I thank the Chair for allowing me to raise this matter on the Adjournment and I thank the Minister for coming in to reply to it. I am not sure which of the briefs the Minister for State at the Department of Foreign Affairs is holding, whether it is the Agricultural brief or the Justice brief. However, we will proceed and see if he can elicit some semblance of a response to this motion.
The orderly development of the co-operative movement in rural Ireland has been a matter of pride to all of us who have an interest in the agricultural sector. We have had a particular pride in the processing sector and we have always advocated the fullest support for that sector. The processing sector in the dairying sector is one that assembles and adds value to one of our natural national resources, that is our dairy produce. In this regard dairy produce, or liquid milk as it is in this instance, is of particular interest. It is one of our most plentiful supplies and also one of our most rewarding enterprises for those involved in the agricultural sector and because of this milk, particularly in the Munster area from which the Minister and I both come, is of keen interest at the moment.
Because of this plentiful supply co-operatives have invested a lot of space and money in increasing handling and assembly facilities throughout the country. This development was grant-aided to a large extent by the Department and by the EC which basically is taxpayers money which has been put into the handling facilities in various co-operative movements. Then suddenly all the rules seemed to have changed. Producers were confronted for the first time by the super-levy, which was initiated in the European Community and which now effectively precludes efficient milk producers from increasing their milk production. This has led in recent months to co-ops in the Munster region entering into what is now being called the milk war. That means that Kerry Co-Op, by coaxing suppliers through various methods which I will deal with in a few moments, have now taken approximately 2,500,000 gallons of milk from the Golden Vale Co-Operative. One can argue that suppliers have a right to sell their produce to the best possible market but this must be done within the law and having regard to the full implications of that action. One of the implications is the possible consequential loss of employment in the co-op which loses its milk.
Golden Vale who at present employ about 980 people, have a milk in-take of approximately 90 million gallons per day. They will loose approximately ten employees for each million gallons lost in this war and because of under-utilised and increased capacity in Kerry Co-Op, no corresponding increase in employment is likely to take place in that creamery. Perhaps there might be an additional few members who would be employed in the collection process but there will be no corresponding increase to compensate for the loss in the Golden Vale area. Because of that members of my party and, indeed, members of the trade union movement are extremely concerned that some order will have to be put into this area and into the supply of milk to various co-operatives.
The House will be aware that the Minister for Agriculture stated publicly recently that he is considering extending the period of notice by suppliers of their intention to change from one co-operative to another. The Minister mentioned a possible extension of such notice from three to 12 months, which I welcome. The Labour Party Agricultural Committee, of which I am a member, also welcomes this. In the interim period we are concerned — in order to prevent loss of employment — that the present purchase of milk on a flat or volume basis be investigated.
I am not sure what brief the Minister of State holds but I contend that the present purchase by Kerry Co-operative of milk from suppliers to the Golden Vale is on a volume basis and that under the Food and Drugs Act it is said to be illegal to sell milk to creameries or liquid milk outlets unless it has been butter fat tested and have not less than a 3 per cent butter fat content. If my information is correct the purchase by Kerry Co-operative of milk from any supplier and the sale to Kerry Co-operative by suppliers on a flat rate basis, would be contrary to the provisions of the Food and Drugs Act.
I should like the Minister to state if he is aware that that type of purchase is taking place, if he is aware whether Kerry Co-operative are testing such milk for butter fat content at its source of purchase and, if not, what steps he intends taking to ensure that suppliers and purchasers comply with the relevant section of the Act, that is if my information is correct.
I would request the Minister to ask An Foras Talúntais to carry out a full survey of the employment and other consequences on the milk industry as a whole of this type of milk poaching. Perhaps a pilot study should be undertaken by An Foras Talúntais, particularly in the Munster region with which the Minister and I are familiar. It is a matter which has been of concern to all of us. We accept the principle that suppliers should be able to choose the best possible market. But suppliers will realise that, if they do not have regard to the overall consequences of their actions, efficient creameries, like Golden Vale, could be forced to rationalise their enterprise, to lay off workers in a particular region which would not necessarily be compensated for in another. Indeed that could lead to a monopoly situation in the milk assembly industry which would not be in the best overall interests of suppliers, farmers and producers. I have no axe to grind with any particular co-operative enterprise. But if there is not some sense of order brought into this situation the strongest will be seen to have survived and the weakest suffered. From an employment point of view the consequences would be extremely worrying to those of us endeavouring to ensure a spread of employment throughout the region.
I would ask the Minister of State to take my suggestions into account, to advise me if the Food and Drugs Act does specify that testing must be carried out and to consider the request that An Foras Taluntais be asked to undertake a scientific study of the implications of what is taking place in this area. Because of the implementation of the super-levy the larger co-operatives, with extensive space available, are now entering a cutthroat situation in which the fittest will survive and, if the weakest suffer, that will mean that all of us will suffer likewise. This would be catastrophic for this sector of the industry which we are all committed to seeing develop further. Such development would suffer also as a result of this type of milk war going on, with farmers, for short term gain to themselves, cutting off their noses to spite their faces. The Ministers for Justice and Agriculture have a responsibility in this area. In replying the Minister of State might indicate whether my information is correct.
