and action by the Commission to support that sector of enterprise in relation to confectionery, ice cream, pastries, butter used as concentrated butter and skim milk powder used as animal feed. After that it is a matter for each individual promoter to decide whether he wants to avail of it. There is no law to tell them they must do so.
Unless the refunds are increased the Minister is merely messing around with the issue.
In regard to the Minister's last reply, would he not accept that whoever pays the piper should have some say in the tune; and since the Minister on behalf of taxpayers to some extent is paying the piper, he might call some of the tune? Arising from the debate on this issue would the Minister not accept that market-dependent milk prices will never guarantee the types of incomes needed by small farmers? As a direct alternative would he not consider granting direct income aids to small farmers rather than the price support scheme that obtains at present that has not given them the income they need?
The first guarantee is the level of price that can be brought about through market intervention mechanisms and such like. That is the first guarantee which has been put in place. The second is by way of action under rural development programmes. The Deputy will be aware that we have done that in regard to suckler cows and dairy herds in a whole range of actions this year. I want to assure the House that the small producer, particularly, will remain a priority because I contend that he and his family are entitled to that. I have done that consistently. If it was ignored before, that was not my fault.
Seeing that the volume of butter used in the confectionery and ice cream industries has decreased from 300,000 tonnes to 200,000 tonnes, would the Minister initiate measures to restore its usage to its former level?
That is what I am saying. That is what Deputy Connaughton does not appear to understand. Action has been taken on a number of fronts, at my request, by the Commission in their independent management function, including an increase in the level of export refunds for certain dairy products, increases in the subsidies for butter used for the pastry, confectionery and ice cream industries, for butter used for concentrated butter and for skim milk powder used as animal feed. We will continue to propose that they extend them further.
The volume has been reduced.
Arising from the Minister's last reply to me, would he say whether, if the measures about which he speaks are not as successful as might be expected, he would consider the option of granting an income supplement to small farmers to ensure they remain on the land?
I might suggest to Deputy Stagg that he talk to Deputy Gay Mitchell, who in the next question suggests that I might curb the increase in the volume of butter being sold into intervention.Would Deputies please decide which way they want it?
That disposes of questions for today.