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Dáil Éireann debate -
Tuesday, 20 Feb 1996

Vol. 461 No. 7

Adjournment Debate. - Milk Quota Protection.

I am grateful for the opportunity to raise this important matter. I will shortly be 14 years a Member of this House and prior to that I spent 14 years working with the co-operative movement, in all facets of its industry, throughout Connacht and in County Clare. I wish to express my support this evening for my local co-operative, the Midwest Farmers Co-Operative, in its efforts to protect the milk quota of its small suppliers throughout the west and the midlands. I am delighted the Minister for Agriculture, Food and Forestry is in the House because last year he made a number of major pronouncements about ring fencing quotas in the west and in severely handicapped areas. I come from a county that has been classified as severely handicapped. The Midwest Farmers Co-Operative is one of a number of small co-operatives in the west. It has made a unique contribution to the development of our county and the entire western region over the years.

Teagasc is a State organisation whose main goals are to raise the competitiveness of agriculture and the food industry, ensure the continuing viability of the maximum number of farmers on the land and stimulate development and employment in rural communities. We have strongly supported Teagasc in the west as farmers, as a community and as a co-operative movement. In the 1970s, Athenry co-operative mart, where I worked, co-operated with Teagasc in making available to it a herd of friesian cows interest free over a period at their research centre in Belclare, near Tuam. Teagasc subsequently decided to close down the Belclare research centre and transfer its activities to Athenry and elsewhere. Prior to that it had closed down its operations in Creagh and Blindwell and were it not for Fianna Fáil in Government it would have extricated itself from most of its activities in the west.

The milk quota, originally consisting of 68,000 gallons, was created by western initiative on a farm managed and operated as a research centre by Teagasc. Teagasc transferred its activities to Athenry Agricultural College — owned partly by the Department of Agriculture, Food and Forestry and Teagasc — which owns 640 acres of the best land in the west. Prior to the amalgamation the college had a quota of 53,000 gallons and was then instructed by Teagasc to acquire extra cows to supplement the existing stock.

During the past two years Teagasc has been considering what it should do with its operations in the west. Negotiations have taken place in the past year between management and representatives of the Midwest Farmers Co-op and the managing director and some of the operational directors of Teagasc. Agreement, satisfactory to both parties, was reached in May 1995 but Teagasc did not communicate with the Midwest Farmers Co-op until last week when its operations director indicated to the chief executive of the co-op that it now proposes to transfer 56,000 of the 68,000 gallon quota to their farm in Kilmaley, County Clare. If this happens the suppliers to the Midwest Farmers Co-op will face an extra superlevy of 6 per cent as of 6 March, such is the volume of the quota being transferred.

Will the Minister fulfil his commitment to ring fencing quotas in the west and his Government's commitment to the development of the west and ensure that Teagsc fulfils its mandate to maintain as many families as possible on farms in this severely handicapped region? Will the Minister intervene and direct, not later than tomorrow, the chief executive of Teagasc, its board and its operations director to rescind the decision to transfer Galway milk to County Clare and to ensure the viability of the Midwest Farmers Co-op and its small suppliers are not threatened in the future? If Teagasc goes ahead, it will be a crisis for the co-op and a vote of no confidence in agriculture in the west. If the Government allows this to happen, it will be a kick in the teeth for the people in the west.

This is an opportunity for the Minister to exert his position as the political head of agriculture and we are depending on him to do so. I am confident he will not be found wanting.

The procedure for the transfer by a producer of his or her milk quota from one milk purchaser to another is set down in the European Communities (Milk Quota) Regulations, 1995. The incorporation of the transfer procedure into the regulations ensures, in my view, that the rights of both the producers and the milk purchasers are acknowledged in that the movement of quota between purchasers is ordered and the producers have a clear understanding of the requirements for exercising their right to transfer.

Under the regulations a producer's quota may be transferred on 1 January, 1 April, 1 July or 1 October provided the following requirements are met: notice is given, at least three months before the proposed transfer date, to both the existing and the new purchaser. This notice is to be given on the official application forms which are appended to the regulations and must be sent by registered post; the new milk purchaser submits an application to the Minister for an increase in its quota to the extent of the proposed transfer. This application is to be made within two months of the commencement of deliveries by the producer to the new purchaser.

The regulations also provide, however, for an exception to these general rules. A producer may apply directly to the Minister for the transfer of his or her quota, stating the reason for that application. Both purchasers concerned will be given an opportunity to state their views on any such application.

An application under the regulations has not been made to me in this case. I am, however, aware that this matter has been raised with my Department. Documents have been made available to my Department which would indicate the producer's intention to transfer in that the first stages of the transfer procedure were put in place before the end of March 1995. An application under the regulations by the proposed new milk purchaser in accordance with the time limits set down was not, however, received.

While I have not received an application directly from the producer under the exceptional measure which I have mentioned, it is still open to the producer to do this. Should I receive any such application, I will consider this in consultation with the various parties involved. Any such consideration will have to include, on my part, the recognition of the producer's entitlement to produce milk to the extent of their milk quota entitlement without incurring a super levy liability.

What is at issue is the application of the milk quota regulations as they stand and that is where my role and the role of my Department arises. If a case is put to me it will be examined fairly and objectively. In the context of producers in the west and in all other disadvantaged areas, I must remind the Deputy of the arrangements which I have put in place in order to maintain, in so far as possible, milk production and processing in these sensitive areas. The ring fencing of milk quota within the disadvantaged areas in the case of land transfers is a significant measure which has already proved to be extremely beneficial to the west. The provision of a subsidy for smaller scale producers towards the cost of purchasing additional quota under the restructuring scheme will also have been of immense benefit in that the majority of smaller scale producers are situated in the less favoured areas. I have also given these producers priority under the temporary leasing schemes and the distribution of flexi-milk.

The super levy liability for the current year will not be established until after 31 March 1996. No one can accurately forecast at this stage the effect that a transfer from the milk purchaser in question would have on a possible super levy liability in that concern.

In view of what the Deputy has said, I will ask the principal officer in the dairy division tomorrow to discuss this matter with Liam Downey, the director of Teagasc, and explain the Deputy's view on it to him. I do not have the full facts on Teagasc's view. After the Deputy's representations have been conveyed the situation will then be fairly assessed.

It is down to 2p per gallon on leasing. Will the Minister direct the director to ensure this decision is rescinded? Otherwise there is no hope for small farmers or small co-operatives. I am appealing to the Minister to intervene personally.

I will have the matter considered.

I look forward to the Minister's communication.

The Minister's reply ends the debate.

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