Deputy Wilkinson wishes to make a statement.
National Milk Rights Group: Presentation.
I wish to advise the joint committee that I am in receipt of a pension under the farm retirement scheme. Having been appointed rapporteur to carry out a review of the scheme, I wish to make a declaration to that effect.
The representatives of the National Milk Rights Group are in attendance and will be making a presentation.
I welcome Mr. Donie Shine, chairman of the National Milk Rights Group, which asked to meet the committee to discuss its problems, along with his colleagues. Before asking Mr. Shine to make his presentation, I understand that he has been advised of the situation regarding privilege, in that, while members of the committee have absolute privilege, that same privilege does not extend to witnesses. Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the House or an official by name or in such a way as to make him or her identifiable. Mr. Shine may now commence his presentation.
Mr. Donie Shine
Thank you, Chairman. I thank the Clerk to the joint committee for inviting us here today at very short notice. We are no strangers to this venue, and I also thank the members of the previous Oireachtas for backing us on the development plan farmers, for whom we have fought for the past seven or eight years.
On that subject, I would like to make one or two points. I ask those attending today to consider what should be done regarding the 7.1 million gallons that development plan farmers have. We secured that quota, which represents 49% of the difference, but our problem is that it does not have a compensation price tag. Under Agenda 2000, we got 7.1 million gallons, but, under the mid-term review, which brought in decoupling, the milk does not have a decoupling compensation tag. It will be worth extremely little to those farmers who have waited for the past 20 years without such a tag. I ask the committee to talk to the Minister to see what can be done. If we do not get that, the fruits of what we have fought for over recent years will be minimal. It is unjust if we do not get it. I ask the Chairman to convey that message to the Department.
Our plan B today is based on our passionate feeling that the best part of 16,000 dairy farmers will cease to exist within the next three years. One is prompted to ask what might be done. We have drawn up a plan B, which our Teagasc adviser, Mr. Joe Sheedy, will read through. Members may wish to ask him questions on it after his briefing. There is €57.76 million in the national envelope. If that were distributed to the under-60,000-gallon dairy farmers, a 40,000-gallon dairy farmer, for example, would have an extra income of €4,500 - in other words, approximately €100 per week. That is what they would need if we were serious about keeping them in business. What about farmers producing more than 60,000 gallons? Teagasc has said that 68,000 gallons constitute a respectable living. Under that figure, we have problems, as do the co-operatives.
We currently have about 26,000 dairy farmers. Approximately 42,000 or 43,000 have gone since the quota regime was introduced, meaning that a steep slide in their numbers has occurred. Are we to end up with no Minister for Agriculture in 20 years? That is what we face. When the minutes of this meeting are read in 50 years people might say that we missed a chance because we did not listen to the National Milk Rights Group. We will all be doomed for what we do. There is a way out here, however. Members might say that €57 million is not a massive amount for what we attempt. However, it will cost billions to bring people back to the land in 20 years. People will not even come back for the money that we give them. We must hold on to what we have. I do not claim that all the farmers will stay, but we must hold at least 80% of what we have. It is up to committee members to get out and rattle the cage on this issue.
Our group was formed to fight for development plan farmers. Ms Rena Phelan, Mr. Larry Hollywood and I have listened to farmers on the ground for the past eight or ten years. This matter had to come to fruition. We had to go out and do something for those farmers. We are at least telling committee members what is happening. I will not apportion blame, since many people have yet to speak. I would prefer to return to the issue later, Chairman. Perhaps members would like to make some points to me. I thank them for listening to me.
Mr. Joe Sheedy
Mr. Shine had in mind that part of the dairy premia not necessarily earmarked to go to every dairy farmer. No decision has been taken on whether approximately one third of all the dairy premia should go to all dairy farmers across the board or to certain types of producers. The National Milk Rights Group would like the flexible part of that to be geared towards farmers producing less than 60,000 gallons. Option one would be paying the whole national envelope across the board, which, in 2006 would be 16.6 cent a gallon. Rather than give everyone the full premia, we suggest that the third which is flexible and falls within the discretion of the Minister and the Government be given to all farmers producing under 60,000 gallons, while those producing more than 60,000 should get only the flat part of the premia. For example, in 2006, that would be 11.4 cent a gallon. Farmers producing less than 60,000 gallons would get 19.6 cent. In other words, we are suggesting using the greater part of the flexible money. It is hard to know how much milk is being produced in each area, but we have had a shot at it. It seems that, in 2006, we could afford to pay premia of 19.6 cent per gallon to all farmers producing less than 60,000 gallons of milk and 11.4 cent to those producing more than 60,000 gallons. As I said, the other option is to give everyone 16.6 cent.
Ms Rena Phelan
I will reiterate what Mr. Sheedy has said. It would mean the difference between farmers in that category being viable or exiting in the industry. Since the money is not targeted at any area, the flexibility is there to do so. Those farmers are the most vulnerable. They are the very same farmers on whose behalf we worked to secure the 7.1 million gallons. Now that they have that extra quota, they need a support system. It has been recognised that they are the ones who need to have the extra money to remain in business. If we are interested in keeping the rural environment intact, we will have to have some subsidy to keep people on the land. They deserve to have that support system, since they have helped out in several other ways in the co-operative by buying meal and so on over the years. It is almost a matter of entitlement. The money is available from the national envelope.
I welcome Mr. Sheedy and his colleagues. I can well understand their concerns about rural Ireland and farmers producing less than 60,000 gallons. If one examines the current position, one sees that one would have no hope operating under that level unless one had no bank debts. I can well understand the delegation's point of view. It is a new concept. I had not heard of its views before, and I would like to take a little time to examine them. In principle, I agree with what they are trying to do. There is no doubt that those farmers are the ones that need the help. If they are not looked after, the number leaving the land, 16,000, is conservative. Those leaving the land will do so much faster. It is a pity to see what is happening, but the truth must be faced. We are in a decoupling stage. I will certainly try to impress the matter on the Minister and convince him of the delegation's views.
I welcome the delegation. Its brief is fairly comprehensive. I have heard many concerns from the smaller farmer. What the delegation seeks seems to go against the grain of European policy, which is to create major suppliers and put the rest out of business or at least into part-time farming. They really have their backs to the wall. They are swimming against the tide and have a hard battle on their hands. On the element that is flexible, my understanding is that the delegation proposes that it be targeted at the smaller farmer producing less than 60,000 gallons. That makes eminent sense, since there is an onus on us to try to protect rural Ireland. The majority of farmers in it are small farmers, and I come from that background. Officials in the Department, or perhaps a Minister, might say that only a limited amount is available. If the smaller farmer is to get it, it must come from larger colleagues. Many farmers will be reluctant to see a potential part of their quota going to smaller producers. Perhaps the witnesses might enlarge on the 7.1 million gallons allocated by Agenda 2000. Is that not now being included under the new proposals? Is it likely that farmers may not be compensated for that? That is a major issue. If 7.1 million gallons are available, I would support the call that farmers be compensated. The delegation has put a great deal of information before us. I was not as clear about its proposals before I came in as I am now, and perhaps we will learn a little more in the course of the meeting.
I too welcome the delegation. As my colleague, Deputy Wilkinson, has outlined, I fully support them on this matter. I have been speaking to them about it, and it is much clearer today than on the last occasion that I discussed it with them. Their figures are quite good. In my own home county, many of those producers will go out of business unless something is done for them. We have the problem that many of our suppliers are on the periphery of the county and away from the centre of our co-operative. I will be pressing for the Minister to take that into consideration when dealing with the third of the funding that is flexible.
I welcome the National Milk Rights Group and apologise for not being present to hear its submission, but I have their document and will go through it. When I was on my way to the meeting I remembered that I had to do something else and was delayed. Under the Fischler proposals, the dairy industry was hardest hit. We are all aware of that. One matter that may not have been publicised is that we had unique recognition from the EU on our milk production based on the 1984 agreement in that our quota would be on the basis of 1983. With other European countries it was 1982. First, we got 4.5% on top of that quota. The reason we got it was the importance of agriculture to the country and the input of the dairy industry into that sector. Unfortunately, from what I can see, that has now been lost, and we are on a par with other countries, meaning that there is no special place for Ireland.
The witnesses raised two issues, the first being the 7.1 million gallons of milk. I have raised that with the Minister on a few occasions. The standard reply I received was that it was not allowable. It is the figure for milk in 2000, and that is not taken into consideration. There is a natural injustice in that the group fought for that for almost 20 years and, having won that battle, it is now totally useless to farmers.
Last week I raised with Mr. Fischler, who was in Brussels at an EPP meeting, the concept of various people losing out, not necessarily through force majeure - we have seen the recent newspaper advertisements - but through farm practices. A small number of people, in the dairy industry or who sell weanlings and who have never claimed a premium will be disadvantaged. The question is whether anything can be done for them, for example, by way of a once-off payment in the first year or two of modulation or through some other mechanism? The advertisements that have been placed apply to very restrictive categories. However, it is important that the National Milk Rights Group advises its members to contact the Department in response to that advertisement indicating that they do not fit into any of those categories and that there should be another category of, for example, farm practices. That is an issue we will be seeking to push. A few small county groups have been set up. I met a group a short while ago that gave me details on Wexford. The only way the members of the group can be compensated is by being taken out of the national context - I understand there is not much support for that idea in the IFA - or by getting a once-off payment in respect of the modulation or, as mentioned, from the national envelope.
On the issue of farmers with quotas of less than 60,000 gallons, there is something new there. There has always been the impression that the big people will eat up the little people. However, my understanding is that that may not happen. Many people who have a large quota may get out of milk production. It was considered that by 2010 the average quota should be 70,000 gallons. Now the view is that it should be nearer 100,000 gallons. I do not necessarily agree that everyone with less than 60,000 or 70,000 gallons should have to get out of milk production because they will not be able to compete. That is not necessarily true. Commissioner Fischler stated last week that the category of hardship cases had not been finalised. That is why it is important not to throw in the towel and proceed according to what the Department has laid down. It may be finalised early in the new year. I do not want to give false hope, but it is still open at present.
The committee will examine the second issue of how the contents of the national envelope are to be distributed. The Department has a dual purpose, to preserve the countryside and to ensure economic efficiency. Under the former there may be room to discriminate in favour of smaller operators. We will probably have to consider putting money from modulation into projects to keep people in the countryside. Why not put it into the projects we know best and want to do. I once again thank the group for its submission, which we will examine. The group should feel free to call us if it wishes. We can contact the group also and we are aware of the problem.
What is the group's view on the position of the IFA or other dairy farmers? Is there any willingness to accept a cut? I understand that a fraction of a cent per gallon is all that would be required. How many people got milk quota?
Mr. Shine
It was 2,000.
Is that all? What is the group's view?
I apologise to the group for my late arrival and thank them for their presentation. They have made quite a good case and the figures speak for themselves. I want to reiterate what other speakers have said. I agree with Deputy Timmins that the Fischler proposals have the strongest bearing on the dairy sector. It is one of the elements of the debate that was not aired to the fullest extent and the group has my full sympathy in that regard.
Has the group been in contact with the Minister? If so, what was the response?
Mr. Shine
Yes, we have.
We have not finished yet. Has the Senator finished?
I agree with other speakers. I just wanted to condense my contribution to a question.
I apologise for being late but my notice stated that today's meeting was to be at 3 p.m.
I welcome everybody, Mr. Shine, the chairman, and the man from my parish, Martin. I am glad to see them all. We had an ad hoc meeting on Saturday night at which I was well briefed on the needs and requirements of the group.
Was that a special briefing?
There was a special briefing, perhaps like Knock. I understand the group has made an intensive presentation of its case around the country, on which it is to be complimented. There is no doubt about the difficulties. I do not like what is happening. I refer to the talking down of farming by certain people in the media and farming organisations. They believe that one needs a certain scale of operation to be successful. Some of us know that is not true. I fully support the case being made here by the members of the National Milk Rights Group. They have a very sustainable case. What they want will not be easily delivered. However, I have no doubt that their needs are honourable and that a mechanism ought to be found to address their case. It is something to which we need to pay greater attention at party level in order to achieve it.
I repeat my welcome because when Martin goes back to the Shannon he will say he was either welcomed well or not.
Mr. Shine
What the members of the committee are saying, and what we are asking for, is a suitable mechanism to address our case. The Minister has indicated that no definite decision has been taken on whether the envelope will be applied to all producers or to certain types of producers only. We reckon that we should be included and that is why we are here today. What we are trying to do is latch on to this €57 million that would make those 16,000 farmers reasonably viable. Finding a way to do this is not rocket science. If we do not do it we should just shut up and forget about it. This is our last hurrah. This is the last time a group like this will come from the soil to the city and to the Dáil. The Minister's cage has to be rattled on this. Some kind of mechanism must be found we have a moral duty to do something for those people. It has been suggested that they should get a part-time job. Many of those people cannot go outside their own environment because they know nothing other than farming, and that is no disrespect to them. Farming is bred into their genes and the Government has a duty to keep them on the land. It is stated in the Constitution that as many farmers as possible should be kept on the land. We have a trump card here and if we do not use it we will be doomed.
Mr. Joe Sheedy
There is a huge campaign on the size of quota that will be needed in the future, as anyone who reads my column in the Irish Examiner will know. Everybody concerned, including the IFA, are of the view it will require €138,000 to fund 40,000 gallons of milk production for a farm to be viable in the future. According to the small print in the Teagasc documentation - I am an ex-Teagasc employee and I have all these figures at my disposal - a person will need an income of €138,000 if one is an inefficient farmer, but an efficient one will need only approximately €60,000 to €68,000 to provide a good family income.
Some of that would be put back into the farm?
Mr. Sheedy
Yes. The reason we came up with the figure of €60,000 - which is not sacrosanct - is that if farmers aged 30 or 40 are given a chance to develop their farms they will be viable. The day is gone when a teacher, a bank official or a member of any other profession could get married, build a house and survive on one income. We do not want to give an income to every dairy farmer who can keep himself, his wife and five or six children, but perhaps he could be given sufficient funds to ensure he has decent standard of living - as good as he would get from working in any other profession - from farming, which is much more enjoyable than other professions, for those who like it.
Mr. Larry Hollywood
Deputy Timmins spoke about the IFA and the ICMSA. The IFA was formed to ensure fair play for everybody concerned, but what it proposes now does not represent fair play; it would not stand up to challenge. We are here today to make our case for those people.
Does any other member of the delegation wish to contribute? Do members have any supplementary questions?
I would like to make a brief point. I said, as did Mr. Sheedy, that there is a place in Irish farming for small producers of any category in farming. However, there is a campaign to encourage people out of farming which is to the detriment of rural Ireland. It will take a political decision, if possible, to gain what we would all wish to achieve. I am sure that would be the view of Members on all sides of the House. None of us wants to see rural Ireland impoverished of its people. There is a sustainable argument to be made in this case for the need for positive discrimination towards a small producer to enable him to continue to actively produce for as long as he wishes to do so.
Mr. Sheedy
I agree we should try to keep as many viable farms as possible, but some people are of the view that we should not continue the suffering of some people who want to get out of farming. Some 5,000 or 6,000 farmers will probably get of out farming for social and other reasons. I had many dealings with Teagasc advisers and we talked to some of them the other night. We are aware that some farmers have been waiting for two years to get out of milk production for different reasons, but they have been told that if they get out of it before spring 2005 they will not get any premia. Everybody concerned is waiting until 2005 for that, following which they will get out of dairy farming and milk production. A few hundred million gallons of milk quota will come on stream in 2005. A farmer could not buy a quota of 20,000 gallons in one year, but he could buy a quota of 5,000, 6,000 or 7,000 gallons one year and buy a quota of another 5,000, 6,000 or 7,000 gallons another year without incurring extra expense.
We suggest that the national envelope for 2004 of 19,000 million gallons of milk quota, plus perhaps a little out of the envelope for 2005, could be used to give an incentive to people who want to get out of milk production in the coming year, rather than to keep some producers hanging on suffering, as many have for the past three years. That is our proposal. The Minister would have to get permission from Brussels to use the money for that purpose as distinct from the other purpose intended. We are not trying to force or encourage producers to get out of milk production but we want to let some of the producers get out of it. I spoke to many advisers in recent weeks and they all said that everyone concerned is hanging on in milk production until spring 2005 and many of them are suffering. Some of them have bad facilities and nobody to milk their cows. What I propose is that some of them should be given a chance to get out of milk production. This topic is different from the one we were talking about, although it is about much the same topic. That is our other suggestion.
Ms Phelan
This proposal is to give these farmers a choice if they wish to exit from such production in 2004, but they would have to get a rate of €2 plus. That would be possible if some money were also taken from the envelope for 2005.
The rate is €1.41.
Ms Phelan
It is €1.41 and they should be given a top-up as an incentive should they wish to exit from such production. That should be an option, a choice.
Yes, to give them the option or choice.
Ms Phelan
Yes, but we also want to try to sustain as many as possible within the farming system. That is the principal objective.
Mr. Shine
I thank the Senators and Deputies for listening to us attentively. In terms of what we have said coming to fruition, we are heartened by what the members said. It is time all heads got together and compromised to achieve what we have a moral right to. I wish the members a happy Christmas and new year. I hope the Chairman might call us back for the finale come St. Patrick's Day to inform us of something constructive that can be done for the people of Ireland whom we represent.
I thank Mr. Shine for that and we will send the group's submission to the Minister and his officials. We will also invite the officials to appear before the committee to discuss this situation. Is that agreed? Agreed.
Mr. Hollywood made a point regarding the IFA. When we have representatives of the IFA before the committee on the next occasion we should also raise this matter with them.
Yes, certainly. We will notify the group of that meeting. Representatives can attend and sit in the Visitors Gallery, as they have done on other occasions. Are they happy with that suggestion?
Ms Phelan
Yes.
I thank the delegation for attending the meeting and making the presentation. We have met the representatives on numerous occasions and it is always a pleasure to meet them. I hope some conclusion can be reached in this case. On behalf of the committee, I wish each and every one of them a happy Christmas and let us hope the new year will be more successful for them.
Ms Phelan
I thank the members for being so positive in their support. All members have shown support for us in their speeches. That gives us the message that we can tell our members over Christmas that there is hope. I thank the members for listening to us, for inviting us here, which is always a pleasure. The committee has always been very accommodating. I thank the members and wish them a happy Christmas.
Sitting suspended at 3.18 p.m. and resumed at 3.21 p.m.
We will now recommence the meeting. Is it agreed that we should go into private session? Agreed.
The joint committee went into private session and adjourned at 3.40 p.m. until 2.30 p.m. on Tuesday, 20 January 2004.