Dáil Éireann Debate, Wednesday - 1 December 2010
16 Deputy John Cregan asked the Minister for Agriculture, Fisheries and Food the closing date for the milk quota trading scheme for the 2011-12 milk quota year; and if he will make a statement on the matter. [45062/10]
View answerIn mid-October I announced the ninth milk quota trading scheme, which is the first of two trading schemes to allocate quota in respect of the 2011-12 milk quota year. The closing date for receipt of applications was Friday, 5 November 2010. The structure of the scheme is largely unchanged from previous years. It operates in respect of each co-operative area and is comprised of a priority pool and a market exchange. Sellers continue to contribute 30% of the total quota offered for sale to the priority pool. The method for calculating the market clearing price, including the 40% price corridor, remains unchanged. The 3:2 ratio governing the distribution of priority pool quota between young farmers and category 1 producers — those with quotas of less than 350,000 litres — remains, as does the option for sellers in certain co-operative areas to sell at 1 or 2 cent per litre less than their original offer price. However, I have reduced the maximum price at which quota is traded in the priority pool, from 6 cent per litre to 5 cent per litre. If the exchange price for a given co-operative area drops below 5 cent per litre, the priority pool price will be the same as the exchange price.
In addition, I have introduced a national component in each phase of the scheme that will allow sellers who have been successful in selling some, but not all, of their quota on the market exchange to dispose of their remaining quota, through a national pool, to purchasers in other co-operative areas who have been unable to have their full requests satisfied. Where necessary, this redistribution will be carried out by the Department immediately after each of the two stages to ensure sellers are not forced to retain some of the quota offered for sale because of insufficient demand in their areas. Such a re-distribution will not involve a separate application process.
I expect to be in a position to announce the results of the first exchange before Christmas. A second exchange will be announced in early January 2011. Full details of the scheme are available from co-operatives or on the Department's website:
www.agriculture.gov.ie/dairyingfarming/milkquotas.
On the basis of the targets set out for increased production in that area, what bearing will the Food Harvest 2020 proposals have on this scheme?
As Deputy Sherlock is aware, I introduced a national component to the scheme this year, the first time this has been done. The food harvest report stated that we would review the existing milk quota trading scheme and I have already done so. Let us consider the line north from Dublin to Galway. The co-operatives in this area, including Connacht Gold, Lakeland Dairies and Town of Monaghan, expressed concern that there could be a loss of milk from the area. I am aware from speaking to some of the senior officials in those processing units that they are perfectly satisfied with the level of demand for milk quota this time around. Although the processing has only just begun in the Department, the provisional figures for the first exchange show a total of 542 applications from sellers and 2,707 applications from buyers were received by 5 November. This shows a demand for milk exists and it is a vote of confidence in our ambitions and the realisable targets we have set to double milk production by 2020. That was the first opportunity I had to make a change to the existing quota arrangements and, from the initial analysis, it appears to have proven successful.
We will exit quota and quota increases in the coming four or five years. Does the Minister have any specific plans to deal with the extra quota coming on board, especially in the context of trading? Naturally, there is vast sectoral protectionism in this industry. Has there been some effort to try to get so-called "co-opetition" between processors in the long-term such that they could come together in a joined-up way to process and market produce? If the Minister intends to roll out this level of milk production what we have is a good indicator but we must know how the Minister intends to ease into the approach post-quota.
As part of the Food Harvest 2020 report I established a dairy activation group, chaired by Dr. Seán Brady. I have given the group until the end of November to report to me on several issues.
Is it finished?
Yes, it is completed. The group is comprised of representatives of Teagasc and some processors and farmers, especially young farmers, from various parts of the country. I have not seen the report yet but one issue is to ensure we maximise the plant and machinery in place for processing. There must be co-operation among the plants. I have met the various processors, the farm organisations and the Irish Co-Operative Organisation Society. A realisation exists that we have the capacity in this country to increase milk production by 50%. However we must ensure that the relevant facilities are put in place and that we make maximum use of existing plant. There must be co-operation between various processors and I am confident this will take place. However, the first working group of the Food Harvest 2020 process has already completed its work on that issue.
Written Answers follow Adjournment Debate.
