I propose to take Questions Nos. 202 and 203 together.
The total (non adjusted) volume of milk produced in the first six months (April 2013 to September 2013) of the current milk quota year was 3,795 million litres, which represents 68% of the national quota allocation for the 2013/2014 milk quota year. The corresponding figures for the same period last year was 3,664 million litres, representing 66% of the national quota for that year. Based on monthly quota estimates, this means that Ireland is 0.42% over quota at end September 2013 compared to a position of being 2.14% under quota at the same point last year.
Given the very favourable milk production conditions that prevailed throughout the summer and early autumn there is a strong likelihood that Ireland will exceed its quota and consequently incur a super levy fine for this milk quota year unless milk producers take corrective action for the second half of the year. I do acknowledge the frustrations of farmers wishing to expand in response to both the favourable weather conditions and the strong milk prices but I do want to remind farmers that it remains critically important that they continue to manage their enterprises within quota until the expiry of the milk quota regime on the 31st of March 2015. The decision has been taken at EU level that quotas will continue until this point and producers should plan their production accordingly. I would urge farmers to immediately take stock of their milk supply situation and discuss any potential over production with their Teagasc dairy advisor. I would also remind suppliers who are in, or approaching an over quota position, that they should only sell their milk through their usual purchaser in compliance with the Milk Quota Regulations and to sell through any other channels is an offence. Likewise milk purchasers have a clear obligation to only accept milk for purchase when they are absolutely certain of the provenance of that milk.
I and my officials have been extremely active in seeking to secure a soft landing for suppliers in the lead-up to milk quota abolition in 2015 and the 2008 CAP Health Check agreement granted Member States increased quota between 2007 and 2014 - 9.3% in Ireland’s case. However for a small number of countries, including Ireland, those quota increases may be insufficient to accommodate increases in milk production which have been driven by supply and demand dynamics and the prospect of a quota free production environment after 2015. I have discussed this matter extensively with other EU Agriculture Ministers and with the European Commission, and officials from my Department have raised this issue at EU level and with other Member States. However, attempts to consider measures beyond those agreed in 2008 have been resisted and neither of the interim reports on the 2008 CAP Health Check Agreement, in 2010 and 2012, proposed any further changes to the quota regime.
The decision to abolish quotas from April 2015 was confirmed in the new CAP reform package as agreed under the Irish Presidency in June and efforts now must be on planning for the expansion opportunity which this provides for Ireland and as set out in the Food Harvest 2020 Strategy. In the meantime, it is clear that quotas will remain in place until their planned abolition in April 2015 and any expansion in supply before then needs to be synchronised with their abolition.
