Brian Cowen
Question:1 Mr. Cowen asked the Minister for Agriculture, Food and Forestry the reason for the changes in the temporary milk quota leasing regime; and the consequences, if any, for small quota holders in this regard. [13921/96]
Ceisteanna—Questions. Oral Answers. - Temporary Milk Quotas.
Peadar Clohessy
Question:32 Mr. Clohessy asked the Minister for Agriculture, Food and Forestry if he will ensure that the interests of small producers receive priority in the allocation of temporary milk quotas to dairy farmers; what changes, if any, he proposes to make to the scheme; and if he will make a statement on the matter. [13780/96]
Cecilia Keaveney
Question:42 Cecilia Keaveney asked the Minister for Agriculture, Food and Forestry if his attention has been drawn to the probability of a significantly increased super levy being imposed on smaller milk producers due to the changes he has made in the temporary milk quota leasing arrangements. [13800/96]
Chris Flood
Question:54 Mr. Flood asked the Minister for Agriculture, Food and Forestry if he will urgently review the changes he made in the temporary milk quota leasing regulations in view of the hardship being caused to smaller farmers. [13798/96]
Trevor Sargent
Question:58 Mr. Sargent asked the Minister for Agriculture, Food and Forestry what plans, if any, he has to change the criteria, rules and regulations for the temporary leasing milk quota scheme in order to favour small milk producers. [13767/96]
I propose to take Questions Nos. 1, 32, 42, 54 and 58 together.
When the Minister announced the first stage of the temporary leasing scheme in April, he indicated he would review the situation for the second and third stages based on the outcome of the first stage. At his request, that review has now been urgently undertaken and completed by the Milk Quota Review Group.
The position in relation to the first stage of the temporary leasing scheme should be clarified. There has been much comment attributing the dissatisfaction with the level of allocations under the first stage to changes made in the operating rules. The changed rules for the allocation of the temporary leased quota was not a significant factor in the reduction in the quantities allocated to individual small-scale producers. The primary factor was that the demand for temporary leasing greatly exceeded the supply; the quantity available for allocation amounted to 42 million gallons — the demand exceeded 130 million gallons. At the same time the number of smaller producers requesting quota from the scheme has greatly increased — by some 250 per cent in the past two years.
Following the recommendations of the review group, it has now been decided to draw up operating rules which will give priority to producers under 35,000 gallons in the second and third stages of this year's temporary leasing scheme.
Furthermore, within this category, priority will be given to those producers who were allocated quota under the first priority category of the 1994-95 and 1995-96 schemes i.e. producers whose available quotas in those years was less than 30,000 gallons. Their entitlement to quota will be based on the average of their allocations in those two years, subject to sufficient quota being available. Where these producers have been given their allocations, the remaining quota will be allocated to all other producers in the under 35,000 gallon category.
Any quota remaining available after the needs of all the applicants in this category have been met will then be allocated to producers in the next priority category, i.e. quotas between 35,000 to 55,000 gallons.
It is hoped this decision will ease the situation of those smaller scale producers whose needs are greatest. The final allocation over the two stages will depend on the amount of quota available, and the imbalance between demand and supply under the scheme has to be clearly understood. The overriding consideration is to give the maximum benefit to the category of small-scale producers with a traditional dependence on temporary leasing. The Minister has asked the Milk Quota Review Group to consider the outcome of the second stage after the 31 August 1996 closing date.
What remedy is being advised by the Department for the many small dairy producers who, having built up their cow numbers, face the prospect of having to sell them shortly or face a prohibitive super-levy bill next April? How is a small-scale producer to stay in business if he is offered only 2,000 or 3,000 gallons where he had 10,000 or 15,000 gallons under previous schemes? The Minister's reply sets out the technical position, but does the Department have any practical advice for the thousands of small producers who now find themselves in an impossible position and being squeezed out of milk production altogether?
Small-scale producers are facing a major challenge. That has come about for a number of reasons. Because of the BSE crisis cull cows are now being kept because there is no market for them, and they are producing milk. I would also emphasise that all our schemes are geared towards the smaller producer. The milk restructuring scheme is for producers of under 21,800 gallons; the temporary leasing scheme is very much geared towards the smaller producer as is the flexi-milk scheme.
The Minister and I are mindful that small producers are under continuous pressure. Coming from a rural constituency that depends to a great extent on milk production, I have been mindful of that since milk quotas were introduced in 1984. This problem did not arise today or yesterday; it was always there. Under stage one small-scale milk producers got more quota than ever before — 71 per cent of the 42 million gallons available to them. It is hoped the quota that will be available will be targeted at small-scale producers who benefited for the past two years and who came to depend on the quota available to survive and make a reasonable income. We are aware of the challenge facing small-scale producers and all our schemes are geared towards the small farmer. We have adapted this scheme, on the recommendation of the Milk Quota Review Group, to suit small farmers. It is hoped that the arrangements now in place will to some extent meet the points raised by the Deputy today.
Would the Minister of State agree that part of the problem relates to the rules on land leasing? Are there any proposals to change the land leasing rules as they militate against small producers getting access to quota? This is a problem that did not arise today or yesterday, but the Minister has confirmed that the demand for temporary quota has risen by 250 per cent. How many farmers does a 250 per cent increase represent, given that we have 40,000 dairy farmers and more than half of them have less than the 30,000 gallons which is regarded as a viable quota? Does the Minister not recognise that a fairly radical overhaul of the quota leasing system is required if the stagnation in the industry is not to be exacerbated. Without that, fewer small farmers will stay in milk production and larger producers will take up the slack. That is not in our interests, nor is it the policy of the Department. What I am asking is the number of farmers represented by that 250 per cent increase and if there will be a radical overhaul of the land leasing arrangements.
Let us not dwell too long on this question. Almost half the time available to us for dealing with Priority Questions has been exhausted on this one question. We should be conscious of the time factor.
It will represent roughly 6,100 farmers. The Minister gave a commitment in a recent press release that he will look at land leases and ensure that those in place are credible and people are not abusing the system.
As the Deputy is aware, the Minister has set up a review group to examine the milk quota system and how it operates and discriminates against a particular group.