Deputy McCartin has been given permission to raise on the Adjournment the question of the distribution of milk quotas in Ireland with a view to accommodating people in western areas. He has 20 minutes.
Adjournment Debate. - Distribution of Milk Quotas.
I have agreed with my constituency colleague, Deputy Brennan, that he should have five minutes and I will take 15.
In whatever arrangement is made for the allocation of the milk quota it is well known that the extent of the super levy as a penalty on milk production is so wide that nobody will send milk to the creamery in excess of his quota and incur payment of that levy, so we will have in fact a quota system. I do not expect, neither do I hope, that this will be a permanent system to which we will be tied for as far as we can see into the future. I hope that the pricing policy of the Community and the fact that MCAs are being progressively reduced and abolished in the Netherlands, Britain and Germany, together with restrictions on the imports of feed from third countries, will create a situation in which milk production will slow down in some member states of the Community and that in the foreseeable future, in the next three, four or five years, Ireland will be able to resume increased production of dairy products and compete in the markets for a higher share than we have at present.
I congratulate the Minister for Agriculture on the success he achieved in his negotiations on behalf of Irish farmers. I never underestimated the difficulties facing the Minister in the case he was making. As an MEP and having discussed with interest with the Council, Commission and Members of the Parliament the problems of milk production in Europe, and the economic and social implications of all the arguments made, I realised that this was politically a very serious subject not only in Ireland but in many countries throughout the Community. We realised that, while we had a very strong case to make, in favour of Irish agriculture, other regions of the Community and other farmers in other parts of the Community had a strong case too. We were asking for Ireland a concession that was being denied to many hundreds of thousands of small farmers throughout the Community who were being forced to cut back on their production. Therefore, we did not underestimate the difficulty the Minister would have in convincing the Governments of Europe that they should apply a levy to small farmers in their own member states and at the same time allow Irish producers the opportunity to increase their production.
The arguments made on behalf of Ireland within the EEC can be made on behalf of the western seaboard farmers in the underdeveloped areas with equal conviction. When we presented to Europe a case for an exemption for Ireland we presented a national case, and that is reasonable enough. I discussed this earlier with the Minister and with the Taoiseach and they felt that they should argue Ireland's case and that they should not complicate that argument by proposing different treatment for different parts of the country. I pointed out to them that if we went to Europe with a case for the underdeveloped areas on its own we would not have had a difficulty. We could easily have got the sort of derogation that we wanted. We could have got an open road in front of milk producers in the west to continue production for the foreseeable future. That could not be got for all of Ireland. There was a political will in Europe. It was quite obvious in debates in the Parliament and from talking to Commissioners and representatives of the Council that the west had the sympathy we needed to give us a total exemption from the levy. We chose not to do that and on balance probably we took the right decision. The case for Ireland would not have been as good if we were not able to include in it the figures of the disadvantaged areas, the low milk yields there and the total dependency of so many farmers in those areas on milk production. The farmers of the west joined with their colleagues to make a strong case, which was made successfully. Now we should take a look at the possibility of redistributing the quota within this country so that the 25 to 30 per cent of farmers in the west who produce milk can be allowed a more generous allocation from that quota than the bigger, better off farmers in the south and east.
Regarding the yield per cow, in north Connacht the average yield is 530 gallons, in the Cork area 760 gallons, in Waterford 877 gallons and our national average is 734 gallons. The average for the EEC is 965 gallons. This clearly shows that the gap between the better-off and the poorer Irish farmers is bigger than that between the average Irish and average EEC and far wider than the gap between the better areas of Ireland and the EEC average.
We can underline the differences between the eastern part of the country and the western area. In the south-west 41 per cent of farmers are in the under 10,000 gallons category while in the north-west 88.3 per cent of farmers are in that category. Something like two-thirds of the farmers supplying milk in the north Connacht area are in the under 5,000 gallons category. I am referring to that area because it is an average, well-organised co-operative area in the west and is typical of the west.
Another point made on behalf of Irish farmers was the limit to the number of choices they had in agricultural production. Nowhere is this more true than in the underdeveloped areas where the possibility of farmers converting their land to other types of production does not exist. If small farmers in the west cannot produce milk then one can say that it is not possible for them to achieve a viable income from agriculture. The strongest of all arguments put forward by Ireland and the most convincing in regard to the super-levy was that in the interest of regional policy and economic convergence Ireland should be given the opportunity to go ahead. We could not argue it entirely on a farm against a farm basis. We know there are many small farmers in Europe whose production was going to be reduced and who were to be denied the possibility of improving their standards of living which are considerably lower than average for their regions at present. We could not argue against the case being put forward by them, but we could argue on a regional basis that the EEC is committed to economic convergence, the redistribution of wealth, the bringing of opportunities and incomes of people in the poorer areas up closer to those in the better-off areas. On those grounds Ireland has an unanswerable case, which was well made.
In Ireland we can make this case again. We have discussed many times the disadvantages of centralisation, the flight from the land in the west, the social and economic consequences that flow from all that and indeed the consequences that we have just been hearing about in terms of lawlessness and the breaking down of security in urban areas. For all these reasons we can argue for the economic development of the west. The farmers there have made sacrifices in their efforts to co-operate with farmers from the rest of the country in bringing about a deal that was better than we could have got without the co-operation of those farmers in the west. I am saying now to the farmers of the remainder of the country that they ought to concede a little in the interest of allowing the further development of the dairy industry in western areas. We are not arguing here for the maintenance of an inefficient industry. We know now what our quota is and that that represents the amount of milk we will be able to sell. It is a question of which part of Ireland that quota of milk is produced in and it is in this context that I say we should give preference to those areas in which farmers do not have the opportunity of producing sugar beet, cereals or beef on the sort of extensive scale that is necessary in order to make a living.
We ought now to see the reason in the arguments Ireland was making in the face of opposition from our richer European neighbours and apply the very same reason in favour of the farmers of the disadvantaged areas. Some policies of the Community militate against the development of agriculture in the west. I have pointed out many times that while almost half the farmers of Ireland are living in the region of Connacht-Ulster, only something like 20 per cent of the benefits from the CAP are directed to that area. If one considers in economic terms the regional impact of the CAP one finds a little black patch for the Golden Vale area. That is the area to which the benefits of the CAP have gone. I am sure that your constituency, a Leas-Cheann Comhairle, has enjoyed a fair measure of that advantage. I am glad they have been able to benefit in that way but we are asking now for a small concession for the west.
Because of the policy of the Community in giving preference to cereal growers vis-à-vis the imports of cheaper cereals from all over the world, we have maintained higher cereal prices in the Community than has been the case outside. The same applies to beef prices. Consequently, the west of Ireland which does not produce cereals has been forced to pay the higher prices in respect of stock raising, supplementary dairy rations and so on, for feed brought either from the eastern part of the country or imported. Because of this policy we have been put at a disadvantage but we have had to make that sacrifice on behalf of the country as a whole. However, this makes our case stronger for a little extra now. Of course we respect the wisdom of successive Governments in supporting the policy on cereals but it has put us at a disadvantage. While I do not expect the Minister to tell the dairy industry precisely what they should do, what I am advocating must be a subject for negotiation. I urge him to bear in mind the facts I have put forward and to request the dairy industry and people with whom he has consultations as to how the super-levy should be put into effect, to consider the case I am making.
If I may, I shall give a couple of minutes of my short time to Deputy McCartin's fellow candidate for the European Parliament, Deputy MacSharry.
I shall be very brief in making my case in support of the west. Again, that part of the country is the poor relation. Yesterday the management of the North Connacht Farmers met here with Fianna Fáil and I understand they will be meeting with Fine Gael next week. This group are making a very good case for the west in so far as the super-levy is concerned. The figures in respect of the yield of gallons of milk per agricultural acre will put the situation in perspective. In the west, the ratio is 27.6 gallons per acre while in Cork it is 179.4 gallons and in Waterford 124 gallons. The figure for the EEC as a whole is 110 gallons. It will be seen, then, that the figures for Cork and Waterford are much higher than those for the European average. It was because of the low figure for the west that the Minister was successful in achieving an increase in the quota. I am not criticising him. He fought a hard battle but when he visited Sligo he promised that the super-levy would not be applied to the west. He said that the disadvantaged areas of the west should be free of the super-levy.
In regard to the figures for the yield per cow, in the North Connacht Farmers' area it is 530 gallons. The figure for Cork is 764 gallons while for Waterford it is 877 gallons with an average yield for the country of 734 gallons. The Minister did a great job in so far as his constituency was concerned. The average yield for the EEC as a whole is 965 gallons. We in the west are entitled to some derogation. The people there are only developing their farms. Much of this work has been in progress since the completion of the Moy drainage scheme but we are awaiting more arterial drainage works so that agricultural land can be developed further. As Deputy McCartin has pointed out, we in the west are not growers of cereals. Taking all these circumstances into consideration, the Minister should grant us some concession.
The difficulty arises from what is a disastrous decision for Irish farmers and for our dairy industry but this difficulty is more pronounced in the west and in the north-west as illustrated by the figures given by Deputies McCartin and Brennan. These figures which have been known to the Minister for a long time establish beyond doubt the serious damage that is caused to the development of the dairy industry in the west generally. The North Connacht Farmers have done a lot to highlight the problems.
In the short time available to me there are two questions I wish the Minister to answer. First, why did he promise to representatives he met in November that at the end of the day the least he would look for, if everything else failed, was an exemption for the disadvantaged areas from the super-levy? Did he seek that exemption and, if not, why not? I trust the Minister will be able to answer the question today because we may not have the opportunity of raising it again here.
My second question is to ask the Minister whether on this day, before any final decision is made, he will give a commitment to the west of a major proportion of the 4.65 per cent increase. We all know that this level of increase spells disaster for the dairy industry but the Government to which Deputy McCartin belongs have accepted it and we must live with it. The least the Minister can do is to show some fairness to the developing farmers in the west where the differential between their levels of production and the national average is equally as great as is the differential between our national average and the EEC average. I look forward to a favourable response from the Minister to these questions.
If people wish to ask questions, they have the forum of Question Time for doing so. I am not partial to answering questions from people who adopt the sort of snotty attitude that Deputy MacSharry has adopted.
I recall Deputy McCartin raising this matter before by way of an Adjournment debate. On that occasion he very graciously acceded to allowing some of his time to be used by another Member.
(Interruptions.)
I would have thought that the time which was so graciously given by Deputy McCartin would have been used in the same spirit in which it was given. Unfortunately that has not been the case.
(Interruptions.)
I want to reject the suggestion that I ever promised that any specific part of the country would get preferential treatment in regard to the super-levy because that is 100 per cent incorrect. Our complete negotiating strategy in Europe for the last nine months has been that Ireland as a whole would be treated as one single entity and there was not to be any differentiation between regions or between suppliers big, medium or small. I visited Sligo last September and I pointed out that I would endeavour to see that the north-west area would get the same concession as the Cantal area in France, which is exempt from paying the co-responsibility levy, not the super-levy. Certain mountainous regions of the mainland of Europe have that exemption.
I have endeavoured and will continue to endeavour to ensure that seriously disadvantaged areas in the west of Ireland will get a similar concession in regard to the co-responsibility levy because I do not accept that the only criterion for exemption from that co-responsibility levy is height above sea level. The quality of soil, climatic conditions and annual rainfull are just as significant when it comes to granting exemptions as height above sea level. I have said that at meetings at Councils of Agricultural Ministers and I will persist in my attitude to see that equal treatment is given to people in similar type but different circumstances.
I have listened with interest to what Deputy McCartin and other Deputies have stated. There are, however, some points about the special arrangements agreed for Ireland which must be taken into account. Firstly, our chief point in the discussions with the Commission and with the other member states was the great importance to Ireland of the milk industry, an importance which far exceeded the position of milk in the economy of any other member state. Our second point was the comparatively low state of development of milk production in Ireland. I have heard some interesting statistics quoted, particularly in regard to my own county being the highest county in the country regarding milk production. I want to point out something very clearly. Waterford, next to Wicklow, is probably the most mountainous county in the country. If they have got a high milk yield it is to their credit that they have achieved it in such difficult terrain.
In the negotiations in Brussels we had to base our case on the country as a whole. To have to look for a special deal for part of the country would have endangered the success of the whole effort. Had I tried to get a special concession for part of Ireland I would have provoked other Ministers to make similar pleas for disadvantaged parts of their own countries and I am afraid this would have led to confusion and lack of agreement. The British could have demanded it in respect of Wales, Scotland and the Sperrin mountains in Northern Ireland. The French could have looked for it in respect of the Cantal region, which is now subjected to the full rigours of the super-levy despite the fact that it is exempt from the imposition of the co-responsibility levy. Similar other areas throughout the Community could have made a case. What about the mountainous areas of Italy? They could all have demanded a special exemption but they did not. We were the only ones who got it overall. They did not even look for a regional exemption in relation to regions which are so very drastically under-privileged and undeveloped.
As to the way in which the quotas will be allocated within the country here we will, of course, be working on the basis of a quota under what is known as Formula B, that is the quota will be based on co-operatives and dairies. Next week my Department will be having discussions with the various interests in the milk industry. There are still meetings being held by the Commission in Brussels to complete the detailed regulations for operating the super-levy. I might point out that there will be meetings in Brussels tomorrow and next Tuesday on the details of these regulations.
There is a provision by which a special quota allocation may be made by member states to producers having special difficulties. I must, of course, stress that any such allocation would mean a reduction in the quotas for other producers. The type of special quota allocations which I refer to are for farmers who have had difficulties for one reason or another, perhaps due to disease in their cow herds or due to the fact that they are in a very precarious state of development and if their development was halted it would jeopardise their financial position. Those are the particular type of cases we will be looking at in the coming weeks but any such allocation will have to be made at the expense of other producers. That is a very difficult area in which to work. For my part it is simply as if having tread my way rather carefully, if I may say so, through one mine field, then being asked to enter another one. It is a very difficult area overall.
I have also to keep in mind that in some parts of our disadvantaged areas there are creamery enterprises as advanced as anywhere in the country. I can think of one notable creamery which has been very much in the news in the past year or so. It is rather too early yet until the discussions I refer to are completed for me to consider the whole method of allocation of quotas. I will take note of what Deputy McCartin said but I feel in all fairness I must advise him that the allocation of special quotas is going to be a far from easy task.
With regard to what Deputy McCartin said, I would also like to point out that it is essential that milk production in this country this year exceeds the 6.45 per cent we have been allocated in the Brussels talks. We must prove that we have the capability and the potential to expand annually far in excess to that, to give ourselves the right to take up the concession which we were given, which was that Ireland would get priority when any further milk supplies become available in Europe during the five year duration of the super-levy proposal. In the discussions which my Department will be having with representatives of the dairy industry next week, and probably for a number of weeks subsequent to that, it is probable that some interests will be opposed to special arrangements for particular categories of producers or particular areas. I would rather let the farming organisations and co-operatives have a discussion on that and let them see if they can come to some arrangement before I enter into discussions with them at ministerial level.
The Dáil adjourned at 5.30 p.m. until 2.30 p.m. on Tuesday, 10 April 1984.