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Seanad Éireann debate -
Tuesday, 5 Jul 1994

Vol. 140 No. 19

Milk (Regulation of Supply) Bill, 1994: Committee and Final Stages.

Government amendment No. 1:
In page 3, subsection (1), line 20, after "products (1)" to insert "as modified by Council Directive 92/47/EEC of 16 June 1992 (2)".

Under section 1 of the Bill the definition of EU Directive 92/46/EEC, laying down the health rules for the production and placing on the market of milk and milk based products, must be amended by the addition of the words "as modified by Council Directive 92/47/EEC of 16 June 1992 (2)". This arises because the Bill requires that establishments in which milk is pasteurised for liquid consumption must be approved under the directive. However, there is provision under EU Directive 92/47/EEC for temporary and limited derogation from the full provisions of the directive until the beginning of 1998.

Inspections of establishments carried out in implementing EU Directive 92/46/EEC revealed that some of the smaller ones did not comply fully, and Ireland has recently obtained EU Commission approval to avail of derogations under EU Directive 92/47/EEC in these cases. In order that these establishments may lawfully continue in operation it is necessary that the Bill be amended to take account of the fact that they are operating under this derogation.

Regarding derogations, is the Minister aware of how many milk pasteurising plants will not qualify under the directive and is he satisfied that all such plants can avail of the derogation? It would be very serious if it became apparent that some pasteurising plants would not qualify under the new regulation and would not obtain a derogation. Will the Minister advise how many plants would be on the border line, who has authority to grant the derogation and would it have to be approved by the EU?

The inspections are ongoing and will take some time to complete. The vast majority of plants are up to standard and there would only be a handful to which the derogation would apply. The procedure in respect of any plant requiring derogation is that the Department would make an application to the EU Commission seeking a derogation.

Is it a full derogation?

A serious situation could develop for some plants regarding this matter. Having read the Bill I was unaware of this as it was not pointed out in the Explanatory Memorandum accompanying the Bill or in the Bill itself. Presumably under EU regulations the amendment must be inserted, but hopefully the Department will be sympathetic to some of the plants which cannot reach the standard, that a period of time will be granted to them to do so and that they would be entitled to the derogation until the standard is increased to the required level.

I do not have any objection to the amendment, but a question arises — and it is a matter to which I alluded on Second Stage — regarding the degree of conformity with EU Directives. The Bill as originally drafted referred to EU Directive 92/46/EEC. Another directive has now been introduced which is contingent on it, EU Directive 92/47/EEC. Hopefully there are no EU Directives 92/48/EEC, 92/49/EEC and 92/50/EEC hidden in the undergrowth of which the House is unaware.

There is a small figure (2) placed at the end of the amendment. In the original draft of the Bill, where a small figure (1) appeared, an explanation was provided. There is no mention in the amendment to what the small figure (2) refers. Will the Minister clarify this point because given that the figure is in the amendment, the reference should also be included?

My understanding is that the number (1) is in line 20 of the first page of the Bill, is that correct?

Line 20 of the Bill, as drafted, contains the small figure (1). At the bottom of the page the figure (1) appears with the following reference: "OJL.268/1 of 14 September 1992". However, in amendment No. 1 the small figure (2) appears but there is no such reference at the bottom of the page. I hope we do not have to go back to the Dáil because of this deficiency.

It has not gone to the Dáil yet.

I understand that there are two versions. In the printed version I have, there is an explanation for the references (1) OJL.268/1 of 14 September 1992, and then (2) OJL.268/1 of 14 September 1992.

It only has to do with documentation?

It is the same.

That is fine. Could the Minister deal with the question about directives and the degree to which we are implementing them or otherwise? What is our record in that respect, and will other directives relating to this Bill come out of the undergrowth?

I am informed the matter does not arise under this Bill.

Amendment agreed to.
Government amendment No. 2:
In page 3, subsection (1), line 33, after "Directive" to insert ", including milk to which has been added flavouring, vitamins, minerals or other substances, provided that these substances are not used to replace in part or in whole any milk constituent".

In section 1 the definition of "heat-treated" milk is amended by the addition of the words "including milk to which has been added flavouring, vitamins, minerals or other substances, provided that these substances are not used to replace in part or in whole any milk constituent". This amendment will broaden the range of products — that is, whole milk, semi-skimmed or skimmed milk — for liquid consumption to which the Bill already applies. Contracts for the supply of milk tend to specify that only milk which is actually used for liquid consumption will be paid for at the higher liquid milk price, the balance being paid at the manufacturing price. Products such as flavoured and vitaminised milk are becoming popular and are accounting for a growing share of the drinking milk market. Accordingly, it is considered equitable that they will be recognised as milk for liquid consumption under the Bill. We are merely taking account of some developments in the industry where flavourings, vitamins or calcium are added to milk. There is a growing market for these types of milk, especially flavoured milk which is becoming popular in schools. It was for that reason that this addition was added to the designation of milk.

I agree with this amendment because, as the Minister has said, there is an added market there which is in competition with mineral waters and other drinks. When we speak in terms of added value, the product must be manufactured to the consumer's taste.

Amendment agreed to.
Section 1, as amended, agreed to.
SECTION 2.
Question proposed: "That section 2 stand part of the Bill."

Section 2 (2) states that:

The Agency shall comprise a chairman and members appointed as representing the interests of producers, processors, distributors, retailers and consumers of milk.

What has the Minister in mind in respect of this type of representation? The Dublin Milk Board, as constituted at the moment, represents the trade by and large. As regards extra representation, there seems to be a deviation from that which now exists in the Cork and Dublin District Milk Boards.

This matter is covered in section 2 of the Schedule to the Bill. It is envisaged that the agency will comprise the following: one part-time chairman, five producer members, four processor members, one retail member, one distributor member, and one consumer member.

The producers and retailers have their own organisations but how will the consumer member be appointed and by whom? What criteria will be used to appoint a consumer member because everybody is a consumer of milk?

They are indeed. We, in Ireland, are very high per capita consumers of milk; only Finland is higher. The consumer member will be appointed by the Minister on the nomination of consumer interests. I will invite nominations from various consumer interest groups around the country to ensure that there is balance on the board and that it will not be confined to producers and distributors. The consumer member will be there to ensure that those who drink the product — the most important section — are represented.

Am I correct in stating that all appointees are made by the Minister on the nomination of the interested groups? If so, this means that all the appointees are nominees of interest groups.

No. The part-time chairman will be appointed by the Minister; the five producer members will be appointed by the Minister on the nomination of farming organisations; the four processor members will be appointed on the nomination of processors registered with the agency; the one retailer member will be appointed on the nomination of retailer interests; the distributor member will be appointed on the nomination of the distributor interests and the one consumer member will be appointed on the nomination of consumer interests. In other words, they will all be appointed from nominations to the Minister, except the part-time chairman.

Could the Minister clarify the position in respect of people who are nominating one member of the board? Do they have to submit a list of names from which the Minister will draw one? Can the consumers nominate a particular person or will the Minister request them to submit a list from which he will select one person?

I do not envisage any complication with that other than if there is more than one nominating body or interest group. The situation with regard to the consumer member is straightforward since there is the Consumers Association of Ireland, but over time there may well be other interest groups. The distributors have their own association as do the retailers. We do not envisage a panel of members from which the agency would be appointed. We will invite a recognised association to nominate a person to be appointed to the agency and then have them so appointed.

How does the Minister propose to appoint the five producer members? Does he intend asking the farming organisations to nominate and, if so, what organisations will nominate and how many people will be nominated by each farm organisation?

I had intended asking the same question as Senator Neville. What type of producer organisations would be nominating potential members of the agency for approval by the Minister? There are many farming organisations involved in milk production — for example, the Friesian Breeders Society. Will they be able to nominate persons to be appointed to the agency by the Minister?

There will be five producer members who will be elected on the nomination of farmer organisations, for a maximum of 12 months. These organisations will include the main ones and some others. After the first 12 months, the five members will be elected by producers registered with the agency. When the agency is set up, farmers who are liquid milk producers will become registered and will elect their five members. As I said, the first five will be elected on the nomination of various organisations, including the main farming organisations, but this will only be for a temporary period of 12 months. From then on the liquid milk producers who are registered members of the new agency will have their own election to appoint their five members.

At present, Dublin and Cork District Milk Boards are separate organisations. There will be a problem selecting the members of the new agency. How will they be selected? Who will be given priority? Two boards are being made into one. Five members will represent producers. There are three organisations representing producers, the ICMSA, the IFA and Macra na Feirme. I see a problem in relation to the producer members. Heretofore, the liquid milk producers of Leinster and Cork were represented on the Dublin and Cork District Milk Boards, respectively. This was simple and easy to manage. I declare my interest by saying I am a liquid milk producer and served on the Dublin board for 14 years.

The ethics Bill is in early.

It is only right that I should declare this. I did my duty as any public representative should do. I can see a problem in merging the Dublin and Cork boards and finding five members to represent the producers. The ICMSA, the IFA, the Leinster Milk Producers and Macra na Feirme will each believe that they have the right to represent the producers on the board.

Bertie Wall.

Must somebody be a registered liquid milk producer before he or she can represent producers on the board?

I should also declare my interest. I am a liquid milk producer but, unfortunately, I could never become a member of a board because I lived outside the Dublin and Cork District Milk Board areas.

We will get the Senator on the new board.

I do not have any interest in being appointed to the board. Senator D'Arcy spoke about liquid milk producers and whether the Dublin and Cork District Milk Boards would be represented. The Minister spoke about the farmer organisations and Senator Neville mentioned Macra na Feirme. The breed societies are also important, particularly the Friesian Breeding Society. Milk is mostly produced by Friesian cows and we should also consider allowing the Friesian society to submit nominations.

The Minister will have to consider increasing the number of members on the board.

What about the Goat Breeders Association?

My only interest is in the appointment of members to the agency's board for the initial 12 months to have geographic balance by ensuring that Limerick, Galway, Cork and Dublin are adequately represented. For a person to be eligible for appointment, he or she has to be a registered milk producer.

A registered liquid milk producer?

Absolutely, and registered with the agency.

They are completely different definitions.

After the first 12 months it will be a matter for the registered liquid milk producers, as part of the agency, to have their own elections and their own people appointed.

When these elections take place? Will they be conducted by the agency?

Yes, that is what is envisaged. I assume it will be a similar system to the outgoing one. On this occasion there will be one National Milk Agency whereas in the old days there were two bodies, the Dublin and Cork District Milk Boards.

What about the strawberry growers who turn strawberries into strawberry milk?

The Bill states that "every election shall be held and conducted in the prescribed manner". What does this mean? Does the "prescribed manner" relate to the present position?

The same system is envisaged here as has been the case until now. "Prescribed manner" means "as prescribed by the Minister of the day".

Question put and agreed to.
SECTION 3.
Government amendment No. 3:
In page 4, subsection (3), line 42, after "effect" to insert "subject to subsection (7)".

The purpose of this amendment is to clear up any ambiguity about how the proceeds of the sale of the boards' ancillary business should be utilised. Among other things, section 3 (3) provides that section 4 of the Milk (Regulation of Supply and Price) Act, 1941, shall continue to have effect notwithstanding the repeal of that Act by this Bill. One of the provisions of that Act is a requirement that any money remaining in the hands of the Minister after disposing of the assets and discharging the liabilities of an abolished board, shall be applied for the purposes of agriculture or other rural industries within, or in connection with, the abolished board's production area. However, section 3 (7) of the Bill provides that all money received by the Minister on the sale of the boards' ancillary business shall, after payment of necessary outgoings, be paid into or disposed of for the benefit of the Exchequer. This amendment removes any ambiguity by making it clear that the disposal of any proceeds from the sale will be governed by section 3 (7) of the Bill rather than by section 4 of the 1941 Act.

While there may be an immediate positive financial balance on the sale, because the proceeds of the sale are likely to exceed the cost of the voluntary redundancy package, this is not likely to be the case over time when account is taken of the assumption by the Exchequer of responsibility for the superannuation rights of all the boards' staff in respect of their service with the boards. In the first place, the Exchequer will have to meet the cost of pensions for about 50 people from the time they go on voluntary retirement until they reach normal retirement age. Second, the Exchequer will take over responsibility for the superannuation rights of all the boards' staff from their normal retirement date. It is estimated that the pension funds which the Exchequer will take over will not over time be able to finance those superannuation rights. Accordingly, what seems to be an immediate positive net balance from the sale is likely to prove a negative net balance in the longer term. It is extremely unlikely, when pension and superannuation matters are taken into account, that there will be any surplus cash for redistribution in this instance.

I disagree with the Minister's assessment of the situation with regard to superannuation rights and pensions. In the 1970s, the Dublin District Milk Board acquired a very large 450 acre farm in County Meath and spent £1 million on the construction of a bull station and £1 million on bulls. I am not sure what the assets are at present but my understanding is that the redundancy payments are costing the Exchequer in the region of £1 million — these are the Minister's own statements — after that, it is only responsible for pension funds into which people have paid over a very long period of employment.

I am very worried by this section and the Minister must also be worried when he is trying to insert this amendment. I am worried that the Exchequer will have the authority to take over funds which are in excess of the expenditure on redundancies and pensions.

I cannot put a value on the assets but I have no doubt that the Department has valued them. I spoke to some of the people this morning. There is a huge farm, the bull station and 60 to 70 bulls worth in the region of £3 million to £4 million; there are also five or six other stations and ancillary items in respect of the property of the board. The Minister and his officials know that not one penny of taxpayers' money went into the Dublin or Cork District Milk Boards. It was financed mainly by the farmers but it seems that the return from this asset will go into the Exchequer. I do not approve of that because there is an enormous need for investment in research and development, particularly in respect of artificial insemination.

The Department must take some blame for the current backlog. The Minister stated in his speech on Second Stage that the board lost £500,000 over a period of five years. However, the Department must take some responsibility for the five years of uncertainty where nobody knew what was going to happen. We knew there was an EC regulation under which the board had to be dispersed and put into private hands. However, the Department spent five years negotiating with these people. I know it was not all his Department's fault — the Department of Finance dug in its heels and refused to give these people the same status as civil servants.

As a result of the time lag in reaching the agreement a great deal of damage was done to the service itself. I am a user of the service and feel very strongly about this. The Minister and his Department know that cattle are being purchased from Germany, Holland, France and elsewhere because of poor quality straws from the AI stations in this country. Research and development did not take place over the period.

The Minister stated that he believes the assets of the board, once the pensions and redundancy packages are paid, will be a minus rather than a plus for the Exchequer. I do not accept that because there are between £5 million and £10 million worth of assets to be disposed of by the board. The Minister is appointing three people from his Department to oversee this in the interim period, and I accept that is normal procedure. However, I am not pleased that a penny of this money should go back to the Exchequer.

When I was on that board in the early 1970s, the Department of Finance did everything it could to stop us purchasing the farm in Meath. As I had a very friendly relationship with Mark Clinton, the then Minister for Agriculture, I was able to walk into his office and persuade him. He said to me, in front of his officials, not to come back looking for money. I told him we did not want his money as we could produce the money ourselves, which we did. We sold 50 acres of the land in Balgaddy, bought a 450 acre farm in Meath and spent £1 million on a bull station which was paid off within a few years. The trouble only began when the uncertainly set in and that uncertainty will remain until this Bill goes through.

The Minister should protect farmers' money. The Exchequer is entitled to take its expenses for redundancy payments and pensions. However, it should not be allowed to confiscate money as it never contributed a brass penny to the development of the board. I make those points in the light of my experience of having been a member of the board and a user of the service.

While we all recognise that there was a delay, we are all happy that everything worked out to everyone's satisfaction. Senator D'Arcy mentioned that the Department dragging its feet was the cause of so many cattle, especially breeding cattle, being imported. I do not agree with importing cattle, especially Friesians. There is poor quality semen in the AI stations because of the uncertainty that prevailed. However, there is good quality semen available which farmers may purchase. It need not come entirely from the AI stations. Other agencies are providing good quality semen which would produce better cattle than those which are being imported.

I support what Senator D'Arcy said. I am convinced that the moneys which accrue from this should be retained within the Department, especially to research the whole area of disease. As we are aware, there is a great deal of concern in the farming community and the Department about the importation of cattle because of the new regulations. Any available money should be used to ensure that we do not overexpose ourselves to the disease levels of some countries in Europe, which is the way we are going. The money should be used to improve and further agriculture, an important industry, and to research the implications of exposure following the change in the rules with regard to the importation of cattle.

I am not quite sure if the controversy in relation to the importation of cattle has a great deal to do with this Bill. I agree that we have first class cattle and many of the cattle which are imported are not of the high quality which is available in Ireland. There is a kind of inverted snobbery about this question of farmers importing cattle and I know they go very long distances and they pay large amounts of money for embryos.

In relation to the Bill, the first immediate draw on the money is for the lump sum payments for those taking voluntary redundancy which is estimated at £1 million; the second draw on the money will involve the liability for staff pensions. There will not be enough in the current pension fund to meet these draws. We got an actuary to estimate the shortfall and he said it will be in the region of £3 million. That is a total of £4 million. We also have employed accountants who got estate agents and auctioneers to assess the value of the assets, which remains confidential because they will be put up for competitive tender. Based on the liabilities, as has been shown to us by actuarial assessment, and the estimated value of the assets, it is our information that there will be no net assets available or surplus cash.

I am extremely worried by such statements. The Minister said there was a shortfall of £500,000 over a period of about four years and that the place is over-staffed, which I accept. According to his figures, if the board continued to operate in this way, it would be completely insolvent. I do not accept that. Although I am not a director at present, milk producers have a director representing them on the board and I have not received that information. Had things been put right five years ago, the board would be making a profit now.

All 125 employees of the Dublin and Cork District Milk Boards are making a contribution to their pension but the State also has a duty to make a contribution. If in his calculations, the Minister did not take into account the contributions made by the employees over the years — some are near retiring age — then the figures are coming from the wrong direction. This assessment does not seem fair.

It is worrying to hear the Minister say it is his belief that liabilities outweigh assets in the Dublin District Milk Board. I presume the same situation applies to the Cork District Milk Board because both are run on the same basis. During my term on the Dublin District Milk Board, borrowing was low, the operation was well run and contributions were made by producers each year and the board could finance the purchase of a farm, the building of a station and the purchase of bulls. Listening to the Minister I realise there is something wrong here of which I am not aware. I will check with our representative on the board to find out what the position is in respect of the Dublin District Milk Board. We must get an accurate assessment of what is happening. The Department of Finance never helped the board; in fact, it was a great hindrance. It is using its own valuers and assessments and using the figures to suit itself.

The Minister said there is a £3 million shortfall for pensions and £1 million for redundancies, totalling £4 million. Does that figure take into consideration pensions contributions made by employees of the Dublin and Cork District Milk Boards? The State must also make a contribution because it enjoys the money, while people wait for their pensions. Were the State's and the employees' contributions taken into account in the calculations?

I introduced this Bill to the House two years ago. At the request of Senators, I negotiated with the staff of the Dublin and Cork District Milk Boards to reach a consensus and agreement on where we should go. After two years of talks, we reached agreement. This allowed me to reintroduce the Bill to the Seanad. Everything was done with the agreement of the staff.

As regards pensions, it was not a Department of Finance estimate; this was done by an independent actuary. The findings were agreed by the staff and the board. Contributions were taken into account but there was a gap between contributions and liabilities. It was estimated independently and objectively that the gap would be approximately £3 million and that was accepted by the staff and all those concerned.

It is disturbing to hear the Minister say that. Something has gone wrong since I left.

Obviously the board is missing a good member.

That figure is disturbing.

Amendment agreed to.

I move amendment No. 3 (a):

In page 5, between lines 29 and 30, to insert the following new subsection:

"(7) Each member of the staff shall be furnished with a personal guarantee signed by or on behalf of the Minister covering all guarantees to each transferee, including the right to return to the public service in the event of the failure of the new employer.".

The Minister is aware that lengthy negotiations took place in respect of staff. The staff of the Dublin District Milk Board was, and still is, one of the best in Ireland. I accept that it may be over-staffed at present because of the uncertainty over the five year period to which I referred. These people have worked night and day. The only two days on which this service was not available were Christmas Day and St. Stephen's Day. The AI stations were used each day of the year and provided a valuable service for farmers.

I want to ensure these employees are protected when it comes to pensions and redundancy rights, although the Minister may say the Bill covers that. However, on behalf of the staff, I ask him to insert this simple amendment which will not cost him a penny but will give the staff a written guarantee from the Minister that they will get their pensions when the time comes.

I draw the Minister's attention to something pointed out to me by a Minister in this Government which I found disturbing. The Minister for the Marine, Deputy Andrews, recently stated on radio in relation to a query concerning B & I employees that he was not responsible for any commitments made by a previous Minister during negotiations for the privatisation of that company. That is worrying for staff of the boards. It only come to light in the past three days as a result of the statement made by the Minister for the Marine.

Many employees have given 40 years service to the Dublin District Milk Board and are now entitled to their pension. However, I am worried about the 70 members who will transfer from the Dublin and Cork District Milk Boards to the private sector. These people have worked hard, night and day. Although they start work at 7 a.m., the last artificial insemination may not be carried out until 10 p.m. I appeal to the Minister to include this amendment to safeguard these people and their families in view of the prevailing circumstances and the statement made by the Minister for the Marine, in particular within the last fortnight. I tried to get the reference for that statement this morning and I will try again if it is required by the Minister.

The Department spent the past two years negotiating with the staff. I had no difficulty with that and I told the House I would return after agreement had been reached with the staff involved. Although it took two years, we did reach agreement on the grounds that the rights of staff transferring to the private sector were subject to an agreement with the trade union.

A comprehensive agreement on all staff matters was reached between the Department and the staff under the auspices of the Labour Relations Commission. The terms of the pension rights are clearly outlined in section 4 of the Bill. All concerns have been examined in great detail and agreement reached on them. I cannot, therefore, accept this amendment.

We are not asking for more than the existing agreement and the Minister has accepted that. Since there is enormous uncertainty and insecurity in employment generally outside the public sector, it is not unreasonable to incorporate some guarantee for employees in this legislation as it makes a fundamental change to their position.

The Minister seems to have no problem with the detail of Senator D'Arcy's amendment. We ask him to incorporate this amendment in the legislation, just as he incorporated the changes to the boards and the other changes necessary for the amalgamation of the two public organisations. It is not unreasonable that the staff be given the security of legislation to cover the changes to their conditions of employment.

While this request does not have financial implications, it is very important to the employees who are being transferred from the public to the private sector. In terms of security there is a big difference between working in the public sector and in the private sector. It is totally different. The laws of trading and commerce apply more rigidly and have more effect in the private sector. The private sector is obliged, because of its vulnerability and exposure to commercial forces, to respond to change.

The concern of these employees is understandable, regardless of any agreement. Agreements are made and changed all the time. However, this agreement could be enshrined in legislation. If the Minister is concerned about making an indefinite commitment, the guarantee could be confined to current employees and future employees need not be covered by such a regulation. Many of the difficulties would then be overcome and the current employees would not feel as vulnerable or insecure about their transfer from the public to the private sector.

As Senator Neville said, this amendment has no financial implications. We are not asking the Minister to add one pound or one penny to what he has already included in this legislation. We are asking for guarantees. The Minister may say that negotiations were carried out on his behalf but I have spoken with the unions and they are very worried. They asked me to propose this amendment which would give the employees some guarantees.

The Minister should have no problem with the amendment as the legislation has yet to go before the Dáil. If it had been before the Dáil, the acceptance of an amendment in this House would entail returning the Bill to the Dáil for approval. This is not so in this case. The Minister should have no problem inserting this guarantee. As I said, the acceptance of the amendment will not cost anything.

I appeal to the Minister to consider the amendment. I do not want to press it to a vote but I, and those involved, feel very strongly about it. There are 17 employees being transferred from the public to the private sector and all they are asking for is a guarantee. It is not extraordinary but I appeal to the Minister to accede to their request.

The guarantee sought by Senator D'Arcy is for people who have given a great service to farmers and others involved in the artificial insemination of cattle. I am sure the Minister will ensure that their rights are protected and that they get the guarantee without the need for this amendment.

It was my concern for the rights of staff which delayed this Bill. I could have forged ahead with it and said that the position of staff would be subject to a subsequent agreement. However, I decided to get agreement first and then introduce the Bill.

After two years and under the auspices of the Labour Relations Commission an agreement was reached with the staff and their unions. The unions have not been back to the Department expressing concern since the agreement was reached. I would like to read the core section of the agreement which states:

Prior to the transfer, the Department of Agriculture, Food and Forestry will furnish to each employee transferring to the new enterprise a formal written undertaking that, in the event of his/her being made redundant, redeployment in the public sector (as specified at 4.3(e) (ii) above) will be among the options open to him/her. The names and grades of all transferring employees will be registered in the Personnel Division of the Department of Agriculture, Food and Forestry.

There is a gilt edged written agreement which covers all the rights and concerns of the staff. It was agreed by their staff association or union under the auspices of the Labour Relations Commission. I believe that is adequate, as do the staff association or union. I see no necessity for the amendment and therefore have to reject it.

I accept the Minister's statement that there is a guarantee. There is an industrial relations agreement between the employers, in this instance the public sector or the Minister, and the trade union. However, industrial relations agreements can be changed. The employer is entitled to renegotiate any agreement, otherwise industry and commerce would grind to a halt.

Agreements are changed regularly throughout private industry and often must be changed. However, we do not want the Minister to change what has been agreed in this instance. We accept his bona fides but ask him to go one step further to ensure that any future Minister must come back to this House and to the Dáil to change this agreement.

We want to prevent a situation where the new board writes to the trade union saying it has difficulties with the agreement and wants to negotiate to change it. This happens all the time in industrial relations and possibly should take place in a normal situation. Circumstances change in organisations and two to ten years from now circumstances will change within the new organisation. A new board or management might want to change the agreement and under present circumstances they are entitled to do it.

Industrial relations involves free agreement between both sides to a set of regulations or proposals. An agreement is freely entered into by both sides and one side can ask to change it. This happens all the time and is currently being done in TEAM Aer Lingus and in Irish Steel. They are typical examples of agreements which it is now proposed to change. Two or three years ago those employees understood that they had binding agreements; the agreements were as binding as they can be in industrial relations. An industrial relations agreement is an agreement freely entered into under the circumstances which prevailed at the time. We are concerned that a future board and management of the new agency will want to change that for whatever reasons. It should not be changed without coming back to the Dáil and the Seanad. This amendment will not cost the Exchequer a penny but it will give the added security of legislative sanction to the agreement into which the Minister has rightly entered.

As the Minister entered into the agreement prior to coming here, it should be easier to accept the amendment which confirms the agreement he has entered into with the trade union; it is not asking him to do anything other than to give the agreement the status and protection of legislation.

Amendment put.
The Committee divided: Tá, 12; Níl, 25.

  • Burke, Paddy.
  • Cosgrave, Liam.
  • Cregan, Denis (Dino).
  • D'Arcy, Michael.
  • Dardis, John.
  • Farrelly, John V.
  • Honan, Cathy.
  • McDonagh, Jarlath.
  • Manning, Maurice.
  • Naughten, Liam.
  • Neville, Daniel.
  • Reynolds, Gerry.

Níl

  • Bohan, Eddie.
  • Cashin, Bill.
  • Cassidy, Donie.
  • Daly, Brendan.
  • Fahey, Frank.
  • Farrell, Willie.
  • Fitzgerald, Tom.
  • Henry, Mary.
  • Kelleher, Billy.
  • Kelly, Mary.
  • Kiely, Dan.
  • Kiely, Rory.
  • Lanigan, Mick.
  • McGennis, Marian.
  • McGowan, Paddy.
  • Mooney, Paschal.
  • Mullooly, Brian.
  • O'Brien, Francis.
  • O'Sullivan, Jan.
  • Ormonde, Ann.
  • Quinn, Feargal.
  • Roche, Dick.
  • Townsend, Jim.
  • Wall, Jack.
  • Wright, G. V.
Tellers: Tá, Senators Cosgrave and Burke; Níl, Senators Mullooly and Wall.
Amendment declared lost.
Section 3, as amended, agreed to.
Section 4 agreed to.
SECTION 5.
Government amendment No. 4:
In page 7, subsection (1) (b), lines 1 and 2, to delete "the subsequent provisions of this section" and substitute "subsection (2)".

This is a purely technical amendment. In section 5 (1), the words "subsequent provisions of this section" are to be replaced with the words "subsection (2)". Section 5 (1) is a core provision of the Bill which provides that heat treated milk shall not be sold for liquid consumption unless it is purchased either directly or indirectly under a contract registered with the agency. It winds up by referring to exemptions from this provision, which are set out in section 5 (2). There are a further four subsections in section 5 which have nothing to do with the exemptions. It is considered highly desirable, in order to forestall the possibility of a fractious legal challenge at any stage in the future, to make it plain that only subsection (2) relates to exemptions and hence the revised phraseology.

The Minister talks about exemptions in the event of a shortfall of liquid milk being available for Dublin. However, he did not spell out clearly exactly what type of milk could be exempted in respect of this regulation.

Section 5 (2) specifies the exemptions to this requirement in order to cater for islands or other remote parts of the country in times of scarcity for home consumption of milk by producers and for milk otherwise legally imported into the State. The last mentioned exemption is necessary to avoid creating an obstacle to inter-union trade, which would be in contravention of European Union law. This exemption does not alter the competitive conditions under which domestic and imported milk will have to compete. Therefore, it does not place domestic milk at a competitive disadvantage. The exemptions are outlined in section 5 (2).

As it stands, section 5 (2) (c) states "milk pasteurised in a domestic pasteurising appliance for home consumption" while subsection (2) (d) states "heat-treated milk legally imported into the State". What exactly is meant by that? I hope we will not have to resort to importing milk.

I will deal with that point in amendment No. 6.

Are we dealing with amendment No. 5?

We are discussing section 5, amendment No. 4.

We accept amendment No. 4.

Amendment agreed to.
Government amendment No. 5:
In page 7, subsection (2) (d), line 10, to delete "heat-treated".

Section 5 (2) sets out exemptions from the provisions of the Bill. One of these, "(d) heat-treated milk legally imported into the State" is being amended to refer to "milk legally imported into the State". In section 1 milk is defined as raw milk or heat-treated milk. This amendment will mean that not only imported heat-treated milk will be exempt but also imported raw milk intended for heat treatment as drinking milk in the State.

In practice this amendment will merely facilitate the status quo in so far as existing trade in importing raw milk from Northern Ireland for pasteurisation at a few small establishments mainly in the Border areas is concerned. Moreover, without this amendment the provision would be interpreted as making illegal the import of raw milk from other member states. This would be contrary to European Union law.

There are a number of small plants in Border areas which receive their milk from across the Border, sometimes directly from farms there. Nothing can be done about that under European Union law. Similarly, we can export milk, either pasteurised or raw. A number of our co-ops have acquired a fairly large portion of the liquid milk market in the UK and if at any time they wished to export longer shelf life milk by tank or otherwise they would be entitled to do so under European Union law. The same principle applies to the small amounts of milk being imported from across the Border.

My query relates to the milk containers. Is there any policy regarding the type of container used? The Minister was heavily involved in milk sales in his town and county.

The Senator is speaking on the section. Is amendment No. 5 agreed to?

Amendment agreed to.
Question proposed: "That section 5, as amended, stand part of the Bill."

This section is relevant to the type of container used for milk sales. What emphasis is put on the use of glass containers? Plenty of work has and can be created by selling milk in glass bottles. I am annoyed that we do not put enough emphasis on the sale of milk in a glass bottle. It has an environmental benefit because the bottles can be used several times and the use of the glass bottle can create jobs. In County Cork, if only glass bottles were used, the same bottle could be used about eight times. My local dairy puts strong emphasis on the use of glass bottles. Unfortunately, it is not general policy in the country. In America the glass bottle is used and people are conscious of the benefit of its use. It is a policy that creates plenty of work. If this country used glass bottles exclusively about 300 extra jobs would be created. Is there a policy for the delivery of milk in glass bottles? Has the Minister a view on this?

I have strong views on how I take my drink. Naturally, I like it in a glass, usually with ice and water.

I agree with the Senator. The glass bottle is the traditional means of distributing milk, particularly in doorstep deliveries. I would like the average usage figure for the bottle to be greater than eight, although the number can be less than that. If the figure was about ten or 12 it would be a good achievement. The difficulty arose from catering requirements and the homogenisation of milk. Milk deteriorates very quickly in glass bottles; it has longer shelf life in opaque cartons. They are the practical considerations. In addition, advertising and coupons are carried on cartons while it is difficult to put logos on glass bottles. Many practical considerations are involved in this question.

It was always recognised that one could judge the compositional quality of milk from the size of the cream line in the glass bottle. Some people mischievously suggest that the cartons were introduced so that people would not know whether there was fat in the milk; it could not be detected in the cartons. However, the change to cartons is the result of commercial considerations. The plastic bottles are the worst because they are thrown everywhere and add to our litter problem. There is usually no such difficulty with glass bottles.

It is a question for individual dairies. The Senator's local dairy continues to use glass bottles. I do not know to what extent this policy affects its share of the market. I do not have the same personal interest in that area of activity now.

The Minister referred to the environmental situation vis-à-vis the plastic bottle and the commercial value of the carton. However, extra work can be created by, for example, the collection of bottles. Even the milkman admits that his job can be eliminated through the use of long life milk. We have seen it being used in other countries, particularly those with high prevailing temperatures. However, milk from a glass bottle is better, particularly if it is kept chilled. Long life milk is not kept chilled.

In Spain one can purchase milk and use it three months later. That frightens me. More jobs could be lost because the use of long life milk is beneficial to cardboard manufacturers and printers. Can we formulate a policy to emphasise the use of the bottle? Can we, for example, offer milk in a glass bottle at a cheaper price? Can we encourage people to use glass? It creates more work. America is way ahead of us in terms of commercialisation, yet there is an emphasis there on the use of the glass bottle.

Milk in a glass bottle is fresher and people should be made aware of that; it is also beneficial from an environmental point of view; milkmen calling to peoples' houses every morning can keep an eye on the elderly and, most importantly, if we used bottles more people would be working.

The Department and the Minister should be looking for opportunities to use glass. I do not want to give people more opportunities to destroy our environment. We should help those who provide environmentally clean work. Can we encourage, demand or recommend the use of glass bottles? Are we serious enough about this issue?

What are the Minister's view on prices? He said there was a question of price in parts of the Bill but he did not explain what he meant. Does he mean the price to the producer or the price to the consumer? Supermarkets, present company excluded——

Included.

No, I exclude present company in order to be fair. Certain supermarkets, Dunnes Stores in particular, lay low waiting to catch out the co-ops on prices. All supermarkets are in a good position because they enjoy a most unreasonable 30 per cent discount from the co-ops. They also have a period of three months to pay for the milk. They enjoy benefits in buying milk from which the consumer, to a greater or lesser degree, is not benefiting. Supermarkets are scooping the money for themselves.

What control if any has the Department over below cost selling of milk in supermarkets? This is a dangerous practice which has caused great damage in other areas and it should be avoided. I do not laud any supermarket which engages in below cost selling. It may get extra business but it damages the trade to such an extent that the trade finds it hard to recover from it.

We have avoided it thus far although Dunnes Stores tried to take on the co-ops but failed badly. With the exception of one co-op in North Donegal which gave Dunnes a small milk supply which did not last long, the co-ops stood shoulder to shoulder in that period.

On the same issue I have asked this question of another Senator, an operator of a leading chain store, but failed to get an answer. In County Donegal milk, some of which is exported to Northern Ireland is sold at a retail price for two litres of milk of between £1.12 to £1.16, whether in a supermarket or a small shop. Milk exported to the North is being sold according to a newspaper advertisement at 99 pence for three litres in Dunnes Stores. Last week, Wellworths in Strabane sold two litres of milk for 48 pence.

The Senator should go up there.

Why does this happen? The producer does not benefit. I am told the chainstores get a 30 per cent discount, but there is a difference of over 130 per cent between the prices of 48 pence and of £1.16 for two litres of milk. This is a serious discrepancy. Milk is a fundamental family need. Rather than joke about the matter in the House, I ask the Minister to enlighten the people on this differential in prices. I have asked my learned colleague——

Remember the Ethics in Public Office Bill.

——and I have been unsuccessful. I appeal to the Minister to enlighten the people who cannot understand why there is such discrepancy in the price of milk.

I agree that undercutting the price of milk can damage the industry. It may benefit urban areas where people are close to the supermarket chains but rural people with door to door delivery pay more for their milk. It is unfair to have varying prices for different sectors. Because it is a perishable commodity, milk cannot be supplied at a below cost rate to everyone so something should be done.

I did not intend to speak on this Bill but I must say a word on behalf of the shopkeeper. One matter mentioned last week by Senator Kelleher and by others today was a three month delay in payment to the dairies. I am delighted to know of this delay. Now people who do not receive this credit of three months will insist on it in future.

If shops sell milk at too low a price it appears to cause problems for producers. If shops sell at too high a price they are criticised by people like Senator McGowan speaking on behalf of consumers. This area would be better served by less rather than more regulation; it should be left open to market forces. In doing so, we will get a competitive market which will not please both producers and consumers but it is probably the ideal position.

That is my word on behalf of the poor downtrodden shopkeeper, who is never appreciated.

In case the Minister gets the wrong impression, this is not a local war between small producers where the market is over supplied. The advertisement refers to the sale of milk by a large multiple store. This is not a case where the milk is about to go bad and is down in price. This sale of milk has been advertised in a reputable national newspaper.

I do not wish to become voluntarily caught in the crossfire of this milk war. As Senator Quinn said, the price of milk is a matter for market forces. If there is a difficulty it is a matter for the Director of Consumer Affairs; it is not a function of the Department of Agriculture, Food and Forestry or of the new agency. The purpose and role of the agency is to ensure that producers get adequate payment for the supply of milk all year and that people in urban areas will be able to have an adequate supply of milk all year round.

Retail price control was abolished in 1988 and disputes are now resolved by the Director of Consumer Affairs. Difficulties flare up from time to time but they are resolved in due course and I am sure that will continue to be the case. In any event, this agency has no role in the matter.

The Minister said the producer would get adequate payment all year round. What exactly does that mean? Is there a difference between the price for the summer months and for the winter months and is it being regulated by this authority? If so, what is the authority's power in the price of milk?

Has the Department a policy on door to door milk sales or on a greater use of glass?

The producer price of milk is to be decided between the agency and the producers. As already said the agency will be represented on the board by producer interests. It will naturally have to skew the price to give adequate compensation for winter milk production. In other words, there will be a higher price for those months. That will be decided between the registered liquid milk producers and the board.

Door to door delivery is the traditional way of supplying milk in Ireland, although the practice is declining. I do not know if it will continue in the long term because younger people may not like to get out of bed at four o'clock in the morning to deliver to individual houses. Another commercial consideration will be long life milk, although it tastes burnt and unpleasant to the Irish palate. Labour costs are a large part of an enterprise and commercial considerations must be taken into account. Finland is the only country in this hemisphere which drinks more milk per capita than we do. Milk is an excellent product and its use should be encouraged. The National Dairy Council promotes milk and milk products and we are near the top of the international league in that regard. Door to door deliveries contribute to that and I hope they continue.

As regards the National Milk Agency and setting a price, a surplus system operates during the summer months, but one must produce a certain quota of milk during the winter months. Will that system still apply? A registered milk producer under the new agency could decide not to supply milk. Will penalties be imposed on a producer if he does not fulfil his obligations to produce milk during certain winter months? Under the present system, a person will be penalised because he will have extra surplus during the summer months at a lower price.

I do not want to labour the point, but we should not say that the sale of milk is decreasing. We have a surplus of milk, which the EU must store for us, and it is a product from which we create other products. Does the Department place any emphasis on the fact that the sale of milk from door to door creates an opportunity to work. The Minister's statement that young people do not want to get out of bed early to deliver this product is nonsense. People want to get out of bed and work is an incentive.

Milkmen work a four day week and this should be increased to six days. The use of glass bottles would create a six day working week and milkmen prefer them. This country, through the EU, should place more emphasis on selling milk in glass bottles.

With respect to those who will introduce the Ethics in Public Office Bill, I want people to have the opportunity to do something for themselves. I do not want particular groups availing of the opportunity to eliminate the employment of people selling milk from door to door, although that is already happening because of lower prices in some areas. What can the Department do to stop this and to create more jobs through the use of glass bottles and door to door deliveries? The Minister should not forget that more than 52 per cent of our people are under 25 years of age and many of them would be able to get up at three o'clock in the morning to deliver milk, if they thought they would make money from it. That is not the problem.

In America, milk is still delivered and bottles returned the following day. Its system is itemised which shows its important to this society. We should create such a policy so that the rest of Europe can learn from it. We should not capitulate to the carton on the shelf or long life milk, which tastes burnt, as the Minister admitted. I do not want that and I demand a glass bottle from my milkman because the milk tastes better.

I agree with door to door deliveries of milk, but it is hard work for those who do it and——

I do not deny that.

——they must be compensated.

Previously, prices were fixed by order of the Minister for Agriculture, Food and Forestry. Senator Kelleher made an important point about liquid milk producers being obliged to produce enough milk for the winter. It is acceptable to produce milk in the summer because of the seasonality of the industry, but it must also be produced in the winter. There is a greater demand now for liquid milk, particularly in the winter months. Section 6 (2) (c) states: "...in the opinion of the Agency, provides adequate compensation to the producer for raw milk supplied under the contract throughout the year, taking into account, in particular, in relation to the winter months, the economic cost of production of raw milk of suitable quality for heat treatment for liquid consumption all the year round;".

The Senator is speaking on a different section.

It is relevant to this section because we are talking about the price of milk. I am sure that all aspects of the industry, production costs and liquid milk, will be taken into account by the agency when it decides the type of incentive it will give, by way of a bonus, during the summer months to produce milk in the winter. However, it is costly and hard earned.

The agency will decide the price the producer will get for the milk. Senator Quinn always likes to protect the consumer, but the agency cannot decide what the consumer will pay for it.

On Senator Cregan's request that door to door deliveries and glass bottles be promoted, the National Dairy Council is charged with the promotion, extra sale and consumption of milk and milk products. It is doing that and in some of its advertisements a milkman or milkwoman is at a door with a number of pints which seem to be in glass bottles. We cannot legislate for this. It is a matter for the milkmen because some of them are friendly and provide a range of other services in addition to supplying milk. They could increase their sales by showing flexibility in many areas.

As regards the points raised by Senators Kiely and Kelleher about the provision of milk in urban areas throughout the year, section 6 (2) (b) states that the contract drawn up between the agency and the producer shall be "for an unbroken period of 12 months or more which provides for supply all the year round by the producer of raw milk with a specified minimum percentage of the producer's production being supplied during a prescribed period (the "winter months") or for supply during the winter months only;". There is no question of someone using the seasonality of supply and grass based milk production during the summer and leaving the consumers in urban areas high and dry during the winter. This will be a matter for the new agency and the producers.

Question put and agreed to.
SECTION 6.
Question proposed: "That section 6 stand part of the Bill."

A contract will be between the producer and processor, based on a guarantee of a certain supply during the winter months. In respect of some of the pasteurising plants which also have a manufacturing plant and where registered milk producers supply liquid milk on the one hand and manufacturing milk on the other hand, what kind of inspectorate is in place in the Department to control that?

If a liquid milk producer is supplying liquid milk under contract the seasonality factor comes into play straight away. The producer is forced to supply 40 per cent of his milk through the winter period. He is entitled to higher payment at that stage. I am not accusing anybody of doing anything wrong but there is always a danger that the pasteuriser will use manufacturing milk for the liquid trade. What kind of guarantees has the Minister put in place in respect of this issue? Can he guarantee that the producers who sign the contract and are paid the extra price will provide all the liquid milk supplied to that plant?

I am familiar with the point Senator D'Arcy is making. Some multipurpose groups now produce both manufacturing and liquid milk and there is some suspicion that some farmers are paid the manufacturing rate while the milk goes for liquid consumption. Under this legislation the agency will have its inspectorate. The agency will carry out its own monitoring as to the volume of milk sold to consumers and the volume of milk purchased at liquid milk price. If there is a variation they will have to check it out further to ensure there is a clear delineation between manufacturing milk and liquid milk.

The Department is concerned about and has a role in ensuring that standards are maintained and that they are up to a minimum level, but the agency will monitor the volume of milk going into the liquid milk stream and ensure that it is paid for at liquid milk price.

Is it a question of monitoring each individual pasteurising plant and being able to relate that back to what they have purchased in respect of contract milk from liquid producers, based on what they supply as liquid sales, or is it done on a national basis? Will each individual pasteurising plant be under the inspectorate in that regard?

Yes. The agency will have the responsibility of monitoring this matter and will have an inspectorate to do that. The inspectorate will have responsibility nationally but they will have individual inspectors to monitor each plant.

Question put and agreed to.
Sections 7 to 11, inclusive, agreed to.
SECTION 12.
Question proposed: "That section 12 stand part of the Bill."

When a registered person dies, that person's registration is normally handed on to the next of kin, to the son or daughter who is working the place. This is not clear from a reading of this section. I would like to hear from the Minister exactly what he has in mind. There is a dangerous situation in that where a farmer registered as a liquid milk producer dies, the agency has the authority to say that the contract automatically goes.

Is the Minister giving a guarantee that the contract will automatically go back to the next of kin on that farm? If that does not happen a dangerous situation could develop where the agency could get its own pool of milk. The farmer would be a very big loser in that regard.

This is a crucially important matter and it is covered comprehensively in section 12 (1). Where any registered person dies, the agency shall on the application of the personal representative of that person, made in such a manner and form and containing such particulars as the agency may require, insert in the appropriate register the name of the personal representative in lieu of the deceased person. In other words, if in a practical situation a farmer who is a registered liquid milk producer dies, that person is replaced on the register by his or her personal representative on that farm. It is covered clearly, adequately and comprehensively in section 12 (1).

Question put and agreed to.
SECTION 13.
Government amendment No. 6:
In page 11, subsection (1), line 50, after "liquidator" to insert ", receiver".

This is another technical amendment. This section deals with the alteration or cancellation of registration and conveys authority to a number of different parties to apply to the agency for same. In the case of a corporate body the existing text provides that the liquidator or examiner may do so. The amendment provides for the inclusion of the receiver and thereby remedies what was a drafting oversight in the first instance. It is a pure technicality.

Amendment agreed to.
Section 13, as amended, agreed to.
Sections 14 to 16, inclusive, agreed to.
SECTION 17.
Question proposed: "That section 17 stand part of the Bill."

I have a question in regard to the funds which the agency is to maintain and manage in accordance with the legislation. The Minister has not spelt out clearly in the Act where the funds are to come from. At present the Cork District Milk Board and the Dublin District Milk Board have a charge per gallon on the milk but it is not clearly specified here. I could not see it in the legislation. What level of funds is the Minister talking about?

The question of funds and the levies payable by processors is covered under section 8, which goes into great detail. All moneys received by the agency, essentially the levies described in section 8, must be paid into a fund. From this fund the agency must make any payments required under this Bill and meet the expenses it incurs in carrying out its functions. The agency may borrow on the security of the fund, but only with the consent of both the Ministers for Agriculture and Finance. Any surplus in the fund may be invested in trust funds and the agency may manage a portfolio of investments. All interests and dividends received as well as the proceeds on sale of investment must be paid back into the fund. The matter is covered adequately in section 8.

It is not specified. Section 8 states:

The agency may, with the consent of the Minister, alter the rate of levy on giving two months' notice in writing specifying the altered rate and the date on and from which it is taking effect to each registered producer and registered processor of the agency's decision.

Is that based on the present levy that is in operation in both Cork and Dublin? Has the Minister something different in mind? It does not make anything clear.

The present levy is around .82 per cent which is, of course, confined to the Dublin and Cork District Milk Boards areas. Under the new agency, it will apply to the whole country, supplying to Galway, Limerick and other urban areas. Indeed, it is envisaged that the levy will be substantially less than that. A figure of .3 per cent may be closer to the mark, but that will have to be fixed between the agency and the registered producers.

The Minister said he expects the levy to be much less than .82 per cent. The inspectorate, based in Dublin and Cork cities, will now have to go to every small town and processor in the country. Does the Minister not think there will be an increased expense involved for inspections? The real costs will arise there. The inspectorate, when dealing with the huge dairies in Dublin and Cork, operated in a confined region. Under this Bill, they will have to visit every processor. They will now be dealing with about 240 processors, as opposed to 20 to 30 in the past. Was there any assessment made of the cost involved?

The main idea of the agency was to ensure there was an adequate milk supply for consumers all year round. Great care was taken to set up a small agency of no more than five to six people, which would be self-financing by way of this levy. Additionally, the old levy was also used in connection with other activities of the board, some of which may have been profitable at times but not at others. Therefore, there was some degree of cross-subsidisation. For all the work we will carry out with this relatively small body, the amount of levy will be small. Producers and farmers would object to another agency with a large levy. Farmers, and registered liquid milk producers, will, on the whole, ensure it remains at a relatively small rate.

Question put and agreed to.
Section 18 agreed to.
SECTION 19.
Question proposed: "That section 19 stand part of the Bill."

I hope the Minister is not expecting some conflict in regard to this section. Was this type of power given to the Dublin District Milk Board? I do not remember people having to appeal under a certain section of the Act if there was a problem with their contract. Why did the Minister include this section? I presume there is a reason. Was there a similar provision in the last Bill? To my knowledge, there was not, but I am not sure.

The present operation consists of a type of gentleman's agreement between the registered producer and the board and there has been little conflict. I hope the Minister does not foresee such conflicts. I accept the present EU standards are high. Under the somatic cell count system, if a farmer does not go under 400,000 gallons by the end of this year, they will not be allowed to produce liquid milk. There is also a certain bacteria count level the EU are prepared to accept. I agree with the stringent regulations the EU have imposed on the production of liquid milk. However, we should not have these clashes. The section proposing the establishment of an appeals mechanism through the Minister's Department worries me. What is the reason for it? Did it operate in the past and can it operate effectively now?

This section provides a mechanism for appeals against decisions of the agency by either producers or processors. The decisions in question will relate to a refusal to register a contract, the cancellation of registration, the alteration of an entry into the register of the agency or the cancellation of an entry. The appeal will be heard and determined by an officer of the Minister appointed for that purpose.

The situation is different to that of the Dublin and Cork District Milk Boards, which had a minimum producer price order. Therefore, there was no conflict on that. In this case, one has individual contracts between an agency and the registered liquid milk supplier. I would not envisage a dispute occurring often, but if there is one such as a farmer not reregistered, refused registration — when a son takes over from his father, for example — or have it cancelled, it is only prudent to have some appeals system. An aggrieved individual can go to an independent officer and have the appeal determined. Under section 19, "the appeal shall be heard and determined by an officer of the Minister appointed by the Minister for that purpose."

It is reasonable to have an appeals system because it can act as a recourse in the event of a grievance. However, section 13 states the appeal is confined to subsections (2) and (3). This suggests that the agency can "cancel the registration of a person in any register upon the application of that person or, in the cases of an individual, that person's personal representative or, in the case of a body corporate, the liquidator or examiner." If the decision goes against the personal representative or the body corporate, am I correct in assuming there is no recourse to appeal? If this is the case, it is a deficiency in the Bill.

I am a little worried about this provision. These problems were always dealt with by the producer representatives on the board. If there was a genuine problem, they could, in conjunction with its chairman, interview the farmer and processor concerned and iron it out. Putting a Department inspector into this role would make the situation more difficult. The official may not be that well equipped to deal with it. The official may know the regulations, but may not be able to understand the farmer's problems. If a producer was refused registration up to now, the two representatives of the board and the chairman would call the processor and see where the difficulties lay. The Minister is putting an inspector into that role. I am not pleased with this section; it certainly did not apply under the old regulations. Where did it come from?

On Senator Dardis' point, a producer or processor who is dissatisfied with a decision under this section may appeal to the Circuit Court against it or have an appeal heard and determined by an officer of the Minister appointed for that purpose under this section. Under section 13, the agency shall give the registered person representation and is obliged to appoint a personal representative. There is no requirement for appeal under this section. If there are any further concerns on that matter, I will be glad to take it into account when the Bill goes back to the Dáil.

I accept what the Minister said about the agency's responsibility to the personal representative, but the only two circumstances where an appeal is covered relate to section 13, subsections (2) and (3), not to subsection (1), which states, "The Agency may alter or cancel the registration of any person in any register upon the application of that person or, in the case of an individual, that person's personal representative or, in the case of a body corporate, the liquidator or examiner. It strikes me — I am prepared to be corrected on it — that those people are specifically excluded from appeal under the Bill. If there is an appeals procedure — and there should be one — those people should be included in it.

The situation remains as I have outlined, but if there is any reason for concern I will give a commitment to take up the matter when the Bill is introduced to the Dáil. It is reasonable and prudent to have an appeals system, and if such a system is provided, as it is under section 19, it should apply to any other area where a grievance of some kind might arise.

Question put and agreed to.
SECTION 20.
Question proposed: "That section 20 stand part of the Bill."

Under this section the Minister may make regulations regarding any matter referred to in the Bill. Will such regulations cover the area of milk powder or dried milk if deemed necessary, given the substantial imports of dried milk and given that all the milk powder used in the making of ice cream and especially whipped cream is imported dried milk?

It is envisaged that under this section the Minister of the day can make orders regarding the matter raised by the Senator, or regarding any other matter referred to in the Bill. It is a wide, enabling section.

Question put and agreed to.
Sections 21 to 23, inclusive, agreed to.
SCHEDULE.
Question proposed: "That the Schedule be the Schedule to the Bill."

This is important legislation which has been under consideration for five or six years, a considerable length of time, and it must now be introduced to the Dáil. It is sad that consideration of the legislation has taken so long, given the importance of the milk industry to the country.

It appears the Minister does not have all his homework completed regarding certain aspects of the legislation. These can be completed over the coming recess. When will the Bill be introduced to the Dáil? Will it then have to come back to this House? Can the Minister also give an assurance that the legislation will be operative at the very latest by the end of the year?

As the Minister and the Department is aware, serious losses have occurred in the areas concerned in the six years that have elapsed since the introduction of this legislation. The Department must take some of the responsibility for this, as my party co-operated in every way possible with the passage of the Bill when it was introduced to the House. It is time to move on and look forward, especially in view of the fact that agreement has been obtained with the union, a factor which is so important to the legislation.

When the Bill is passed by the House it will be introduced to the Dáil when it reconvenes next October. Subject to the agreement of the Whips, I will press for the Bill to be taken in the first week of the new session. In the meantime we will proceed with all the preparatory work to ensure the measure can be implemented next October.

The legislation has dragged on a long time, sometimes at the request of Members of this House when it was introduced previously. However, consensus has now been reached and I wish to have matters concluded without further delay.

Paragraph 10 to the Schedule states:

Every ordinary member shall be paid by the Agency such allowances for expenses as the Minister, with the consent of the Minister for Finance, from time to time appoints.

Why, in the case of the Irish horse racing industry, should it be assumed that the people who participate in the Irish Horse Racing Authority will do so on a voluntary and unpaid basis, and only the chairman will be able to recover his expenses, while in the case of the National Milk Agency the ordinary members should recover their expenses?

It is appropriate that the ordinary members should recover their expenses, but why is it assumed that the horse racing fraternity is in a much better state——

They are wealthier people.

Am I to assume the Minister believes that those in the horse racing industry are much better off than the poor humble dairy farmers who are members of the National Milk Agency?

Every ordinary member shall be paid expenses, or mileage, as it is known on sheep dipping committees. They are entitled to such expenses. On the issue of the Irish Horse Racing Authority, I considered the matter in some detail, and members of the Authority will obtain their due mileage allowances also. They will not obtain any stipend, or whatever small amount semi State board members obtain. It is usually no more than a token, but virtually the same expenses or mileage allowance will apply to the ordinary members of the National Milk Agency as will apply to the members of Irish Horse Racing Authority.

Question put and agreed to.
Title agreed to.
Bill reported with amendments, received for final consideration and passed.
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