Dáil Éireann debate -
Wednesday, 5 Feb 1997

Vol. 474 No. 4

Adjournment Debate. - Butter Voucher Scheme.

Dr. Woods

I deplore the Government's outrageous decision to agree at the EU Council of Ministers meeting in Dublin Castle on 16 and 17 December last to the proposal which slashed the butter voucher scheme by half. This decision could have been prevented if the Government cared. The worst impact of the decision will be felt by families. For example, a family with five children who previously received 14 butter vouchers a month will now only receive seven vouchers a month.

I went to the Library and examined the regulation and the report of the Commission to the Council of Ministers' meeting. It states that the scheme was working well and created a good image for the Community in Ireland. A European Commission report of 6 December 1996, ten days before the Dublin Castle meeting, concluded that a reduction in consumption could result in sales of butter into intervention. It continued:

Furthermore, a withdrawal of this long standing benefit to the less well of sectors of society, for example, unemployed people and old age pensioners, could hardly be defended from a social, market or economic point of view.

This is a report of the European Commission to the Council of Ministers during the Irish Presidency. It continued:

Furthermore, the favourable public perception of a Community scheme promoting butter sales should not be neglected.

That is a direct quote from the report received from the Commission. The report goes on to say: "Nevertheless they recommended that the maximum quantity eligible per beneficiary each month should... be reduced from 1kg to 0.5 kg." That is not a logical conclusion. It could easily have been contested. The Minister for Social Welfare, Deputy De Rossa, failed to act to protect and maintain what is a hugely successful scheme, which benefits more than 850,000 people on social welfare payments, 450,000 direct beneficiaries and 405,000 dependants. These are means tested payments made to people on the lowest income.

At a time when the European Community is awash with an ever-increasing butter mountain following a drop in consumption in recent years, it is incomprehensible and utterly indefensible that the Minister, Deputy De Rossa, did not fight tooth and nail against the butter-slashing proposal which emanated from the Commission early last December. The course of action taken by the Minister is even more alarming considering that every day farmers throughout the country literally pour fresh milk down the drain because of the super levy. It is obscene that no action has been taken by the Government to reduce such monstrous waste.

In reply to parliamentary Questions Nos. 42 and 146 of today, the Minister stated he is making special arrangements to ensure that milk quota restrictions fall least heavily on small producers. In this case butter vouchers are being taken from people who depend on the Government to defend them. If the Minister and his Government colleagues do nothing to revert such a disastrous decision of the Irish Presidency, we in Fianna Fáil, on return to office, will take up the issue. In the meantime we will continue to demand the full restoration of the butter voucher scheme. We will present without delay a watertight argument to the European Commission for the complete reinstatement of this essential scheme. We will revoke this decision when we return to power.

The Minister, Deputy De Rossa, and his colleague, the Minister for Agriculture, Food and Forestry have abjectly failed to fulfil their responsibilities to those in greatest need in the community, but Fianna Fáil will not fail them. I note that neither the Minister for Social Welfare nor the Minister for Agriculture, Food and Forestry came in tonight to defend their actions. Instead they sent the Minister of State, Deputy Deenihan to represent them. The Minister for Social Welfare washed his hands of the scheme and, pointing to the Minister for Agriculture, Food and Forestry, said we should blame him. The responsibility lies with the Minister for Social Welfare who operates the scheme. It is unacceptable that the number of vouchers is being reduced from 22 million to 11 million, with a reduction in payment from £9 million in 1995 to £4.5 million. The poorest people are those who are hit by this disastrous decision.

Minister of State at the Department of Agriculture, Food and Forestry (Mr. Deenihan)

This scheme is fully funded by the European Union without any national Exchequer contribution. It is one of a range of EU market measures designed to support the butter market. The social assistance butter scheme, although open to all member states, is availed of only in Ireland where it has operated since 1978. Recipients of non-contribution assistance payments under the Department of Social Welfare and Department of Health schemes are issued with vouchers for use when purchasing butter. Dependants of the beneficiary are also covered by the scheme. Each voucher is currently worth 52p against a pound of butter. Vouchers may be used only against the purchase of butter as defined in EU legislation and, hence, low fat, mixed fat and non-dairy fat spreadable products are not eligible under the scheme.

Since 1988 the relevant EU legislation requires the European Commission to review the scheme every two years and to report to Council on the possibility of continuing it for a further two years. Following its most recent review the Commission concluded the scheme could continue until 31 December 1998 at the existing rate of subsidy, but that in view of the decline in Irish butter consumption levels the eligible quantity should be halved. Since the eligible quantities were originally fixed under the scheme, per capita butter consumption has fallen by two thirds and now stands at less than one pound per month. It is startling to note that 15 years ago the Irish market consumed in the region of 40,000 tonnes of butter per annum and that has now fallen to 13,000 tonnes. With the reduced entitlement, beneficiaries will be able to purchase at a reduced price one pound of butter per month for themselves and one for each of their eligible dependants.

I fully appreciate the importance of the scheme for the less well off and it was out of that concern that Ireland sought to have the scheme extended on the most viable basis possible. However, in the circumstances and particularly given the significant reduced level of Irish butter consumption, realistically it will not be possible to have this decision reversed.