Milk Quotas

Michael Moynihan


24 Deputy Michael Moynihan asked the Minister for Agriculture, Fisheries and Food the progress made to date in building a coalition with countries such as the Netherlands and Denmark to bring about changes to the milk quota regime prior to 2015. [17802/11]

As the Deputy will be aware, I and my officials have been making consistent and ongoing efforts in recent months to secure a soft landing for all member states in the lead-up to milk quota abolition in 2015. These efforts have included close contacts with colleagues from the Netherlands, Denmark and other member states, as well as consultations with the Commission. Possible options include the front-loading of the remaining quota increases, a reduction in the super levy, a further reduction in butterfat correction levels, or a kind of EU flexi-milk arrangement which would operate provided EU production overall was within quota. I am aware this is the policy option the Deputy has been pursuing.

However, I must emphasise that the Commission has consistently resisted attempts to reconsider this issue, as it has resisted attempts to revisit the outcome of the 2008 health check agreement in an overall sense. It is also the case that only a minority of member states is likely to be adversely affected by the current quota restrictions and, therefore, persuading a qualified majority to agree to an adjustment of the current regime represents a significant challenge.

Irish dairy farmers must, therefore, continue to operate on the assumption that no further changes will be made to the milk quota arrangements agreed in the context of the CAP health check. This is extremely important, and I cannot emphasise the point strongly enough. Estimated milk deliveries in the 2010-11 milk quota year, which must still be confirmed, show that total butterfat-adjusted deliveries were just 0.43% under quota. Deliveries are also well ahead of quota in the first two months of this year, with the national position at the end of May nearly 5% over quota.

I agree with what the Deputy wants to do and we are trying to pursue that option. I have had a lot of informal discussions with my counterparts in different member states, including most recently with officials from Lithuania. I have also raised the issue informally with the Italian ambassador. We will continue to do that, but it is going to be a long process. We all have a responsibility to warn dairy farmers who are pressing ahead and producing milk over quota, on the assumption there will be some kind of political solution to the issue by the end of the year, that they are behaving in a dangerous way and that if they continue to produce over quota, as they are doing currently, we are likely to see a super levy and fines imposed on Ireland next year.

I thank the Minister for his reply. The statements the Minister has been making with regard to finding a political solution to the issue, particularly with regard to this year and the difficulties dairy farmers are experiencing, are quite correct. We on this side of the House have been making the same point at every opportunity.

I have been raising this issue in our various discussions at Question Time and at Private Members' time because I am quite concerned about a number of people, not just for the milk quota year 2011-12, but right up to the abolition of the quotas, who, because of trends or because of the fair wind blowing, have got themselves into a bind. This has been highlighted again in the Teagasc report. The Minister mentioned the European flexi-milk arrangement, but this is obviously not attainable in this milk quota year.

Has the Deputy got a question?

Discounting this year, what efforts will we see made in 2012, 2013 and the subsequent years before the abolition of the quota to attain a realistic solution? I understand a new European Presidency will start in January and it may be more favourable to our plight. Is the flexi-milk arrangement attainable?

I appreciate the Deputy's approach on this. We all have a responsibility to speak to farmers and farming organisations in blunt terms. They are already aware of the reality and know that we are very unlikely to get a political solution to this issue this year. Therefore, farmers need to act accordingly, but many are not doing that. Many of them are just pressing ahead, on the assumption that there will be a resolution or they are trying to factor in the fact that they may have to accept some form of super levy fine, perhaps paying 28 cent per litre. On the basis that they are currently getting 33 cent a litre, they would be making 5 cent per litre by producing above quota. That is a hugely irresponsible choice on the part of farmers. They should not take that route, because we cannot guarantee prices of 32 cent or 33 cent per litre into the future. They are playing with fire in this regard, particularly if prices were to change and farmers had made their calculations on the basis of paying a super levy for producing over quota, making the country over quota. I do not want the kind of farmers we need to deliver the output increases we all seek after 2015 to be put out of business because of fines that must be imposed on them in the next few years.

That said, we can and will pursue a political solution to this issue. It makes sense politically to look for a solution in the short term that does not involve a vote in Council or does not involve having to return to look for co-decisions. The Dutch, in particular, favour a further reduction in butterfat correction levels because the Commission could implement that without having to seek a vote on it. France and Germany, in particular, are very resistant to providing more flexibility on milk quota between now and 2015 because portions of the farming population in those countries are uncomfortable with the idea of abolition of quotas at all in 2015.

The Minister has gone over time.

We will continue to pursue the issue proactively, as we have been doing over the past couple of months. However, this will take time. It is a marathon rather than a sprint.