Milk (Regulation of Supply) Bill, 1994 [Seanad Bill amended by the Dáil] : Report and Final Stages.

I apologise to the House for being 17 minutes behind time in dealing with this Bill. However, the House agreed to this procedure.

This is a Seanad Bill which has been amended by the Dáil. In accordance with Standing Order 82 it is deemed to have passed its First, Second and Third Stages in the Seanad and is placed on the Order Paper for Report Stage. On the question "That the Bill be received for final consideration" the Minister may explain the purpose of the amendments made by the Dáil and this is looked upon as the report of the Dáil amendments to the Seanad. The only matters, therefore, that may be discussed are the amendments made by the Dáil.

For the convenience of Senators, I have arranged for the printing and circulation of the amendments. Members may speak only once on the question. I call the Minister.

Question proposed: "That the Bill be received for final consideration."

This Bill was introduced in the Seanad in 1988. It was left in abeyance until the staff of the Dublin and Cork District Milk Boards worked out an agreement under the auspices of the Labour Relations Commission. Earlier this year an agreement was reached which satisfied all concerned. The Bill has since been passed by the Dáil and it is before the Seanad with some minor and purely technical amendments.

The Bill provides for the dissolution of the Dublin and Cork District Milk Boards, for the sales of their ancillary business and for the establishment of a new National Milk Agency. It was necessary to make a number of minor and technical amendments to the text of the Bill as passed by Seanad Éireann on 5 July last. The amendments to the text of the Bill were as follows.

In section 1 (1) the definition of "heat-treated milk" was amended by the deletion of the word "substances" in line 35 and the substitution of the words "food ingredients"; and in line 36 by the deletion of the word "substances" and the substitution of the word "ingredients". These amendments were necessary because the words "other substances" and "substances", respectively, render the definition too wide and therefore inappropriate in the definition of a product intended for human consumption.

In section 1 (1) the definition of producer was amended by deleting the words "an establishment" and substituting the words "a holding". The amendment was necessary because "an establishment" is more appropriate to a processing establishment or other industrial premises whereas it is intended to refer to a dairy farm.

In section 2 (2) the words "or elected" were inserted after the word "appointed". This is a simple technical amendment. The Bill provides that all members of the agency will at the start be appointed by the Minister but within the first year an election will be organised so registered producers can elect representatives from among themselves. Thus the agency will soon have both elected and appointed members and section 2 must reflect this.

At section 5 (1) the words "or supplied" were inserted after the word "sold" and at section 5 (4) the word "supplies" was inserted after the word "sells". These amendments were necessary to ensure milk delivered from one part to another on a sale or return basis comes within the provisions of this section. Furthermore, in the event of legal proceedings being brought under this section, it will not be necessary to prove a sale was completed; it will be sufficient to demonstrate a change in possession of the milk involved.

In section 5 (5) the words "in respect of each day of such contravention" were inserted after "£200". This is a technical amendment to make it absolutely clear that a person guilty of contravening the provisions of this section will be liable to a fine of £200 for each day the contravention continues.

In section 5 (6) the words "two months" were deleted and replaced by "on a date laid down by order of the Minister". The amendment was necessary because two months may not allow for adequate time for the work which will have to be undertaken by the agency before the provisions of this section can be brought into full effect. The amended wording allows for the section to be brought into effect whenever the agency signifies it is ready to commence operations, be that a longer or shorter period than two months after its establishment.

In section 8 (2) (a) the following was inserted:

(ii) the total quantity of milk acquired for the production of milk for liquid consumption, and [.]

This amendment increases the amount of information which processors will be required to furnish to the agency. The agency will therefore have to be made aware of the quantity of milk obtained by a processor under an exemption licence granted by the Minister. This will greatly facilitate the agency in determining whether processors' acquisitions of raw milk balance with their sales of heat-treated milk and whether they are paying the correct amount of levy.

In section 8 (7) the following was inserted after "register":

of producers or processors as the case may be and the registration of any and all contracts to which that person is a party [.]

The amendment ensures there is no ambiguity in that once a registered person loses his registration with the agency, any registered contracts to which he is a party become null and void in the eyes of the agency.

In section 10 (3) the following subparagraph was inserted:

(d) prevents the inspector from taking copies of records or documents or extracts therefrom in accordance with subsection (2) (b), or [.]

The amendment protects the inspector's authority by making any person who impeded an inspector in the exercise of his powers under subsection (2)(b) guilty of an offence.

In section 12 (2) the phrase "at registered premises" was deleted and replaced with "by a registered person". The amendment was necessary to improve the clarity of the text since the Bill provides for the registration of persons, whether natural or legal, rather than on premises.

In section 13 (3) (f) the word "Directive" was deleted and the words "Directive, or" were substituted; and the following subparagraph was inserted:

(g) in the case of a registered producer, that producer fails to supply the quantities of milk specified in a registered contract as being due for supply during the winter months.

These amendments enable the agency to take effective action against a producer who may attempt to exploit the situation created by the operations of the agency by supplying only in the summer months when production costs are low while ceasing to supply in the winter, so undermining the objective of the Bill.

In section 13 (4) (a) the word "receiver" was inserted after "liquidator". This was a simple technical amendment which corrects an omission. In setting down the possible parties which might be in charge of a business and on which the agency would be obliged to serve notice of its intention to alter or cancel registration, reference to a receiver was accidentally omitted.

After section 13 (8) the following subsection was inserted:

(9) A producer whose registration is cancelled in pursuance of subsection (3) (g) shall not be eligible for re-registration by the agency for a period of at least two years from the date of such cancellation.

The amendment provides for a penalty of two years prohibition on renewing the registration of any producer whose registration is cancelled by the agency for failing to supply the contractual quantity of milk during the winter months.

A new section was inserted before section 21 entitled "Prosecution of Offences", which reads:

21.—Offences under sections 5, 8, 9, 10 and 15 shall be brought and prosecuted by the Agency.

The amendment facilitates the more effective implementation of the legislation by bestowing on the agency itself the power to prosecute offences. In the absence of this provision, the duty of taking proceedings for offences would fall on the Director of Public Prosecutions.

The following amendments were made to the Schedule to the Bill. First, at paragraph 1 (4) the word "absence" was inserted after the word "through". This amendment widens the circumstances in which the Minister may appoint an acting chairman in order to facilitate the conduct of agency business. Second, after the word "proper" the phrase "and references to the Chairman in the subsequent provisions of this Schedule shall include the person so acting" was inserted. The purpose of this amendment is to ensure the acting chairman will be empowered to carry out the duties otherwise carried out by the chairman if the chairman was not absent.

I trust I have given a clear report of the amendments to the Bill passed by Dáil Éireann and I commend them to the House.

Mr. Naughten

I welcome the Minister, but I endorse the sentiments of the Leader of the Opposition who this morning deplored the manner in which this Bill came before the House. We were not aware it was to be presented until yesterday. That is too short a notice, but we on this side of the House do not object to the Bill being taken and will not hold up approval of the amendments made in the Dáil. Conscious of what you have said, a Chathaoirligh, I will confine my comments to those amendments.

When the Minister was speaking he noted the Bill first came before the House in 1988. I can verify that it was here in 1989 and it is time it was brought to fruition because there is a need for it.

There was probably a good reason for setting up the Dublin and Cork Milk Boards, but they have outlived their usefulness and it is time to amend the regulations.

The Minister rightly pointed out most of the amendments were technical, such as changing the word "substances" to "ingredients", changing "establishment" to "holding", or adding "supplied" to "sold". Those amendments make sense and strengthen the Bill. Many of them strengthen the hand of the agency.

However, I am concerned about two points. First, in section 5 (6) it is proposed to delete "two months" and replace it with "on a date laid down by order of the Minister". There is probably a good reason for doing that. However, although this legislation is regarded as important, there is nothing to ensure the Minister will make an order in a reasonable period. The matter could be let lie for a year because the time is not specified. It does not say when the regulations will come into being; it is left to the Minister to decide.

If we believe that this legislation is important, we should be given a date. I understand why two months may be too short, but I ask the Minister to consider amending this to include "not later than six months". It is important that these amendments be made and that the Minister should not be left with an option, which is the situation at present.

I am also concerned about amendment No. 14 which proposes to insert a new subsection (g) in section 13. This proposed new subsection is as follows:

(g) in the case of a registered producer, that producer fails to supply the quantities of milk specified in a registered contract as being due for supply during the winter months.

There could be a situation where a producer would not be able to meet the contract requirements due, maybe, to his herd having TB or some other act outside his control. It would be a tragedy and not in the spirit of the Bill if such a producer were penalised because he failed to supply in those circumstances. The proposed new subsection is dangerous unless there is an addendum to protect producers who, through no fault of their own, may not be able to honour their contracts, say, because of a disease outbreak and there may also be other reasons. I know a farmer who, in the not too distant past, had to sell his dairy herd because of pressure from financial institutions. It would be a great pity if somebody was to loose his contract because of this type of situation.

I ask the Minister to consider both sections to which I referred. I accept that the rest of the amendments are technical and strengthen the legislation, either by making it more meaningful or ensuring more clarity in its sections. However, I am concerned about the two amendments about which I spoke and the implications of the latter on producers. There is no time limit for the making of orders, this is left open to the Minister. I believe there should be a time limit for the introduction of the legislation.

May I apologise to the Minister for the fact we started this debate later than ordered but I am sure he understands the reasons and is prepared to accept them. We may say with a fair degree of accuracy that the passage of this Bill through the Oireachtas has been leisurely — and this is being charitable — but I understand the reasons. The fears of the staff have been dealt with and allayed.

Curiously, my reservations are in accord with Senator Naughten's and I can assure the House I had no consultation with him prior to the Bill coming back to us. I am trying to recall the Bill as originally drafted. In respect of section 5 (6) and the two month period, when the original Bill was presented to us, did it refer to two months or was this period the result of an amendment to the Bill as it passed through the Houses? I agree that there should be a defined time limit. I am in favour of taking discretion away from the Minister, particularly in a case like this. We could find ourselves in a situation where the Minister might adopt an even more leisurely approach to the date of the order than to the passage of the Bill through the Houses. This is conceivable because he is entitled to do this under the legislation. This is highly undesirable. It is totally within the bounds of reason that there should be a defined timescale.

I also agree with Senator Naughten about giving discretion to people who, through no fault of their own, might not be able to supply winter milk. I await the Minister's reply on this. I am more concerned about section 5 (6). I do not understand why such discretion is given or, if there was a difficulty about the timescale, it could not have been extended, but there should have been a timescale.

It has taken a long time to get this Bill through both Houses. It was introduced here because of the difficulties of the Dublin Milk Board. It was very necessary because the supply of milk for liquid consumption had to be regularised. The Minister said that amendment No. 9—

....increases the amount of information which processors will be required to furnish to the agency. The agency will, therefore, have to be made aware of the quantity of milk obtained by a processor other than under a registered contract; e.g. milk lawfully imported into the State....

On Second Stage I mentioned that there would be a danger of this if milk producers, especially of liquid milk, were not adequately paid for supplying winter milk. It is hard work supplying milk in the winter; I know this from experience. There must be good compensation for producers who supply milk in the winter in addition to that supplied in the summer. Those who supply milk in the winter and fulfil their obligatory requirements need the support of the Department. With the increase in urban populations there is more demand for liquid milk. In rural areas people buy pasteurised liquid milk, and this also adds to the demand. Producers should be adequately compensated.

I share Senator Naughten's view on amendment No. 16. The Minister stated that:

The amendment provides for a penalty of two years prohibition on renewing the registration of any producer whose registration is cancelled by the agency for failing to supply the contractual quantity of milk during the winter months.

The Minister must take account of disease; I am sure he is well aware of them. Senator Naughten mentioned difficulties with banks. There will have to be leniency and goodwill on the part of the agency to ensure that the people who are genuinely prepared to supply the contractual quantity of milk during the winter months but are unable to do so through no fault of their own, are not to be barred for two years. If they can supply the following year their contracts should be renewed.

I thank the Senators who contributed. This measure has been before the Seanad for a considerable time. It was introduced here and went to the Dáil. Satisfactory arrangements were made on which there was agreement between the existing staff and management. This agreement was drawn up under the auspices of the Labour Relations Commission, the Department of Agriculture, Food and Forestry and the Department of Finance.

This Bill has been returned to the Seanad because of a few technical amendments. I refer to those alluded to by Senator Naughten and Senator Dardis. The period mentioned in section 5 could be less than two months. I wish it could be less than two months because it has been progressing at a pedestrian pace until now and I would like to see it rationalised and the new agency put into effect as soon as possible. I will make every effort to have the work done as soon as possible. If there was a six month period, perhaps the agency could feel it had more time than was necessary. I believe it could be less than the two months suggested. The period of time relates only to the time given to the agency for setting up the arrangements under section 5 and it does not relate to the setting up of the agency. Once we are finished with this measure in this House, we can move immediately to establish the agency. Some considerable preparatory work has been done already in that regard.

As regards the case of a registered producer failing to supply the quantity of milk specified in the registered contract as being due for supply during the winter months, this is to take account of a supplier who enters into a contract to supply a dairy or a milk processor for the production of milk all year round, as Senator R. Kiely said. Committing oneself to producing winter milk and milk all year round is quite an undertaking because one is talking about 365 days of the year and about producing quite expensive milk in the wintertime when one must feed concentrates. It is easier to opt for manufacturing milk from grass because one could take a break in the wintertime under those arrangements. However, one must keep one's nose to the grindstone as regards winter milk arrangements because one must milk the cows twice a day.

Recently I visited a dairy show and from what I saw the situation is not too bad in the dairy industry. In fact, I had to take cover from the champagne which was flowing there.

That was an isolated case.

That is not far from the Senator's constituency.

It was excellent champagne; it was a pity so much was wasted.

Where an individual supplier cannot meet his or her obligations through circumstances outside his or her control, there is provision for an appeal under section 13 (4). If, in the circumstances mentioned by the Senators, or as a result of disease breakdown or family distress over a short period of time, the producer cannot meet their commitments for one reason or another, drastic action should not be taken against them. On the other hand, a supplier could decide to avail of summer milk production, when they should be supplying it all year round. However, the purpose of the Bill is to ensure there will be an adequate supply of milk to urban areas all year round. The wintertime is a more acute time and, as Senator R. Kiely said, there is more demand now for heat treated and pasteurised milk in the interests of disease control. It is essential and in everyone's interest to adhere to the all year round contract. In the circumstances mentioned by the Senators, and I understand their concerns, I expect that such appeal under section 13 (4) would be upheld and registration would not be cancelled in those cases.

I thank the Senators for their co-operation and I assure them that once the Bill passes this House, the implementation and establishment of the agency and the consequential developments will take place as soon as possible.

Question put and agreed to.
Question: "That the Bill do now pass" put and agreed to.
Sitting suspended at 1.45 p.m. and resumed at 2 p.m.