Skip to main content
Normal View

Dáil Éireann debate -
Wednesday, 25 Mar 2015

Vol. 872 No. 2

Dairy Sector: Statements (Resumed)

I thank the Technical Group for allowing me some of its speaking time on this important matter. In the more than 30 years that the quota system has been in place, Ireland has been liable to pay €170 million in fines for breaches of the quota year on year. The abolition of the quota will mean that Ireland will now for the first time be no longer liable to penalties as a result of milk production.

I wish to acknowledge, thank and compliment ordinary farmers who for so many years milked five, ten, 15 or 20 cows. These farmers worked extremely hard with few resources and little by way of sheds. I am not talking about today's large commercial farmers who all have fine new sheds. I want to remember the people who milked five, ten or 15 cows by hand in poor quality sheds. At the time, one was a big farmer if one was milking 20 cows. I want to acknowledge all of those people at this time when we are talking about the lifting of the quotas. Many of those people have gone to their eternal reward.

The Minister of State will indulge me by allowing me mention my father who gave a lifetime milking cows. Until 1997, when he got elected to the Dáil, he used to milk cows every morning and evening. I remember he would milk the cows at 6.30 a.m. At the time, he was in the health board association and many of its meetings were held in Athlone. After milking the cows in the morning he would clean himself up, jump into the car and head for Athlone. He would attend the meeting, return to Kerry and milk the cows again in the evening. He was committed to milking the cows. I wish to remember him and people like him, particularly those who are with us no longer, who milked cows and operated under a levy system that imposed penalties for being over quota. We must move on and make progress now. Unfortunately, the day of the small farmer is gone as small farms are no longer viable. People must rise to this challenge. Our farming communities will do that, in conjunction with the IFA, the ICMSA and all the farming organisations that represent them and work so hard and diligently to represent their interests and lobby governments and Ministers. I commend the Minister of State and thank him for how he has performed in his role.

With regard to what will happen when the quota ends, I cannot let this opportunity pass without highlighting that while we are talking about the abolition of quotas, this is happening at a time when we face increased competition and must make greater efficiencies. At the same time, the eligibility of farmers' land is being attacked and withdrawn. Farmers who signed up to land categorisation have seen that land which was eligible for area aid is being withdrawn from that category. The Minister of State knows this is wrong. There is an issue now in regard to "white heather". White heather grows on much of our countryside, but we are now being told that land with white heather will no longer be eligible for area aid. That is wrong. This land with white heather may not be as good as the plains of Kildare, Meath or Tipperary, but it is land that feeds sheep and cows. Unfortunately, we are now being told this land is debarred as an ineligible area.

That is ridiculous. I was very glad last Monday night to attend a meeting organised by a group of farmers from west Cork who are taking a legal challenge in the High Court. We are all putting our hands in our pockets, farmers are united in that area. We are putting €100 per farmer into a fund of €100,000 to take a High Court challenge against this because it is wrong and it is probably one of the biggest attacks on our farming community that I have ever witnessed in my lifetime.

It is about land eligibility. It is about land that was previously eligible for area aid. I will explain it in simple terms. If one has 100 acres of ground now they are saying that instead of that 100 acres being eligible if anything over 20% of the 100 acres is deemed ineligible then one will incur a 100% penalty. Therefore, one will get no area aid.

My nephew, Johnny Healy-Rae, rightly highlighted this aspect at the meeting and he put it very well. He said, "Any person in their lives that was ever 20% wrong about something - they were never 100% wrong about everything". He was right. For a young man's head it was a very sensible point to make. A person can be 20% wrong about anything but why should that person be fined 100% for being 20% wrong? In the past those people were not 20% wrong because the land that is now being deemed to be ineligible was eligible before. That is having a detrimental effect on our farming community and family farm incomes and it will make the dairy farmer's job even more difficult. The Minister of State can appreciate this point because he has a common sense head on his shoulders and he knows what I am talking about.

With regard to the group from west Cork who are taking the legal challenge what will the Government do to try to assist these farmers? There have been a lot of protests and rightly so and people are very angered about the water charges. As I already said in the House this morning to Deputy McGrath, the water charges issue is very important but this issue of land being taken away from being eligible for our farming community is even more detrimental to that sector than the water charges are to the people who have to pay them. The farmers have to pay water charges also.

They have been paying them for years.

Most certainly so. The Minister of State is right. They have been metered and they have been diligently paying. The Minister of State is correct to highlight that fact. They just took it on the chin and paid it. When it comes to the issue of the quotas it will be a dramatic change, it will create competition and it will call for increased efficiencies. The grand people who were there long ago are gone, unfortunately, and the new system will be completely alien to the system under which they operated. However, as a farming community we will work to try to continue but I urge the Minister of State and the senior Minister to try to be grounded in their understanding of what is happening and to try to be grounded - as I know he is - in the issue of the problems that farmers have in adapting to this new change of operating without quotas and the strain and the financial constraints and competition that it will bring upon the community. I thank the Technical Group for sharing time.

I am delighted to contribute to this debate and to make some brief comments on the changes in agriculture. I welcome the fact that my colleague and fellow Tipperary man is in the chair opposite as junior agriculture Minister.

I echo many of the points made by my colleague, Deputy Healy-Rae, about past times. The Minister of State, Deputy Hayes, will also remember because it is not 100 years ago or 50 years ago, it is about 30 or 35 years ago when we were all milking cows. Deputy Bannon has indicated how cows were milked. We all did it. We never got sore fingers and we had good muscles in our fingers and hands. We were well trained for canvassing because we had built up good muscles. That is the way it was.

I salute the small farmers and their wives and families. I am proud to say that I milked cows before I went to school and I went to the well for water to wash my hands after I had milked them. We were not paying for water at that time but it was a huge effort to bring the clean water. Things have moved on. Some farmers suffered huge penalties under the quotas but these have now been removed. Today there is a different attitude to agriculture. It is great that the quotas have been removed because they imposed serious penalties on some farmers. There were issues such as moving the milk and trying to remain under quota and swapping milk. Sin scéal eile. That is finished, imithe. Now we have a new system and farmers are up for the challenge, as always. The young farmers and medium-age farmers are up for the challenge, as with most agricultural schemes. They are rightly concerned about their grants being publicised on the website. When farmers get the grant money they spend it on investment and building works such as fitting out. They work diligently tending their stock and making sure that everything is above board.

I have concerns that some farmers have transferred from beef, cereals and elsewhere. This will mean a very great number of cows. I wish them well but I have concerns. We are facing into spring and I can remember only two short years ago that we had a savage spring which was very harsh. I remember going to the Roadstone AGM to know would they get involved in helping to transport some of the fodder from abroad. I have concerns that Teagasc has encouraged this changeover and the banks are shovelling out the money. This will work provided the milk price stays at current levels but if it does not there could be huge consequences. It is very important to support farmers but one needs to be cautious and to tread lightly. Deputy Healy-Rae referred to his father. I was never at a health board meeting with him but I know that the late Con Donovan was at many meetings with him and he was a practical man. That was the way they did their work and milked their cows, looked after their children, did their work and milked the cows again. It was a seven day week. I have a worry for some of the farmers who have gone into it because they are not used to a seven day week. One cannot set the corn and close the gate for two months and spray it when it is six inches over ground. A farmer has to be there in the morning - gach maidin agus gach oíche. I support the investment but I urge caution that we would not go overboard with investment. I am very disappointed. The former Minister, Phil Hogan, now Commissioner Hogan, announced some funding yesterday. I hope it is not like the last funding that was announced some months ago with cheap credit for farmers but it turns out that the two pillar banks got the money and the farmers must go to those pillar banks, Bank of Ireland and AIB. They are charging 6% interest. What is coming from Europe and what has been negotiated in Europe should not be given to these pillar banks who have led us down the Swannee several times and not played ball with anyone. They charge 6% interest on money coming in at 1% or 2%. They should be dealt with as well. Someone at some stage is going to have to call a halt and put manners on the bankers in this country. They are not supporting the innovative, industrious and hard-working farmers and small business people. Everything is fine and dandy until we have a bad spring and then the prices per litre do not materialise. This can happen quite easily. For example, a herd can be infected or anything can happen. I am concerned about those areas.

With regard to land eligibility, the Minister of State is from the village of Golden in the Golden Vale but I represent parts of Tipperary that are not as golden, not as luscious. I refer to hill sheep farmers and dairy farmers in the Knockmealdowns and the Galtees. This carry-on with the penalties is scandalous. They had been eligible for grant aid since they joined the scheme and now because of specialist mapping or filming they are finding a clash and a glin and a small pond or heather or whatever as Deputy Healy-Rae said and farmers are being penalised.

What justice system in the world would apply a 100% penalty in the case of a misdemeanour involving 20% eligibility? In such circumstances, how could anyone be deemed to be 100% guilty? This is a flagrant violation of human and civil rights.

I salute Deputy Healy-Rae and farmers in west Cork who are taking a case to court. The legal fund of €100,000 they have established may not go far in the justice system. Will the Government defend the case? Will it wheel out the Attorney General and all the other resources of the State to challenge farmers who signed up to a scheme in good faith? These farmers received grant aid under a scheme that included the necessary checks and balances. Why has everything suddenly changed? Did Big Brother decide to change the system? The farmers did not create culverts or streams, which are the product of an act of God and permanent features. Why is a small lake or pond no longer deemed eligible?

The cost of justice is prohibitive. The farmers in question must raise €100,000, which is a significant sum. They want to tend, rear and breed their stock, bring them to the mart and deliver milk to the creamery. They want to adhere to the guidelines and meet the strict criteria in place. They do not want to take court cases. If they turn up in court in numbers, will they be barred as occurred to those who went to a courthouse in Castlebar on Monday? This also happened in Waterford and other locations some months ago.

What does this have to do with quotas?

It is a great deal to with quotas. The Deputy can be smug if he likes but he will know, when he meets the people in question, that justice delayed is justice denied. The farmers in question are raising money to fight a case. I am asking the Minister of State, not Deputy Deering, to state whether the Government will support them or wheel out the might of the State, including the advice of the Attorney General, to oppose them.

I will answer the Deputy's question when I respond.

I will be surprised if the Minister of State were to oppose them. I hope the Government will not do so. Deputy Deering can laugh if he likes but the issue is related to quotas.

The courts are supposed to be free, open and transparent. Unlike me, Deputy Healy-Rae paid €100 into the fund opened by the farmers in question. He and any of the farmers who contributed to the fund are entitled to attend the court when the case comes before it, provided they listen and do not interrupt proceedings or act in a threatening or intimidating manner. If they want to say a rosary, they are entitled to do so.

People need a supply of fresh, clean water and their wastewater must be treated. My concern with regard to Uisce Éireann relates to farmers and business people because they must always pay. When I was a councillor on South Tipperary County Council with the Minister of State, Deputy Tom Hayes, 87% of water charges were recovered. Having made such a mess of Irish Water, the Government will pass on the cost of unpaid charges to farmers and businesses, which is unfair, because this money must come from somewhere. This is the reason so many farmers are sinking wells, although the Government will probably go after wells next.

That is rubbish.

The goalposts should not change. The farmers in question were eligible to claim headage payments and so forth. Their land was mapped by experts and it is unacceptable that the eligibility criteria have changed.

I am glad milk quotas are being abolished. I extend good wishes to every farmer, whether young, middle aged or older, who has entered the scheme. The margins are tight and the estimates regarding productivity are very strong. Climactic conditions can change as we found out two years ago when we had a bad summer followed by a long, harsh spring when fodder was scarce and augmenting supplies proved expensive for farmers. I hope a sense of reality enters the equation.

I ask that the Minister address the changes that have been made. Surely a discrepancy of 20% should not result in a penalty of 100%. This approach would not stand up in any court in any justice system of a democratic country.

I apologise for leaving in the middle of the debate. I am not being disrespectful but I must return to a committee meeting.

I am grateful for the opportunity to contribute to this debate. While I welcome the presence of Deputies Mattie McGrath and Healy-Rae, it is disappointing that, on the eve of the abolition of milk quotas, the main Opposition spokespersons and members of their parties are nowhere to be seen.

This is an exciting time for the agriculture sector, specifically the dairy industry. I welcome this topical debate, which I suggested shortly after Christmas at the Joint Committee on Agriculture, Food and the Marine. At that time, the idea of abolishing milk quotas was starting to become a reality. It is important that we engage with all the stakeholders involved, as the joint committee did when it heard from representatives of farmers organisations, Teagasc and the banks.

My family has been involved in the dairy industry for a long time and I am not afraid to tog out and milk the cows at the weekends. I remember when my father moved on from milk churns to mobile milk tanks, which has given rise to increased production. I remember my father telling me that he built his first bucket plant milking system in 1947 and this was the main modern type of plant at the time. He was also involved in the Dublin District Milk Board at an early stage and tried to galvanise farmers to come together to ensure they received a fair price.

Restrictions have been applied to milk production since 1984. Now, for the first time in 30 years, farmers have an opportunity to increase milk production. This presents major opportunities and challenges, with production set to increase by 50% in the coming years. Some weeks ago, I attended the opening of the new Glanbia facility in Belview in south County Kilkenny. The Minister of State also attended the event. Glanbia is a forward thinking company which decided to invest €200 million in a rural area. I was taken by remarks of Mr. Jim Bergin, the chief executive office of Glanbia Ingredients Ireland Limited, on the amount of money his company's investment would inject in rural areas. He noted, for example, that the increased production of 79 milk producers in the small rural area of Ballyragget, County Kilkenny, would inject an additional €10 million in the local economy in the next five years. All of us seek jobs for rural parts of our constituencies. We hear a great deal of negativity from the Opposition benches about rural areas, for example, that they are dying and no one is doing anything about it. If a factory with a projected turnover of €10 million were to locate in a rural part of any Deputy's constituency tomorrow morning, he or she would jump up and down and shout about it. It is commendable, therefore, that the agricultural industry will result in €10 million being injected into a small area. This is a worthwhile and exciting opportunity.

The dairy industry can be the driving force for the reinvigoration of rural areas. We must ensure the finance that becomes available as a result of the current opportunities is harnessed in a proper manner. With opportunities come challenges, however, and some of these will be serious and require addressing. The first challenge facing us the super levy, which has been in place for some years and generally affects the same farmers. Unfortunately, the milk quota had been exceeded by slightly more than 5% by the end of February. This is worrying for some farmers as it could result in the imposition of significant fines which would have a negative effect on production from a cashflow point of view. The recent decision to spread super levy liabilities over three years provides the soft landing that farmers had been seeking. It is an important and welcome step which will ensure the super levy does not have a significant effect on cashflow.

Another challenge facing milk producers is the role of the banks, about which all of us speak from time to time.

Deputy Mattie McGrath or Deputy Healy-Rae may have made reference to the fact that many young farmers or farmers coming from a different enterprise into the dairy industry have invested a lot of money to make themselves efficient and practical in the dairy industry. These are the people who need to be watched and nurtured over the coming years by the banks in particular. In the event of a difficult financial time arising in respect of milk, banks must be flexible in their attitude. I welcome some attitudes shown by banks at present where they are prepared to extend the term of a loan or to have principle-only or interest-only payments for a period. Such measures must be extended and monitored over a period. While I welcome the banks' attitude in this regard, I encourage them to make sure they do not come down hard on those who are investing heavily for the future.

One of the biggest challenges will pertain to the efficiencies associated with the entire system. Twenty years ago in 1995, farmers were getting 28 cent per litre for milk while today, they are getting 32 cent per litre. In the same intervening period of 20 years, the cost of production has risen by 50%. Those who are involved in farming will be aware that in 1995, the cost of one tonne of fertiliser for grass was €155 and it now costs €330 per tonne. That is an increase of 112% over 20 years and this is where the major challenge lies, namely, the cost of inputs over that period and this must be addressed. It is something of which people must be extremely wary and it is important that the efficiencies that will be required do not push people over the line. People must be extremely conscious of this point.

In addition, the lessons people must learn are extremely important. Over the past 20 years, our competitors in New Zealand, for example, increased their milk production from five million litres per year to 20 million litres per year, which has created its own difficulties. Despite the significant increase in numbers and production, New Zealand currently is going through a difficult time and obviously, the world price is having a huge effect on its producers. The price now has fallen to a low 20 cent per litre for their milk, which is far below the cost of production and that cannot continue. They are having difficulties with animal welfare at present and despite their increased production, they have not increased the profit from their milk production, which is a serious problem and people here must be able to learn from that. As for producers in Northern Ireland, in 1996 they gained free access to milk because producers in England did not take up the same opportunity. Again, the producers there are going through a difficult time and basically for the same reason, which is they have not concentrated on the grass-based system. During the hearings held by the Joint Committee on Agriculture, Food and the Marine, its members heard a presentation from the Progressive Farmers group, which included a former editor of the Irish Farmers’ Journal, Mr. Con Hurley, and a colleague of his who had conducted a special report on both the Northern Ireland and the New Zealand experiences. On foot of the evidence they provided, it became evident that producers there have not learned the lesson that they were concentrating on high input costs the whole time, instead of on what we have best, that is, grass-based production. We must produce milk with grass-based production to make sure it is increasingly efficient as we go along.

I will make one further point on the area of liquid milk, about which not much has been said thus far. Huge costs arise for those who produce milk all year round, which are far above the prices producers currently receive. We must be careful because we are heading into a situation in which there will be no milk available to put on one's cornflakes on Christmas morning. People will be dependent on UHT milk, that is, those little cartons one gets in restaurants or hotels, unless this issue is addressed. While it is not a simple issue, it must pay to produce milk in the liquid sector. This is a huge issue that must be addressed and when the Minister of State is responding to the debate he might revert to this issue.

It is important that Members are having this discussion today. It also is important to have continuous engagement throughout this year in particular when quotas will be abolished immediately after the end of March. It has been important that the Oireachtas joint committee has held its hearings. The joint committee will compile a report in the next few weeks and it will be important that this report be made available. Similarly, it is important that the debate in this Chamber today and the previous day also be made public. I also welcome how the farming organisations are beginning to row in and to hold regional meetings nationwide to inform those who have entered the system or who are expanding within the system about the challenges that exist. While these challenges are important, the opportunities also are huge. This is an exciting time in which to be involved in the dairy industry but it also is important to realise there are difficulties that must be addressed in the future.

I welcome the opportunity to speak in this positive debate. A great many of the contributions have been highly constructive. However, it speaks volumes about where lies the interest of the Opposition parties in rural Ireland, after all the bellyaching in which Opposition Members have engaged in recent weeks and months. This is the industry that probably has the potential to lift every single community in the country out of the economic mire into which Fianna Fáil and its colleagues landed it. While they claim to have the heart and soul of rural Ireland, not a single Member from Fianna Fáil, Sinn Féin, the new party or the Independents is present in the Chamber. Not for the first time, they have walked out on rural Ireland. They also walked out on it in 2008, when they pulled out the door behind the country. The fact that the Opposition benches have been left empty this evening, with no spokesperson on agriculture present for anybody, speaks volumes.

The farming organisations are actively engaged in ensuring the political representatives from rural constituencies are attuned to the needs of rural communities and should take note of this spectacle that is the interest the Opposition parties are showing in rural communities this evening. It is an absolute disgrace but it is not their first time since I came into this House. It is a growing trend that the Opposition takes an à la carte approach to the Dáil and it should be a matter of record that this is the level of interest the Opposition is showing in an industry I reiterate has the potential to lift us out of the mire in it landed us in 2008.

To return to the dairy sector, I come from County Limerick, where every parish contains people who still are deeply involved in active farming. Farming has been and is the backbone of the economy of County Limerick. It is no different to most other countries, in that it is a necklace of small towns and villages across wide open countryside in which the contribution of family farms is of massive importance. I did not grow up on or come from a farm but my mother did and given my involvement as a member of Limerick County Council and in meeting people on a daily basis in my home town of Newcastle West and towns across County Limerick, I am acutely aware of the importance of the contribution the farmer plays in the local economy. Moreover, it is not only the farmer but also his or her extended family in terms of putting money back into the economy. The abolition of milk quotas has been referred to recently and given the strong affinity County Limerick has with places such as Listowel, Mitchelstown and Charleville, in which huge levels of investments have been made by the plcs that own the milk processing plants, it has a spin-off that is magnified across counties like Limerick. For instance, the workforce is derived from towns such as Dromcollogher and Ballylanders and similar places in the peripheral parts of County Limerick. In addition, it also applies to people working on farms, be it relief milking or in fixing milking machines or the provision of the basic services that are required to keep the family farm going. All of that money winds up back in the local economy and is generating real jobs in real communities for real families in which the Opposition appears to have no interest this evening.

One point on which the Minister of State should deal when responding to the debate concerns the future of farming from the perspective of the young farmer. I have mentioned this in the Chamber previously but I refer in particular to the pressures under which the agricultural colleges are operating. As the Minister of State is aware, one of them is situated in my constituency, in Copsewood College, Pallaskenry, which for many generations has provided a top-quality education to young farmers and those taking on the family farm at home. More investment is needed in respect of teaching staff, which never have been busier and the colleges have never had such numbers or the clamour to get into them as exists at present. This is a good thing because it ensures the next generation of young people will stay at home and will play an active role in their communities socially, culturally or politically. However, the agricultural colleges must be resourced and assisted. I appreciate there are resource constraints within the Department of Agriculture, Food and the Marine and Teagasc but the agricultural colleges around the country should be acknowledged. My colleague, Deputy Connaughton, is in a similar situation and these colleges have provided a terrific level of service and should be acknowledged.

Members of the Opposition sought an opportunity to play politics regarding what the Minister might or might not be able to do in respect of agriculture.

We need to bear in mind, however, that in recent budgets the Minister for Finance, Deputy Noonan, has been to the fore in ensuring that Irish agriculture takes a central role in Government policy on rebuilding the country's recovery, together with industries like tourism.

It is not that long ago that Ministers for Finance stood up in this House, before the last general election, and if agriculture got mentioned at all it was very lucky. More often than not, however, agriculture never received a mention. One had to check an appendix in the back of the book to find any such reference, and if it was referred to it was in terms of what the government would cut from the agriculture budget.

The difference now is that the Government acknowledges the agriculture sector has played a major role in our recovery. One only has to look at the St. Patrick's Day festivities around the world to see the proof of this. Wherever our Ministers went during St. Patrick's week, Irish food brands were centre stage.

In my own constituency, there is a plant in Askeaton, County Limerick, that is close to being the number one producer of infant formula derived from Irish milk. That is the future for the dairy sector and family farms that can produce added-value products for the emerging populations of China, India and Africa. In the latter continent, we are inclined to overlook the fact that there is a burgeoning middle class with large incomes who want to consume good quality food. Where better to source it than from Ireland? Some people may moan about the cost of sending Ministers abroad, but it should be recognised that such visits are a prerequisite for marketing and selling Irish food products.

The Minister of State, Deputy Tom Hayes, is very active in that role. He recently visited my constituency where he promoted an important food fair to take place this summer in Croagh. I was delighted to be able to invite him there to perform that task.

My constituency is predominantly rural and dependent on farm incomes, so yesterday's announcement by the European Commission on easing access to credit is fundamental. The abolition of milk quotas is all very well but unless farmers can invest in their yards, buy machinery and deliver products in the required volumes, it will mean nothing.

Banks have been slow to release credit to farmers and other small businesses. In that context, therefore, I welcome yesterday's initiative launched by the European Commission. We are lucky that Ireland has the Commissionership for agriculture. I know we are not supposed to say that Ireland has it, but Commissioner Phil Hogan was a Member of this House for long enough and he knows the value of Irish agriculture. That is why I believe yesterday's announcement by the European Commission was no accident. Commissioner Hogan knows that releasing credit will generate jobs in communities such as in County Limerick which will make a real difference to people's lives.

I will not repeat what other speakers have said, but I am disappointed with the level of engagement by the Opposition in this debate on the dairy sector. We need to build an economic recovery based on agriculture, tourism, services and construction. The previous Government built an economy on one leg, which was totally founded on construction. If we can spread the recovery on multiple legs, then if one of them sustains an unforeseen shock, the remainder should be able to sustain it. That is why the old reliables of agriculture and tourism are hugely important.

This debate is also important in terms of where we want to take agriculture and the dairy sector in particular. As I said at the outset, however, the lack of any engagement by the Opposition is disappointing, to put it mildly.

I agree with the two previous speakers in expressing my great disappointment that there is not a single Opposition Deputy in the House for this important debate. There are no representatives of Fianna Fáil, Sinn Féin or the Independents. It shows what they think of rural areas and the people who live there. The Opposition often cries wolf about rural services being taken away, yet they will not attend the House to support the agricultural industry, which is the backbone of rural Ireland.

The agricultural sector has the capacity to lead the economic recovery now that it is being given proper supports. This Government will invest well over €12 billion in agriculture over the next few years, which is a record figure in the history of the State. It is hugely important for the industry.

I am pleased to contribute to today's statements on the dairy sector. As a farmer myself, I know all too well the importance of agriculture, and in particular the diary sector, to farming families across our country. The biggest news story in the diary sector in recent months is the abolition of milk quotas. The abolition of quotas is perhaps one of the most significant developments for Irish agriculture since our entry into the EEC in 1973. At present, Ireland has over 18,000 dairy farms which produce around 5.4 billion litres of milk annually. This, in turn, generates a farm-gate value of more than €1.8 billion and an export value of €3 billion each year. Ireland ranks among the world's top ten dairy exporting nations. The fact that the sector employs 34,000 people shows how vital dairy farming is, not only to Irish agriculture but also to the economy as a whole. When agriculture is going well, the economy is thriving.

In anticipation of the abolition of milk quotas in a few days' trine, there has been significant engagement and activity by farmers, industry and policy makers to position Ireland to take full advantage of the increased production opportunities. As a result of such detailed preparation, Irish farmers will be well prepared for the abolition of quotas and well placed to take advantage of the huge opportunities it presents. The ending of quotas will create a much more level playing field, thus making it easier for sheep or cattle farming families to enter the dairy sector if they so wish. That same point was raised almost ten years ago by the Irish Cattle and Sheep Farmers' Association when it called for a loosening of milk quotas.

I commend the Minister for his forward planning on the matter. The State has rightly invested significantly in the dairy sector in order to support the expected expansion. This type of detailed preparation is evident when we see that €60 million has been invested over the past number of years through capital investment grants and, in addition, 7,000 dairy farmers have participated in knowledge transfer programmes.

The Government's food strategy, Harvest 2020, is another clear example of forward planning. Harvest 2020 has an ambitious target to grow dairy output by 50% in the five years after the ending of quotas next week. Emerging markets will be key to this and the recent Government trade mission to China was intended to significantly grow our potential market for dairy products in that country. There is a rapidly expanding market of over 1.3 billion people in China and they are increasingly seeking high quality food and drink imports. Irish farmers can capitalise on this and dairy farmers are currently preparing themselves to ensure that they do so successfully.

A number of key issues must be tackled if dairy farmers are to realise the full potential presented by the abolition of milk quotas. We must consider what actions we need to take in order to develop tax-based risk management measures. We also need to ensure the development of a robust wholesale price reporting mechanism to underpin price hedging options. Incentives must also be provided to increase participation in milk recording.

I would like to mention the approval of the phased repayment of the superlevy fine. This recent announcement was a huge boost to farmers and will certainly ease financial concerns, particularly in my own constituency of Longford-Westmeath.

Paying the full superlevy has in the past been a huge financial burden for farmers and for co-operatives. This year in particular farmers are preparing for the abolition of milk quotas so the surplus is even more of an issue. Farmers are keeping calves or buying more calves in an attempt to use up the milk but despite these measures, there is still a significant surplus.

These proposals will allow farmers a level of flexibility in making their payments. There is an option to pay the levy in instalments and the Minister is examining the practicalities of how this will work. The Department of Agriculture, Food and the Marine will still be required to pay the superlevy fine in full to the European Commission by the usual deadline of 31 November 2015 and farmers will repay a minimum of one third this year, the same in 2016 and the remainder in 2017.

The dairy sector in Ireland is about to go through a major period of growth. There is huge potential for Irish farmers. Now is the time for dairy farmers throughout the country to start planning for the future. Cash flow is always an issue and I am delighted that Commissioner Phil Hogan brought in easing measures yesterday regarding availability of finances for the farming sector. It is also important at this juncture that the milk quota surplus is addressed.

I commend the Minister and the Commissioner for all their work on the dairy sector. My good friend, the Minister of State, Deputy Tom Hayes is a farmer himself and knows the ins and outs of farming like the back of his hand. I compliment him on the good work he is doing as Minister of State with responsibility for forestry and thank him for his help and assistance to me in my constituency work.

I welcome the fact that this forum is being set up and that the Minister himself is chairing it. I imagine it is going to run along the lines of the beef forum or beef discussion groups, working with the relevant stakeholders in an attempt to make sure that when crises arise or issues come up within the industry, there is a way of fixing them quite quickly. I compliment Deputies Deasy and Creed, who left earlier, on the work they have done to bring this through to fruition. It is hugely important that before the milk quotas go, we have a plan. In any industry, things go up and down. As the Minister of State is well aware, six months ago the beef industry was on its knees and now all of a sudden we see beef prices are quite high. That is the cyclical nature of this industry and it is no different on the dairy side. We started this year with huge concerns over the price of milk. It has not come through just yet but there is a slight pressure on it so it is important that any forum set up to work with stakeholders has an ability to react quickly to those concerns.

There are two areas I would like to raise. One of them concerns what was discussed in the House earlier today, namely climate change. Whether we like to believe it or not, we have a commitment to addressing the issue of climate change in a serious way. That means impacting on the agricultural sector as well - it is a double edged sword. We cannot afford to let climate change get out of hand. One of the main reasons we are a successful country is our mild climate and grass growth many months of the year. We need to protect that - we do not need long droughts or excessive flooding. On the other hand, in reaching our commitments, we cannot shackle the agricultural sector. We have many farmers preparing to ramp up production, and we have to balance the two factors quite sensitively. If farmers want to invest money in their agricultural systems, their sheds and milking parlours, there is no point in then clamping down again on them. The reason for getting rid of the quotas was to allow those who had an ability to produce more to do so. In County Tipperary and all over the country there are people with the ability to ramp up production quickly and significantly. We have to be somewhat concerned about the climate change issue. It exists and needs to be addressed and it is to our eternal benefit if we do address it. However, we also have to be sure we do not shackle the farmers.

The second area concerns the fact that there is no point in producing more dairy unless we have a place to sell it. Our exports are at an all-time high, which is most welcome. However, we need to continue to be vigilant on where we are selling our product to. I recently returned from a trip to Vietnam with the Committee of Public Accounts to see how Irish aid is being spent. The Dáil and the people of Ireland would be very proud to know how their aid is being spent on the humanitarian side, but another area was trade. Vietnam is a country of some 91 million people with an economy that is starting to pick up, whose middle class is beginning to boom. They do not really have a taste for dairy just yet, but it is beginning to increase. This is a market we have to invest in. When one talks about Asia, it is very easy to think of China as it is by far the most populated country in the world and is growing all the time, and that is where most dairy products are going. However, Vietnam is in a region of 600 million people and we have to put more emphasis there.

We know Bord Bia is doing great work on behalf of the State in exporting our product abroad but is it properly resourced? I can stand corrected on this but I understand we only have one person in China. The one thing that definitely came over when we were in south east Asia was that they do not want to do business through e-mail or Skype. They want a presence on the ground and for people to familiarise themselves with the country and the products it wants. It takes time to build up that level of relationship. I want to see a situation where Bord Bia is staffed to the maximum level so that it has the potential to invest in these markets. When we start to do that we will be able to sell a lot more. We have some of the best food production companies here that are doing an outstanding job. While we can produce all the milk we want, we have to make sure we have a market for it.

As Deputy Deering suggested earlier, a small country like Ireland that is producing a lot of milk is completely contingent on exports and open to world prices. The one area we have to attempt to control is the input cost. If the price of fertiliser becomes excessive - it is becoming so - the margin at the bottom, which can keep a farmer inside the industry, is getting tighter and tighter. We are part of the European Union and the European Commission will have to take cognisance of this. We are losing all control of our input costs and it is going to have a huge impact on the way we sell our products abroad if there is no margin. It has the potential to put people out of business quite quickly.

Deputy O'Donovan referred to agricultural colleges, which are booming at the moment. Mountbellew is no different, and it shows where the agriculture sector is going. Mountbellew is going to start offering a diploma in dairy farming because of the demand for it. While the west might not have as many dairy farmers as the rest of the country, it shows that many young farmers see a future in the industry. We have the issue in Mountbellew Agricultural College - I will never fail to raise it during any agricultural debate we have - that it is not being properly staffed. It needs a long-term future.

This is a very welcome opportunity for the dairy sector. The abolition of quotas is something many farmers have been looking for and is a huge opportunity to build and promote rural Ireland in a serious way. We must be cognisant of the challenges and I would pray caution, particularly for younger farmers who are investing quite heavily, to make sure they have a very firm business plan, know exactly where they are investing and are not taking risks beyond their control.

We will increase production by nearly 50% and that is welcome, but we must work on where we are selling the product. We are doing very well on exports, food and drink are going very well, but let us invest in our semi-State bodies and Bord Bia and put people into all these emerging markets.

There will be large dividends if we establish ourselves in those markets. Countries such as New Zealand will say they will produce milk as well as us, but they will not. However, there is no point in Ireland talking about our great product unless the rest of the world knows about it. We need to invest in people on the ground. I can assure the Minister of State that if we do so, we will make the money back tenfold.

It is good to recognise the contribution of our dairy sector to our economy. It is a pity to have to do so tonight with no Opposition member in the House. I find that galling because we frequently hear about how the rural economy is failing and how it has problems. Certainly, there are problems but it would be nice to be part of this debate because the expansion of the dairy industry will mark the return to an indigenous industry that will operate for many decades and which will bring back prosperity and employment and keep family farms alive and people in rural areas. It is critical. I grew up on a dairy farm and am proud to have done so. Dairy farming is a fabulous way of life and a dairy farm is a good place to rear children and grow old. In a sense, there is a lost generation of people.

Quotas were introduced in 1983. For young farmers at the time, this spelled disaster. One cannot move ahead while having one's hands tied behind one's back. The quotas are gone now, and I am glad of that. However, we must recognise that as we move ahead.

There is a great urge to expand in the industry. Our own local co-operative, Dairygold, serves as an example. A member of its board is in Leinster House tonight. While there is a great urge to move ahead, with a 57% increase in Cork, there is no prize for being first. I do not want to see considerable sums of money borrowed in very volatile markets. We have volatile prices and inputs, and food prices and weather crises must be borne in mind. Therefore, we must be very careful, although there is a great opportunity.

I spoke earlier about the superlevy fines. Apparently, for every 1% we go over quota, it will cost the country 1%. Therefore, if we go over by 7%, which is a possibility, it will result in a cost of €100 million, which is a lot of money. However, this is the last time this will occur. I am glad there are measures in place that will lessen the effect of the fine. Certainly, this is the last time we will be facing it.

Great progress has been made on infrastructural projects. In my locality, Dairygold is investing heavily in both Mitchelstown and Mallow. The Minister and Taoiseach visited to see the opening of the plant. The Irish Dairy Board is to start work in Mitchelstown very soon. Every block of Kerrygold butter in the world will be manufactured there. Is that not a terrific scenario? The produce will be exported all over the world.

With the help of the Government, we have discovered once more what indigenous industry is all about. Let us face it: this country had lost its way. We were getting rid of all our manufacturing industries, such as our beet industry. It was incredible. However, we have gone back to basics and that is what creates employment. Today in the town of Mallow, there are 350 people building the plant, not to mention those who will be working there for decades.

The abolition of milk quotas will see approximately 10,000 extra jobs, at least, because the amount of work upstream and downstream of the huge industries in rural areas is phenomenal. That will be our legacy. It is very important because this is building Ireland, jobs and business. The diversification that will follow is also significant.

Farmers spend money, and so do the associated co-operatives and processors. When the pollution scheme was in operation a few years ago, €2 billion was spent. There will be an increase in expenditure but there will be volatility. I attended an event yesterday in Cork called Get Financially Fit. The event, which is going around the country, was run by Teagasc, which is to be commended for it. One must plan one's expansion. I am not a great fan of the pulse debt that is evident at present whereby people borrow a lot of money and try to sweat the asset for many years. We should consider putting a plan in place according to which so much is spent annually and facilities are built up over the years without risking too much exposure to debt. In a volatile market with high input prices and low product prices, farmers could face a difficulty. We do not want to land them in unduly stressful circumstances. Cash flow is very important. I encourage people to examine their cash flow really seriously.

Farming needs to improve on its office work. Many small businesses outside farming have dedicated office staff. We need to ensure farmers become very much aware of the importance of an office. I said yesterday that my business was turned around when we put people into an office and took the office out of our house. I do not believe the house is the place for an office. People need to remove offices from their homes. If one is audited at some stage, one will realise the house is certainly not the place to conduct it.

When discussing the dairy industry, it is important to mention the tillage industry. The latter is going through a very difficult time. It contributes over 2 million tonnes of animal feedstuffs to our dairy industry and is highly valuable. Although we have a grass-based system, we need to ensure we continue to supply home-grown, fully traceable feed. A lot of indigenous protein will be produced through our beans. This market is being stimulated and the Minister negotiated extra payments. It is important that the tillage industry be recognised. Prices for tillage commodities today are the same as they were 20 years ago. That is not sustainable so it is important, therefore, that the Minister pay attention to the industry. We cannot afford to lose an industry because of the current fluctuation in prices. Many tillage farmers have spoken to me about this. It is a very serious matter.

If we lose the tillage industry or decrease the volume produced at present, we will become completely reliant on imports. Only one thing happens when one is fully reliant on imports: prices are out of one's control and one becomes a price taker for inputs. That happened to us in the fertiliser industry. When IFI closed in Cobh, we lost a huge State asset. It was another one of our industries that were shut down. The previous Government should hang its head in shame. One would swear it almost set out to shut down our indigenous industries. It was unbelievable. It could not wait to shut them down and let the products be manufactured somewhere else. This caught us and hurt us so badly, and that is why we are having a problem with our input prices. However, we cannot change that immediately.

The primary point on milk is that farmers need to make a living. I said yesterday that when people are examining inputs and producing profitability monitors, the first figure they should include is how much it costs to feed and educate the family and have a standard of living that is reasonable. That is hugely important because producing milk of high quality involves a 24-hour day throughout much of the year. There is an incredible workload. I grew up on such a farm. To do what must be done, there needs to be reasonable compensation and one cannot be worried that one cannot pay one's bills. That is really important. From time to time, with fluctuating prices, we will need to support the industry. I note that the Ministers are very conscious of this. We cannot avoid it.

Earlier today I spoke about the climate change legislation. It will have implications for our industry. We need to ensure it will be worded and implemented in such a way that it will be practical. We need to ensure a climate change Bill does not have the aspirations of the Green Party, which is now long gone. I remind the Green Party that there was a fabulous environment before it and that there will be a fabulous environment after it. To a great extent, it is the farmers who have protected our environment. However, we must be careful that we do not sign up to a measure that will damage our industry and that is impractical.

We need to market what is good about our industry. The dairy industry is bringing prosperity we knew it could deliver. We must also remember that we must promote diversification. It was only last week that I met a young couple who are setting up a cheese manufacturing facility on their farms. Following the taxation review, off-farm income is now going to be allowed to be included in income, averaging over five years. This is important.

I wish to recognise the huge and positive impact the dairy industry is having in our country. We must look at the challenges not as something we cannot overcome but as something we will achieve. We will move on and we will make this country a manufacturing country once more, with employment in rural areas for a long time to come.

I am glad to have an opportunity to speak for a short time on this issue. I concur completely with the last speaker in every respect. One of the things we have learned from the era of the so-called Celtic tiger is that we can do things if we are pressed. We learned to recognise that we could achieve greatness if we applied ourselves. Of course, we learned a few other things we should not have learned at all. We learned to overlook some of the things that were under our noses and which were possible of great appreciation and benefit to the national cause, our economy and the people of this country. We seemed to ignore them.

We all recall how the agri-sector, the agrifood sector and the dairy sector were regarded as poor relations which we only tolerated. There were other brighter and better things and greater and more exciting places in which to invest and apply ourselves. We were wrong in that presumption. When the time came to call on the country to rally to the cause, to rise up and to drag ourselves back up on to dry and level land, it was the agrifood sector which was first in the line and it did its job extremely well. All credit to those involved in that industry. Along that same line was the pharmaceutical sector and the IT sector. These were three vital areas of investment which were essential and fundamental to the economic recovery which has been achieved in a very short time.

I listened to the criticisms of the future of the agrifood industry, in particular the dairy industry, in the aftermath of the abolition of quotas. George Bernard Shaw coined the phrase that there are some people who see things as they are and ask why and then there are those who see things as they might be and ask why not. We need to look again at the latter. One thing is certain. In the aftermath of the abolition of quotas, opportunities will abound in abundance. We need to have the opportunities in the first instance. If we have the opportunities, it is then up to ourselves to market our produce, to hustle and to be aggressive in the marketplace and to recognise that people worldwide are not likely to be able to go without food for too long. We have a product that everyone will want. We now have the technology, ability, knowledge and commitment to develop niche industries as well as major industries and to utilise the availability of and access to world markets in a way that has not been done before.

Time has moved on and developments have made it possible for this industry to achieve greater heights than it has ever done before. There are those who say there are pitfalls and that there will be a glut of produce on the market. There may well be a huge increase of produce on the market but there will also be an awful lot more people seeking to acquire and purchase those products. There is also the possibility of variations and adding further enhanced value.

There are huge opportunities opening up as a result of the changes taking place in the dairy sector which will benefit the entire economy and not just this one sector. It will be of benefit to the younger generation because it will give them an opportunity to access this industry and the marketplace at a different level to that previously achieved. It will give them an opportunity to interact in the world marketplace in a way that was not done before and which is beneficial to the Irish economy. The benefit of the Celtic tiger has been that we are able to see how much we can achieve if we put ourselves to it. This is the opportunity now presenting.

I congratulate the Minister of State and his colleagues in government for the tremendous turn around in this economy in the past short space of time. Those on the empty benches opposite have denigrated, criticised and been negative about everything in the past four years. They could not say a positive word if they were paid. Needless to say, they are not here, because they do not indulge in such debate. I am not referring to the Acting Chairman, Deputy Troy, of course because I know he would not do that under any circumstance.

I have to remain impartial now.

I compliment the Acting Chairman for being present at this moment in order to hear what will be said during this debate.

I will have an opportunity to reply.

I do not know how this country survived given the amount of negative input from some quarters. Every single issue was negative. For those who suggested that they put the country on the right road before they left office, I have bad news. They did not. They made three attempts to do so and three times they failed. Three times they fell back again having been re-elected in 2007. Three times they came up to the wire and shied away from it. They failed and wilted, so they did not do it.

Without the leadership of Government over the past four years, nothing would have happened. We would have fallen back by the wayside again. To those who said this country will not survive, they were wrong. There were huge sacrifices. These were massive sacrifices made by the people of this country. Every aspect of human life was affected. It could not have been done otherwise. It is not true to say that only one sector of society carried the burden. Every sector of our society carried the burden, including those who are poor, those on middle incomes and the so-called rich. Everyone paid a huge price.

We have also learned a lesson. I hope we have now learned never to allow these things to happen again, never to be indiscreet in the way we handle our economy, to take every opportunity as it arises, to do the best we can, to be honest with ourselves and, instead of putting party allegiances and the future of political parties ahead of everything else, to put the good of the country ahead of everything else. This is hugely important now and always has been. For far too long, opportunities have opened up, it is alleged, for the benefit of a particular party or parties. There has not been the openings for such nonsensical-----

Will the Deputy keep to the tenor of the debate, which is statements on the dairy sector?

This is on the dairy sector. It is permissible, as Deputy Troy, as an incumbent of the Chair, knows, to make passing references to the whole economic situation.

The Deputy has strayed off.

I stand by the Acting Chairman's superior knowledge in these areas and I will not go into it too much further, but it is not permissible for the Acting Chairman to keep interrupting a Member either.

When the time comes to recognise the benefit of the opportunities that have opened up in the dairy sector, which have been provided by the current Government, I hope that all of the people who have been critics and who have been totally cynical in their criticism over the past number of years will come out and say that the Government has done well and that this has been an exercise to behold. The Government has served the country well by producing the opportunities in the dairy and beef sectors and in the economy in general.

I sincerely thank, on my behalf and on behalf of the Minister, Deputy Simon Coveney, each and every one of the Members who contributed in this House three weeks ago and tonight. The importance of the dairy sector for Ireland is huge. For the country as a whole and for rural Ireland in particular, the opportunities are phenomenal.

Based on Deputies' contributions, there is a broad consensus evident that a significant opportunity is presenting for the country. There is an unambiguous wish to embrace it fully across the spectrum. This opportunity has phenomenal potential for every farmer, in particular dairy farmers. Various Deputies have touched on how it presents an opportunity for young farmers. For 30 years or more, people in Ireland were hampered by the dairy quota. Young farmers were trained but when they returned to family farms that did not have quotas they could not expand their businesses. After many difficult years for the economy, a new horizon has opened. It came about following the decision of the European Commission, at a time when Ireland held the Presidency, to abolish dairy quotas. The Minister for Agriculture, Food and the Marine, Deputy Coveney, headed up the argument and achieved agreement across the EU on abolishing the quotas. Hence, the opportunity for Ireland.

In recent years, we tried to find new ways of creating jobs. There was growth in the pharmaceutical sector and the IT sector has been mentioned, but the current opportunity for agriculture is considerable, be it at farm or co-operative level. Two weeks ago, we visited the new Glanbia plant that was being opened in Waterford. It is probably one of the best plants in the world. Once milk is unloaded there, the next human being to touch it does so when it is put on a forklift to be loaded onto a truck for export. This type of efficiency and modernisation is not only found in the Waterford plant, but also in the Dairygold, Kerry Group and other large plants around the country. This opens up significant opportunities to sell into many markets globally. In terms of China's market, we need to produce high quality infant formula.

The recent debate on water and its cost has been mentioned. If we are to expand the dairy industry, we need many things, one of which is clean and good quality water. This issue is of significant importance to everyone involved in the industry, not just farmers.

Several issues have been raised. The training of young farmers at agricultural colleges must be addressed. As the economy exits its difficulties, extra resources to train more young farmers will undoubtedly be made available. The issue of banks making credit available was mentioned. That the Commissioner, Mr. Phil Hogan, made extra money available at a cheap rate this week to allow farmers to expand their businesses was important. I hope this will not lead to extra costs and that the banks will fulfil their promises. When they are making money available to farmers, processors and so on, their interest rates should be kept low. We must be careful regarding many other important issues in terms of banking, for example, prudent lending. Deputy Barry hit the nail on the head when he stated that we could not overborrow. That was an important point.

There are other issues, but the one on which I would like to spend more time than I have is the actual idea behind this debate, namely, the proposal by Deputies Creed and Deasy to put a system in place so that we might have a new way of discussing milk quality, financial management and the other issues facing the dairy industry. Deputy Deering referred to problems in terms of liquid milk. Issues will arise as milk production and farming expand and develop. This is why I am delighted that the forum chaired by the Minister and proposed by Deputies Creed and Deasy will form part of the way forward.

I thank Deputies for their many excellent contributions. I listened to Deputy Connaughton's comments on the environment. He was 100% right. Forestry has a role to play. We have many other issues to discuss. We have an industry that is capable of making this country No. 1 in the world. In the years ahead, the dairy industry will expand significantly and we will have a quality product. If we keep standards high at all times, our industry will have a great future. The people involved must be complimented. I thank them for giving the House this opportunity to explain about a good industry instead of being negative about rural Ireland. Rural Ireland is doing well and is undoubtedly changing.

I thank the Minister of State.

I must make this final point. I do not want to revert to rolling churns, the old way of life of many years ago, the slavery and the drudgery. Dairy farming is a new and modern phenomenon. I want the people living in villages and towns in rural Ireland to progress, be educated and have a better quality of life. This is what modern rural Ireland is about. This is the change that will be brought by the new programme.

Sitting suspended at 7.17 p.m. and resumed at 7.30 p.m.