Dáil Éireann debate -
Wednesday, 16 May 2001

Vol. 536 No. 3

Written Answers - Milk Production.

P. J. Sheehan

Question:

138 Mr. Sheehan asked the Minister for Agriculture, Food and Rural Development the number of farmers producing milk; and the steps he will take to bring those farmers up to the minimum threshold for future viability. [14128/01]

Minister for Agriculture, Food and Rural Development (Mr. Walsh)

There were approximately 29,000 farmers involved in milk production during the 2000-01 milk quota year. I have emphasised on many occasions that the main focus of my policy in relation to the operation of the milk quota regime in Ireland is to provide additional quota to small and medium size producers on permanent basis and at a reasonable cost. My objectives are to improve the structure of milk production at producer level in Ireland and to make dairying a more efficient enterprise.

In order to achieve these objectives, I introduced revised milk quota regulations with effect from April 2000. I also allocated the 20.5 million gallons of additional quota, available to Ireland as part of the 32 million gallons of additional quota which I successfully negotiated under the Agenda 2000 agreement, to small and medium size producers, including younger dairy farmers. The new provisions have already had a significant impact, in that the vast bulk of the 120 million gallons of milk quota, which was available for allocation on a temporary or permanent basis, was granted to small and medium size producers.

Almost 60 million gallons was reallocated permanently under the 2000 restructuring scheme while a further 39 million gallons was leased under the temporary leasing scheme. Category I producers with a quota entitlement up to approximately 35,000 gallons benefited to the extent of 51 million gallons – or 52% of the total available – under these two schemes. Category II with a quota entitlement between 35,000 and 56,000 gallons, approximately, took up over 34 million gallons or 35% of quota under the schemes.

The successful operation of these schemes, together with the allocation of additional quota from the 20.5 million gallon reserve, has had a significant impact on the structure of milk production in Ireland. The number of category II producers increased by 24% between 1999 and 2000 while the number of category I producers decreased by 21% during the same period.

The new provisions also have provided the framework for the reduction of the price of restructured quota and temporary leased quota. The maximum price of restructured quota has been reduced by 23% from £1.60 per gallon in 1998 to approximately £1.23 per gallon – £0.27 per litre – in respect of the current year. Over the same period, the cost of temporary leased quota has been reduced by 36% to approximately £0.16 per gallon – £0.035 per litre.

In addition to introducing a restructuring scheme and temporary leasing scheme with lower maximum prices and continued priority for small and medium size producers. I have recently announced that the small scale younger dairy farmers, who benefited from the additional quota under the five million gallon reserve will be granted a further 1,300 gallons effective from this quota year.

It is my intention to continue to give priority to small and medium size producers in the operation of the quota regime in Ireland in the future, in a way which also ensures the continued competitiveness of milk production by means of lower quota prices and leasing costs.