The House will now hear two minute statements on matters appropriate to the Minister for Agriculture and Food and the Minister for Industry and Commerce. I propose to call the Deputies I have selected in the following order: firstly, Deputy Deenihan in respect of two matters and, secondly, Deputy Finucane in respect of one matter. Each Deputy is entitled to two minutes in respect of each matter and each statement will be followed immediately by a two minute reply by the appropriate Minister or Minister of State.
Adjournment Debate. - Agriculture and Food and Industry and Commerce Matters.
The present refrigeration programme being undertaken by Kerry Co-operative will cost Kerry dairy farmers upwards of £10 million. In County Kerry over 60 per cent of farms are less than 50 acres in size. There are 5,300 suppliers to Kerry Co-operative, 70 per cent of whom have quotas of less than 20,000 gallons. The milk price reduction to Kerry suppliers at the peak 1989 levels is now standing at 17p per gallon. This drop in price has knocked £3,400 off the income of a 20,000 gallon Kerry dairy farmer.
The refrigeration requirement for products in the 8,000 to 20,000 gallon category, as outlined in what I am saying here tonight, will cost dairy farmers almost 6p per gallon per annum for five years. This combination of falling milk prices and the extra cost involved as a result of refrigeration places a huge financial burden on smaller producers which will undoubtedly force many of them out of business. The number of milk suppliers in Kerry has fallen from 7,000 in 1980 to 5,300 at present. Unless grant aid is made available many more farmers will be forced out of milk production.
I made several appeals to the Minister to have grant aid made available last year and this year. The IFA exerted pressure through the Department of Agriculture and Food and also in Brussels to have money made available from the coresponsibility levy to grant aid the purchase of milk cooling equipment. During the period 1978-86 EC grant aid for the purchase of on-farm milk cooling equipment was funded from the co-responsibility levy. Ireland benefited to the tune of £7.3 million. However, in 1986 the Commission took a decision to have the scheme discontinued as they felt they had allocated sufficient funds over the years for on-farm cooling equipment. A submission was made by the Department for funding for refrigeration from the co-responsibility levy in the 1991-92 milk year.
The only way I can see the Department making money available is through savings made from other areas. I appeal to the Minister that if savings are made in the pollution control area he will apply them to the cost of refrigeration.
I thank Deputy Deenihan for raising this matter. I have a personal interest in it and I will be as helpful as possible.
As part of the 1992 Single Market programme, the EC Commission has submitted proposals to harmonise standards for health and hygiene both in relation to liquid milk for human consumption and to milk for the manufacture of dairy products. While these are only draft proposals which are being technically examined at present prior to their submission to the Council of Ministers, there is no doubt that in whatever final form the proposals are eventually agreed they will involve significent investment, particularly at farm level, to ensure compliance with the Common Agricultural Policy. In that context, of the significant investment, farmers should be supported financially.
In the Programme for Economic and Social Progress, the Minister, Deputy O'Kennedy, has already raised with the Commission the question of allocating Community funds to assist with the adaptations necessary to meet with the proposed regulations. In addition, an industry working group composed of representatives of the Department of Agriculture and Food and the farmers' organisations has been established to examine the implications of the Commission's proposals and to formulate a detailed submission that would be used in pursuit of our request for Community aid. The working group have already held two meetings and they have been requested to complete their work as quickly as possible.
Our approach to the negotiations on these measures will be to ensure that whatever standards of milk quality are agreed are reasonable having regard to all the circumstances. In the meantime, I can assure the House that the provision of Community funding in this area is a priority matter for us and we will be pursuing this issue as vigorously as possible with the Commission and hope for a positive outcome.
Deputy Deenihan may now put the second matter.
I understand the income supplement promised to farmers will be paid in cases where disease breakdown results in the removal of more than 10 per cent of animals in a herd but where depopulation is not deemed appropriate. Payment is in respect of each animal removed, as a reactor, from herds in which there are 100 animals or fewer on the date of restriction and will be at the rate of £25 per month for suckler cows and £15 per month for dairy cows and other animals. Feeder cows and other animals in feed lots do not qualify for these grants.
At the moment over 185 herds are locked up in Kerry and this is a source of considerable hardship to many farmers. I suggest that the income supplement scheme be introduced as soon as possible. It should apply to all herd owners, maybe with a modulated payment for those farmers with over 100 animals. I am sure the Minister will agree that herds are locked up and restricted for too long. Herds should be derestricted as soon as possible so that farmers can pursue their normal farming activities. A sum of £4 million has been allocated under the ERAD budget specifically to fund farmers who have suffered financial hardship because of extended restriction.
When will this money be given to farmers? Can the Minister tell us tonight? Will payment be made retrospective to January 1991?
I am fully aware of the practical difficulties which can arise when a TB outbreak is confirmed on a farm. First, the herdowner is required to remove the reactor to a designated meat plant. ERAD provide a free reactor collection service and the herdowner's reactor animals are transported at no charge to the herdowner. The meat plant pays the herdowner directly for the value of his animals as reactor carcases. In addition, ERAD pay a reactor grant in respect of each reactor animal to an amount depending on the type of animal.
Generally speaking, the ERAD grant is designed to bridge the difference between the slaughter price and the cost of an equivalent animal. Grant levels are reviewed on a regular basis to take account of market trends and prices.
An independent study carried out recently by Professor Seamus Sheehy of University College, Dublin, concluded that the present grant system was, in broad terms, fair in its application. Having removed the reactors, the herdowner is faced with a period of restriction during which animals can be moved into or out of the holding on a permit basis only. To take account of the financial pressure which may arise as a result of restriction, income supplement is paid by ERAD to qualifying herdowners in respect of each full month of the period during which the herd is restricted because of bovine TB, including any period of extended restriction.
I am advised by the director of ERAD that the ERAD Board are currently reviewing the income supplement mechanism with a view to making certain modifications primarily designed to channel the supplement towards herdowners undergoing real financial hardship. I am awaiting the outcome of this review and my expectation and hope is that a better system will be devised to meet the situation.
Deputy Finucane will now make a statement appropriate to the Minister for Industry and Commerce, lasting two minutes, and the Minister or Minister of State has two minutes to reply.
It is over six months since the IDA got the mandate for industrial development for overseas industries for the mid-west region but over a period of time there were two projects which were very much in the news in Newcastle West. I refer to the Bartizan project and the Gogi project. In a previous ministerial response which the Minister for Industry and Commerce, Deputy O'Malley, gave at the time the impression I got was that the Bartizan project had disappeared into the sunset and was no longer destined for Newcastle West and that the Gogi project was under considerable doubt. The people of Newcastle West have become a little cynical about industrial promises at this stage. I can fully understand and appreciate their cynicism. We have two advance factories in Newcastle West of about 18,000 square feet which have been refurbished at a cost of £350,000 to make them aesthetically pleasing to industrialists.
There is a feeling of disappointment in the Newcastle West area and I want reassurance from the Minister that something positive is being done. The declining number of industrialists coming into the area are concentrating their activities in urban areas, particularly Limerick city and the Plassey area. I suppose this is understandable in view of the third-level educational establishments there.
I should not like to see Newcastle West and other areas of the county deprived and denuded of industry. The Minister might indicate that something positive is happening and that efforts are being made to attract some industrialists to the Newcastle West area. Industry would be very desirable in the area. I compliment Abbeyfeale on its success in relation to the Kostal project and the expansion which is taking place. With a Minister of State in west Limerick, there is a feeling of disappointment that nothing is happening in Newcastle West.
On 28 November last the Minister for Industry and Commerce indicated to the Deputy that grant assistance had previously been approved for projects by both Bartizan Corporation and Gogi Brothers Knitwear by Shannon Development.
In the case of Bartizan, Shannon Development have had further discussions with the company since then in relation to establishing an operation in the Shannon region. I understand that at one stage the company were looking at the possibility of establishing a distribution type operation in the Shannon free zone. However, due to pressure on distribution space in the zone, Shannon Development encouraged the company to consider Newcastle West as their first choice location. The company have yet to finalise their decision on the matter.
In the case of Gogi, the company were approved a grant aid package in December 1989 for a project which was to start up in 1990 in Newcastle West. However due to delays in sourcing production equipment from East Germany and the need to firm up on market outlets in some European countries, the promoters decided to delay the project.
I understand that the last formal notification received from them was to the effect that they were delaying start up of the project until February-March of this year. Since then they have not responded to requests for a revised start-up date. I understand from Shannon Development that the company's reservation on one of the units at Newcastle West has now been cancelled and that the building is, accordingly, now available for promotion to new overseas companies.
So far as site visits to the units on the industrial estate are concerned, this is, essentially, a day-to-day matter for the industrial development agencies involved, namely, SFADCo and the IDA. I am satisfied that the arrangements agreed by the two agencies for encouraging possible industrialists to visit the region are satisfactory and are working well. I have no doubt that they are doing everything possible at present to ensure the establishment of new industry and the development of existing industry in and around Newcastle West.
The Dáil adjourned at 9.15 p.m. until 10.30 a.m. on Wednesday, 1 May 1991.