Thursday, 8 March 2007

Ceisteanna (7)

Gerard Murphy


7 Mr. G. Murphy asked the Minister for Agriculture and Food the steps she is taking to increase the amount of milk quota available in the second phase of the milk trading scheme; and if she will make a statement on the matter. [8804/07]

Amharc ar fhreagra

Oral answers (9 contributions) (Ceist ar Minister for Agriculture and Food)

The first milk quota trading scheme ran successfully in January and resulted in 120 million litres of quota being offered for sale, with 73 million litres traded. The second stage of the scheme has a closing date of 9 March and the exchange will be run in April.

The trading scheme which has replaced the restructuring scheme from the 2007 to 2008 quota year allows milk producers the opportunity to bid for the volume of quota required to meet the development needs of their farm enterprise at a price that will generate a commercial rate of return.

May Members take the reply as read?

That is fine, as Members already know the answer.

Yes. They will take it as read.

I thank the Minister for her brief reply. Will it not be difficult to retain ring-fencing when farmers in some locations only receive 11 cent a litre, while elsewhere farmers receive 24 cent a litre for the sale of milk quota? Farmers in the northern part of the country enjoy a highly positive inbuilt position. Is it possible that it will be dismantled because of this discrepancy?

There is much uncertainty about the trading of milk quota in respect of its value and whether farmers will be able access it. Is it not the case that this is leading to a significant degree of confusion and concern within the industry, especially given the massive investment farmers must now make in respect of the nitrates directive?

Has the Minister met the milk quota rights group? She stated she would do so. She may use this opportunity to respond to one item it raised. I refer to its suggestion pertaining to the clawback, namely, that it could be reconsidered in hardship cases arising from circumstances similar toforce majeure. Is this a runner?

Before this, the price of milk was 12c a litre. I am trying to introduce market orientation to the trading of milk. I consider that ring-fencing is still a good policy initiative. I have reviewed the milk quota system in its entirety and believe ring-fencing should remain. However, I have often stated publically that in preparing for the 2008 review of quotas people's opinions must be heard. What is the best option for Ireland Incorporated and what should be considered? Is it time to get rid of quotas in Ireland and the European Union? If we so decide, how should it be done? Alternatively, should it not be done?

There are many issues that will require time to be discussed and reflected on to ascertain the best option for Ireland in the coming years in preparation for what will happen in 2014. The Commission's view is known in this regard and we must now decide where we want to be. Ireland has always been highly pragmatic in the manner in which we have dealt with trade and quotas. While we are at a price of 12 cent a litre, many of my colleagues are at a price of €2.50, which simply is not economically viable, is competitively difficult and is causing enormous problems.

The new scheme which will be closed tomorrow will be highly beneficial. It has attracted great interest and the review by all the farming organisations has been positive. Equally, I hope and expect it will be highly positive on this occasion. As for the previous scheme that operated in the winter, I decided to run two schemes within this quota year because this constitutes a new regime, a new option and a new opportunity.

Quota is available in the part of the world from which the Deputy and I come; that was not necessarily always the problem. The problem has always been availability in the south. Consequently, with the availability of quota and tabulation, I expect people will make some very good decisions on this occasion.

What will I tell my fellow farmers in County Monaghan who opted out of milk and sold their cows on the understanding they would be able to sell their quotas this year? So far they have not been able to do so. Will the Minister sort it out once and for all so a farmer has a right to sell and buy? In my case, a small co-op has sellers and buyers and with common sense it could be sorted. A six page document relevant to the scheme ties them into a situation where if they do not obtain a sale, they automatically lose 30%. If their cows are sold, they cannot lease next year because they have no milk.

The Deputy must ask a question.

Will the Minister ensure these situations can be addressed?

I do not disagree with the Minister's wish to retain ring fencing, but I am worried it will not be possible in a legal situation. A long number of years have passed since a major quota left the north of the Minister's county of Donegal and went to the very south under a technicality. I am sure people are dreaming of technicalities at present.

I reassure the Deputy that ring fencing will remain. Those who sell expect a relatively good price and those who purchase do not want to spend an independent fortune on quota to expand. This is where the balance and permutations lie. If people wish to sell or buy quota at too little or high a price, they will be out of the system. Now they have the information available to them and regardless of what they do, they can be within the percentile of between 11 cent and 24 cent and 20% up and above and be within the system.

People should not sell for an exorbitant amount of money and realise that those who wish to purchase will not do so for exorbitant amounts of money on the basis of the policy framework in place. On this occasion, I am happy with what the outcomes will be.