Dáil Éireann díospóireacht -
Tuesday, 7 Mar 1995

Vol. 450 No. 2

Private Members' Business. - Excess Milk Supplies.

Mr. E. O'Keeffe

I should be glad to share my time with my constituency colleague, Deputy Paul Bradford.

I congratulate the Minister of State at the Department of Agriculture, Food and Forestry, Deputy Deenihan, on his appointment and wish him every success in his endeavours to bring about a more successful and profitable agricultural industry. I have no doubt that he will be successful in that aim.

It gives me no joy to raise such an important matter on the Adjournment as three weeks only remain of the quota year 1994-95. This country to date has 12 million gallons of milk above quota at a cost of £16 million to our farmers and the State. A huge amount of money must be found. This is the highest recorded increase since the quota was introduced many years ago.

I am firmly convinced that, were the quota based on the calendar year, it would not be as difficult for farmers to control the problem but they have no choice at present. I would urge the Minister of State to renegotiate the terms of the superlevy in Brussels, ensuring that it is based on the calendar year. Up to 1 January last 4,000 farmers had been affected and had not received any milk cheques for four months. Since then an additional 2,000 farmers have been penalised, representing a total of 6,000 farmers.

This island is entitled to some concession from the European Union. In this respect I shall outline a number of options to the Minister which I have no doubt he will take on board. Since he fully understands the position, I am convinced he will do his level best. There should be agreement on both sides of the House on this very important matter. The quota year 1994-95 should be rolled over into 1995-96 because of the bad weather and high costs of production and the consequent hardships. That would be a good option and allow all farmers to be paid for milk supplied in 1994-95.

The other option I propose is that the Minister seek a meeting with his agricultural counterparts in the Commission, requesting that the rules be relaxed on the transfer of milk from one member state to another. I understand that the Netherlands is 0.03 per cent under quota and Germany 2 per cent under quota. These two countries have a huge milk pool. The Commission should divide the flexi-milk available from those countries between all the countries over quota. Since we have one of the smallest quotas and gallonages within the European Union, if that proposal were accepted we would overcome our difficulty, thus allowing farmers to be paid. This represents a very constructive option which should be pursued.

The Minister should also seek a concession from the European Union that excess quota milk be processed at dairies, allowing farmers to recoup that milk for domestic usage and animal feedstuffs. That should have been an option long before now in other years when we had excess quota.

Many farmers are almost facing bankruptcy and will be unable to maintain themselves, their families or their livestock or to buy feedstuffs. I am convinced that some farmers will have to dispose of assets to overcome this crisis. I urge the Minister to seek some help from the financial institutions in making soft loans available to farmers, at low interest rates, to allow them overcome these difficulties.

Mr. Bradford

I thank Deputy O'Keeffe for sharing his time, even if he is doing it in the same unequal fashion in which he shares votes in the Cork East constituency.

This is an extremely serious issue, not just for farmers in the Cork East constituency but nationwide. I welcome the fact that Deputy O'Keeffe has put forward some constructive proposals on the manner in which this problem can be tackled. It is always easy to highlight difficulties but much more difficult to resolve them. I wish to place on record my previous support for the concept of a January to December milk quota year, a matter I raised on a number of occasions in recent years with the former Minister, Deputy Joe Walsh. The calendar year would make a lot of sense, giving farmers control over their milk production at a crucial time in the year. While it will not solve the problem for the current milk marketing year I hope the Minister will examine if for 1995-96.

Like Deputy Ned O'Keeffe, I appeal to the Minister and his Minister of State to do everything possible to alleviate the great distress the present milk quota surplus is causing.

Minister of State at the Department of Agriculture, Food and Forestry (Mr. Deenihan)

I thank Deputy Ned O'Keeffe for raising this matter this evening and for allowing Deputy Bradford to share his time. Obviously the relationship between the two Members is very good and long may it continue.

As Deputy Bradford said, it is always easy to be critical and apportion blame but Deputy O'Keeffe put forward some constructive proposals worthy of examination, something on which we can speak at greater length later. The Minister and I are concerned about the milk quota. It is our hope that measures can be taken by farmers themselves to reduce their burden somewhat, although they will have to exercise much discipline over the coming three to four weeks to safeguard against further losses.

The milk quota system is, as the term implies a method of restricting the level of milk production. Like all other member states in the European Union, Ireland has a national milk quota and can therefore, produce up to that level without penalty. Milk production in excess of the national quota is however, subject to a superlevy. Superlevy liability is calculated in accordance with EU legislation on the basis of actual milk deliveries to registered milk purchasers in the milk quota year.

Producers are advised by these co-operatives/dairies on a regular basis of their milk quota position. My Department also issues regular statements on the milk quota position nationally. Producers who exceed their quota are advised to keep in contact with their own co-operative/dairy or with their Teagasc advisor who will advise on practical measures which will help to reduce their milk deliveries. A reduction in the milk yield may be possible by reducing feed to some extent in certain circumstances. Surplus milk can also be fed to calves. The milk quota system has been in place for over a decade. In overall terms we have managed to fill our national quota to full advantage. Significant superlevy bills have only arisen in two years out of ten.

In the context of the quota situation this year. I suggest that any proposals for reducing or even averting superlevy liability which are not legally practicable are unhelpful at this stage of the quota year in that false hopes of avoiding a levy liability may be raised. We also need to be careful that we do not pursue short term solutions which could work to our disadvantage in either the medium or long term.

Certain measures are in place within the various milk quota arrangements which help to minimise, in so far as possible, the levy liability of priority category producers. Small-scale producers with quotas of less than 30,000 gallons, for whom a levy liability is particularly severe are, for example, given first priority access to any unused reference quantities available at the end of the milk quota year. Apart from this entitlement to flexi-milk, these producers are also given first priority under other milk quota schemes such as temporary leasing and restructuring. Therefore the system has been biased in favour of the small to medium producer.

From a practical viewpoint, therefore, I can only urge producers to consider their circumstances carefully, bearing in mind the financial consequences of a levy liability. Much can be done between now and the end of the quota year to further reduce the potential liability if individual producers and purchasers continue to monitor their situation carefully. I, too, favour following the calendar year in this regard and that is something this nation must consider seriously.