Dáil Éireann díospóireacht -
Wednesday, 23 Apr 1997

Vol. 478 No. 2

Written Answers. - Super Levy Problems.

Tony Killeen

Ceist:

47 Mr. Killeen asked the Minister for Agriculture, Food and Forestry the action, if any, he proposes to take to address serious income losses being experienced by dairy farmers and ongoing super levy problems; and if he will make a statement on the matter. [10678/97]

Hugh Byrne

Ceist:

50 Mr. H. Byrne asked the Minister for Agriculture, Food and Forestry the proposals, if any, he has to restore the price of milk to milk suppliers to the level of two years ago; and if he will make a statement on the matter. [10774/97]

Minister for Agriculture, Food and Forestry (Mr. Yates):

I propose to take Questions Nos. 47 and 50 together.

The determination of producer price is essentially a commercial matter between the farmer and the milk purchaser and is a function of a number of factors including the products into which the milk is processed and the market on which those products are sold. The price for butter and SMP is supported under the EU common organisation of the market for milk and milk products and managed in consultation with member states on the ongoing basis.

The fall in producer prices during the first quarter of this year is a delayed reaction to the drop in world market price levels from the unprecedently high levels achieved in 1995 and maintained through 1996. In addition, the revaluation of the green £ during the first quarter of this year has had some negative impact on producer returns this year. However, the compensation package of £21.7 million for milk producers, which I announced recently will go some way towards offsetting the negative impact of reduced support levels.

On the question of the super levy, the relatively high EU support price for milk is a function of the existing quota system. When a member state exceeds its reference quantity, a super levy becomes automatically payable. The quota system is operated in Ireland in such a way that small scale producers are given priority under the various schemes for the distribution of unused quota. I have recently announced the terms of these schemes as they will apply for the coming year and have ensured not only that this will continue, but that the more deserving cases will be more accurately targeted.