Wednesday, 26 June 1996
Seanad Éireann Debate
Mr. R. Kiely: I thank the Minister of State for being present in the House to respond to this matter, which is of serious concern in rural areas. Smaller farmers are baring the brunt of a series of hammer blows to farm viability. That the latest blow is coming from the Minister for Agriculture, Food and Forestry in the form of revised rules for temporary milk leasing is a disgrace. Family farms, some of which depend on temporary leasing for up to half and more of their quota, are now in a super levy situation in this only the third month of the milk quota year. Excuses about the outcome of the rule changes being unforeseen are unacceptable and are a damning indictment of the capacity of the Department to monitor the milk quota.
Fianna Fáil wants the changes in the leasing regime reversed now. The temporary milk leasing scheme has been in existence for a number of years and was available to milk suppliers with up to 30,000 gallons. Many small farmers with herds of 15 to 20 cows availed of the scheme to top-up their small quotas. Last year the Minister issued a notice informing farmers that the guidelines would be changed. He increased the quota to 35,000 gallons for 70 per cent of the milk pool, to 35,000-55,000 gallons for 20 per cent of the milk pool and in excess of 55,000 gallons or the remaining 10 per cent of the pool. I do not understand why the quota should be increased for farmers with more than 55,000 gallons. I know farmers with quotas of 70,000 gallons, which is the equivalent of 70 to 75 cows. With improvements in cattle breeding, you could get a herd of 60 cows to produce 70,000 gallons. The average milk yield of cows has been increased since the introduction of quotas in 1984. An  increase of 1,000 gallons is of little use to these farmers. However, small farmers with quotas of between 6,000 and 9,000 gallons have had their quotas reduced to 1,000 to 1,500 gallons and they are being put out of business. That is because of the new regulations.
Many young small farmers in my constituency had quotas of 10,000 to 12,000 gallons when they started in business and could secure an additional quota of up to 10,000 gallons through the temporary leasing scheme. In recent weeks these farmers have been told they will get extra quotas of 2,500 gallons which means a reduction of £8,000 in their annual income at a time when they are trying to build up their businesses. Small farmers have put a lot of expenditure to keep in line with EU regulations with regard to hygiene, etc. to ensure that they will stay in business.
This is a retrograde, insensitive, treacherous and barbaric decision and it is further evidence, if it was necessary, that the Minister is not in control or does not know what is happening in his Department. If this is not the case, then the Government must have taken a decision to do away with small farmers. It is absolutely outrageous that such a decision could be taken by a Government which includes so-called socialists.
In 1984, at the start of the milk quota regime, it was recognised that Ireland would have a case to seek an increase of quota at a future date. We did get concessions at the time because Ireland was a peripheral and developing country, but there was also a promise that we would get a quota increase at a future date. Both Italy and Greece have got significant quota increases. The reluctance of this Government to pursue extra quota for Ireland is inexplicable. The Minister has been in Brussels many times dealing with various agricultural matters and I want him to pursue a proactive agenda for dairy farming. We need to get increased quota from the EU. What we have at the moment is crisis management.
Mr. R. Kiely: The Minister has no plans to tackle stagnancy in the dairy sector. Young farmers have not got any chance to get a viable milk quota and the Minister of State is from a constituency that has many young farmers with small quotas. An increase in national quota, directed specifically at new entrants and small holders, would do more for rural development than any other development measure. A viable rural policy demands that we target small family farms and young farmers with a concerted development policy. In an ICOS report on the temporary leasing scheme, the total pool for temporary leasing has not been reduced as had been projected by Department officials. It is only down a little. The announcements that were made after the milk quota regroup, which the Minister referred to, do not help the small farmer sufficiently.
Mr. Byrne: I thank Senator Kiely for giving me two minutes of his time. I will not be long. I support Senator Kiely. The situation would not be as serious but for the fact that since milk quotas came in, the small producer has been treated shabbily. A man with a cheque book could buy the quotas he wanted and he might have 100 cows already. It was very unfair from day one, but the latest blunder has added insult to injury. Then a Government spokesman and Government Deputies and Senators on local radio tried to justify it and passed it over to this review body in the past ten days. The buck stops at the Minister's table. It is a thundering disgrace the way this matter has been handled.
These people, many of whom are young and starting out, have been treated shabbily. I appeal to the Minister of State, who comes from a county with many small producers, to do what he can to urge the Minister, even at this late stage, to give these people some hope of making a decent living. They were hoping against hope and now there is all this buck passing. I hold the Minister for Agriculture, Food and Forestry, Deputy Yates, solely responsible for the way in which this matter was dealt. This  country is cursed with review committees and commissions, but the buck stops at the Minister's desk. If he did not take time to read it, he should consider his position because the people's livelihood is at stake.
I received many telephone calls from people who were hoping they might get something. What do they get? They get contradictory statements in the Irish Farmers Journal and on local radio, and attempts by Government Deputies and Senators to justify what is happening. It is disgrace, and I appeal to the Minister of State to do something for the many young people who are caught. They are as entitled to make a living as anybody else and to give their families a chance.
Minister of State at the Department of Agriculture, Food and Forestry (Mr. Deenihan): I welcome this early opportunity to clarify the situation regarding the outcome of the first stage of this year's temporary leasing scheme and to outline the decision that I have taken on the operation of the second and third stages of the scheme. On the outcome of the first stage of the scheme, there has been much dissatisfaction expressed that the inadequate level of allocations to individual smaller scale producers under that stage was due to the changes which were made in the operating rules for the allocation of the leased quota.
The major change introduced on the recommendation of the milk quota review group in this year's scheme was that a fixed percentage of the pool was made available for allocation to certain categories of producers with the vast bulk of the pool, that is, 70 per cent, being made available for allocation to smaller scale producers.
The changed rules for the allocation of the temporary leased quota were not a major factor in the reduction in the quantities allocated to individual small scale producers. The primary factor was that the demand for temporary leased quota greatly exceeded the supply. While the quantity available for allocation amounted to 42 million gallons, the demand exceeded 130 million gallons.
 Contrary to the comments that the temporary leasing scheme was not biased in favour of smaller scale producers, I can confirm that the quantity already allocated to such producers has increased from 23 million gallons last year to 29.6 million gallons in the current year. This quantity represented 71 per cent of the total pool as against the 59 per cent of the pool which was allocated in the first stage of the scheme to the first priority category last year, so the category of smaller producer, to which the Senators referred, received more milk this year than they did last year under this system.
When the Minister announced the first stage of the temporary leasing scheme last April he indicated that he would review the situation for the second and third stages based on the outcome of the first stage. At my request, that review has now been urgently undertaken and completed by the milk quota review group. The review group concluded that while smaller scale producers as a whole benefited to a greater extent this year, there were producers who depended significantly on temporary leasing to cover their excess production, and who were now facing difficulties because of the reduced allocations due to greater overall demand.
Arising from the recommendations of the review group, the Minister has now decided to give total priority in the second and third stages of this year's temporary leasing scheme to producers with an available quota of under 35,000 gallons. Furthermore, within this category total priority will be given to those producers who were allocated quota under the first priority category of the 1994-95 and 1995-96 schemes, that is, producers whose available quotas in those years were less than 30,000 gallons. These producers' entitlement to quota will be based on the average of their allocations in those two years, subject to sufficient quota being available. It is only when the needs of these producers have been fully satisfied that  applications from others in the smaller scale bracket will be considered.
I am hopeful that this decision will ease the situation of those smaller scale producers whose needs are greatest. However, I would have to urge caution in that the final allocation over the two stages will depend on the amount of quota available. I would also urge all those producers who do not intend to fill their quota in the current year to participate in the temporary leasing scheme. This will enable them to continue to utilise their land for other purposes. For my part, the Minister has asked our officials to intensify their examinations of land and quota transactions between individual producers to ensure they are valid.
It is vitally important to emphasise that each individual producer is responsible for the management of his or her quota. Furthermore, it is also important to emphasise that the extent to which any individual producer can benefit from any of these schemes is totally dependent on the amount of quota which becomes available for distribution and the demand for that quota at any given time. We are also operating in an environment where demand under this scheme greatly exceeds supply. However, I want to reaffirm the Minister's intention to ensure that the operation of the milk quota system in Ireland will continue to be biased in favour of smaller scale producers. For example, the Minister has recently announced the introduction of a further scheme subsidising the purchase of quota by small scale producers under this year's restructuring scheme.
Finally, the Minister intends to review the outcome of the second stage of this year's scheme in September to see whether any further modification is called for in its third and last phase next December. I thank the milk quota review group and the Minister for responding so rapidly to the dissatisfaction among the smaller producers. The news should be welcomed by the Senators.
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