Liz O'Donnell
Question:27 Ms O'Donnell asked the Minister for Agriculture, Food and Forestry the changes, if any, he proposes to make in relation to the temporary milk quota leasing scheme; and if he will make a statement on the matter. [1839/96]
Ceisteanna—Questions. Oral Answers. - Milk Quota Leasing Scheme.
A review by the milk quota review group of certain aspects of the operation of the milk quota system in Ireland is currently under way. The arrangements for the future operation of the various schemes, including the temporary leasing scheme, are being considered in this context.
It is my intention to announce in the near future the details of the 1996-97 temporary leasing scheme following further consultation with the review group.
Has the Minister received the review group report? If not, why is the Irish Farmers Journal able to print it in full but the Minister is not able to give the information to this House? Is is not typical of the attitude of some members of the Government to this House that they refuse to give that information, even though they have it?
No, I believe things should be as clear as a pane of glass.
Venetian.
There is no mystery about this. The report containing a suggested way of proceeding is available but I have not seen it. The report was circulated to the members of the milk quota review group, comprising of representatives from all the industry and farmer organisations, who will critically examine it. I will receive their recommendations.
The issues to which they will refer will be the price of temporary leasing for this year at 27p per gallon which is perhaps too low to be attractive and the priority to be given to certain categories of milk producers in terms of the volume band categories. The first category is a 30,000 gallon quota defined as the quota of a small producer; the next category is 30,000 to 50,000 gallons and the third category is for producers with more than 50,000 gallon quotas.
I was concerned about the non-availability of milk for these leasing and restructuring schemes and I introduced a clawback arrangement to counter the overheating caused by what I term cheque book acquisitions of leases of milk quotas and land, some of dubious legality. I introduced a 10 per cent penalty surcharge which would go into a pool. If the report suggests more stringent measures to ensure there is an adequate pool of milk for deserving categories of producers I will be sympathetic to it. I want to establish, as has been the case of my predecessors, a consensus in the quota review group before making final decisions on the matter.
Does the Minister agree that in order that the most deserving applicants receive leased temporary quotas it should be confined to those who hold the low quota, that is, producers with under 35,00 gallons quota and that their requirements should be met before the next band's needs are met?
In broad terms I agree with the Deputy that those producers in the lowest category are the most deserving as they can least afford to acquire quota. Of all member states, we have had since 1984 when the quota was established the most elaborate and the highest volume percentage rise of milk restructured in a political way favouring the small producers and some 80 million gallons of quota has been leased annually under these schemes. It is my intention to continue that level of active intervention to help those who are least able to help themselves.
Will the Minister confirm the European countries that would not conform to their quota requirements in the past year? If there is a European milk pool what is the possibility of Ireland taking up extra quota from the EC?
It is important that I am explicit because we are facing a milk quota super levy bill of £25 million as a result of being almost 2 per cent over production at the end of December and there is no prospect of Euro flexi-milk being available. We have to manage within the quota and I urge all farmers to consult with their Teagasc or co-op advisers to ensure that they feed whole milk to calves or take whatever steps are necessary to ensure they manage their own quota as they did in the past.
I raised the issue of clear breaches of the terms of the milk quota leasing scheme because of the dubious legality of some of the leases where land is not going with the quota. The Minister acknowledges that but given the number of leases it is surprising there is no monitoring of them or no requirement for people who lease their quota to get prior approval from the Department which can check on the bona fides of the lease. The co-ops would normally lease 7,000 to 12,000 gallons but this year they were offered 3,000 to 4,000 gallons. Would the Minister agree it is imperative to establish a monitoring mechanism for each lease, given that this national asset is being concentrated in fewer hands each month?
It was for that reason in 1995 I stepped up the level of inspection of dubious leases. I issued strict warnings stating that people found to have participated in a dubious lease will face very little super levy consequences themselves because we will not hesitate to invalidate them. It is not possible administratively to give prior clearance to these leases but people who engage in dubious practices run a serious risk. I take the Deputy's point and I will seek a report on the outcome of that vigilance and will try to ensure we stamp out any such nefarious activities.
It is time there was some regulation. Due to the scarcity of milk quota leases last year, many producers who anticipated they would be able to lease a quota were caught out and find they have a substantial amount of milk in the month of January. It is even inflating the price of calves because people are buying up calves. The small to medium sized producers anticipated there would be available quota and as it is not available they are in a serious position. Will the Minister support the Border co-ops proposal on the additionality of milk under the peace process?
The Deputy is correct that the co-ops do not have as much milk for restructuring under the temporary leasing scheme because it has not been offered to them. That is one of the problems I am examining. I am considering whether to increase the price from its present 27p level.
On the question of extra milk quota for the Border counties I have had discussions with Baroness Denton and Douglas Hogg, the UK Minister for Agriculture. The British are wholly unsympathetic on this issue. The best advice available to me is that if this is to be pursued through the usual agricultural channels, in other words through the special committee on agriculture, the dairy management committee, there would be little or no prospect of that coming to fruition. It will have gone through a political rather than agricultural route. I am not aware that the British authorities are particularly enthusiastic about it.
I assure the Deputy that in all circumstances I will be supportive of it and do all I can to bring it about.
Will the Minister guarantee that he will seek to provide a percentage in the next review to try to maintain the co-ops in that area which are under serious threat?
The Deputy will be aware that I introduced legislation to ringfence the milk quota pool in disadvantaged areas in order to maintain the maximum number of family farms and the small quota structure in Border counties. Much of the quota was moving eastwards and southwards to larger, more affluent dairy farmers. I acted within my powers. However, the matter may be the subject of litigation and appeal. I am committed to supporting those disadvantaged areas. I reclassified large areas of the Deputy's constituency as more severely disadvantaged and that will bring direct economic benefit of hundreds of thousands of pounds to those farmers.