Vol. 478 No. 2
7 Mr. J. Walsh asked the Minister for Agriculture, Food and Forestry his priorities for the development of the diary sector, including the milk quota regime in relation to the EU mid-term review; and if he will make a statement on the matter. [10938/97]
The present milk quota system is legally in place until the year 2000. The Commission has undertaken to present later this year its analysis of the market situation and the international environment likely to prevail thereafter, as well as the policy options for the dairy regime in the coming decade. Discussions on the future of the dairy regime will begin in the Council of Ministers over the coming months.
My priorities in these discussions will be to ensure that whatever EU policy framework is adopted is one in which the Irish dairy sector can continue to develop and increase its contribution to rural Ireland and to the wider national economy.
The Minister's reply is not very elaborate.
First I pay tribute to you on the occasion of your announcement that you do not intend to return to us. I had the privilege and honour of accompanying you on delegations abroad. Not alone did you give sterling service and representation to your electorate in south Tipperary, you represented the country magnificently abroad and have always ensured that the primacy of this Chamber, our National Assembly, Dáil Éireann, was to the fore and got the utmost respect from the Members. For that I thank you.
The Deputy is very kind.
In the context of the mid-term review, what amendments to the present milk quota regime will the Minister seek to ensure that small quota holders and new entrants in particular can look forward to viability in respect of their small dairy farms?
Let me digress also. It was a great pleasure for me, a Cheann Comhairle, to visit Japan for two weeks in 1987 under your excellent leadership. I too would like to be associated with what Deputy Walsh said and to place on record that you are one of the finest Cinn Comhairle this House has had. You have always acted impartially and fairly, regardless of who was in Government or in Opposition. I wish you and Kitty a very happy and long retirement. You can be very proud of your distinguished public service record.
Thank you, Minister.
In regard to the Deputy's question, there are two points in question. There will be a mid-term review vis-á-vis Structural Funds in July this year which will look at the question of allocations of spending in the period 1994-9. Quite separate from that, the milk regime guarantees quotas to the year 2000. Thereafter, there will be no such guarantee of quotas.
As to what would be in the best interest of Ireland, I set up an expert private non-representational group who will shortly present its conclusions.Any reform of the milk sector will have to take into account the next round of the WTO and enlargement of the European Union. My own view is that there will be no quick abandonment of milk quotas, but they are unlikely to remain in perpetuity because Europe's share of the global market since the introduction of milk quotas in 1983 has dropped from 50 per cent to 30 per cent. However, we have maintained dairy incomes and a price for milk which is not obtainable outside the Union. For those reasons we favour a transitional approach. There are a number of options, but we will be seeking two basic principles, full compensation in terms of a dairy cow premium if there is any reduction in price, and that there will be no renationalisation of the dairy sector in terms of aid to producers. The House can be assured that because we have about 40,000 family farm dairy producers I am very anxious to ensure that the maximum number of them survive into the future.
I take it that the Minister is in favour of the continuation of the milk quota. What are his views on negotiating a beef quota?
It would be wiser for us to await the detailed EU market analysis for the dairy sector. I have just returned from Brussels. Only yesterday the Commission circulated an initial market prognosis for the next number of years in terms of demand for world product and supply from Europe and other countries. It is expected that within the next two months there will be a more detailed analysis of the dairy sector. It is expected that there will be detailed discussion on the dairy sector at the informal council in Holland on 24 and 25 May. It would be better for all interests to keep our powder dry other than to establish the tenets of full compensation, no renationalisation and the maximum level of supports to ensure the retention of dairy farm numbers.
Regarding the Minister's views on the development of the dairy sector, to what can dairy farmers and those in the development category look forward following the recent court case? What are the Minister's views on recent merger proposals in the dairy industry? What does he intend to do about the claw-back scheme which has been ineffective and has he any plans for a subsidy scheme for restructuring smaller farms?
There is a whole range of questions there.
We are interested in the answers.
The claw-back is working well. We have effectively put a 10 per cent penalty on private transactions. The chequebook should not determine who gets milk quota. That should be done through the co-operatives. I favour mergers and consolidation in the dairy and the beef sectors.Any specific proposal is a matter for shareholders.We can obtain efficiency gains of 5p a gallon in milk or 2p or 3p a pound in beef by obtaining the latest technology and volume processing.The question of any restructuring fund would require the allocation of extra resources of Structural Funds which would have to await the mid-term review.
