Vol. 470 No. 5
15 Mr. Kirk asked the Minister for Agriculture, Food and Forestry if he will give details of a recent reported remark that it is probable that milk quotas will be abolished around the year 2006; and if he will make a statement on the matter. [18076/96]
The European Commission has not as yet come forward with proposals in relation to the future of milk quotas after expiry of the present regime in the year 2000. Discussions on the future of EU dairy policy are scheduled to begin next year and in that context the role of quotas in that policy will be addressed.
While it is possible to speculate on the nature of certain external pressures and developments likely to be in evidence in the early part of the next decade, it is too early to predict the precise effect of these on the CAP, including the milk quota system. The focus of any discussions on this issue will be determined by the nature of proposals put forward by the EU Commission. It is expected that under the Dutch Presidency, provided the beef reforms go through under our Presidency, the dairy sector will be the next area of reform. Commissioner Fischler had no proposals for reform in this year's price package on the dairy sector because of that expectation.
The purpose of this question is to start a much-needed public debate on what is in our best interests regarding the reform of the milk sector and whether quotes, which have served their purpose in stabilising the market, should become a permanent feature or be scrapped. Would the Minister agree that from an administrative point of view at Commission level, there may be a tendency to retain them for the administrative convenience to policy makers? They could monitor production levels throughout the Community.
Would the Minister also agree that Ireland must address the serious question of whether we wish to retain milk quotas? Does he agree with the independent scientific advice from agricultural economists which suggests Ireland could double its milk output in a post-quota milk regime? We can produce milk from our grassland-based agriculture industry far more efficiently than practically any other part of Europe and it can be produced as efficiently on smallholdings as on larger holdings. Given the age profile of farmers generally and that dairy farming is five times more profitable than any other farming enterprise, does this not present a golden opportunity for Irish agriculture to get out of the straitjacket imposed by the quota regime since 1984 and to give a real opportunity to young farmers——
This is a Second Stage speech.
The Chair does not require the Deputy's assistance.
——in a post-quota era? Does the Minister not agree that this should be seriously considered?
For Members' information, I have set up a small expert group of some of the best people in the milk producing and processing sectors. They are due to report shortly on the best options. The Commission has not formed a view yet. The quotas will be there until the year 2000. We have to look at this in the context of the next GATT round. Some of the options are: maintaining the status quo, letting the price come down and having a dairy cow premium as was done in relation to beef; having an A quota and a B quota; having no quota. The big advantage is that we could produce unlimited quantities, but it would be at the expense of price. It is reckoned the European subsidies on milk work out at about 40p a gallon. If we dismantle the structure and allow the cheapest dairy producers to produce unlimited amounts of milk, as happened in New Zealand and Australia, we have to weigh up whether we can produce milk cheaper than anyone else and how our markets would be affected. Given that people are paying such large sums to purchase or lease quotas, they should know what is going to happen well before the year 2000. My instinct is that there will probably be a transitional phase which the provision of A and B quotas would allow for. However, if there is a B quota the A quota price would drop.
I hope I have given the House a flavour of the permutations. We have not finalised our own position. However, I am getting the very best advice on it and hope to have a report within a matter of weeks.
I am grateful for the Minister's response. Could he inform the House when he expects the expert group to report? Is there any prospect of making expert group reports public when they become available so that everybody can get involved in the debate? There is a tendency, once an expert group's report reaches the Minister, for a veil of secrecy to be thrown over its contents so that we cannot have the sort of informed debate that would educate us all on the best options. When will the report be brought forward to enable us to join in the debate?
On the question of A and B quotas, would the Minister agree there are serious questions regarding the acceptance by us of a B quota, since there is a strong body of opinion which suggests that the A quota for us would be in terms of what we can produce nationally and the B quota, given that we are more export oriented, would create a serious imbalance in terms of price vis-à-vis the present position. I accept that the Minister is awaiting the expert review report. I hope the review group will report shortly and that we will have access to the report so that we can continue this discussion on a future date.
The report will be available within a matter of weeks, certainly before Christmas. Regarding publication, I have no difficulty with publishing anything in so far as it is a matter of public debate and interaction. However, some of the people involved are prominent in large organisations and join expert groups because of their expertise in certain areas. Their opinions are given in their private, not their representational, capacity. It would be known in the industry who the members of such groups are. The groups could include representatives from IFA, ICMSA or ICOS who are there because of their personal expertise, and they might oppose the publication of the report. I would be prepared to publish a discussion paper setting out the facts and, in that regard, Mr. Brendan Carney has been doing a study in conjunction with Teagasc.
