Éamon Ó Cuív (Galway West, Fianna Fail) | Oireachtas source

I welcome the witnesses to today's meeting. The annual report which we received also contains useful data and statistics. On page 3 of the 2011 report it is stated that the continued availability of all-year-round milk supplies from registered producers cannot be assured at this level of compensation given the rising costs of winter milk production and the growing attraction of a seasonal milk supply model in a post-EU milk quota environment. Is that still the view of the agency?

The report also states that if the contract is to be registered by the agency it must provide, in the opinion of the agency’s members, adequate compensation to the producer of milk supplied under the contract, taking into account in particular in relation to the winter months the economic cost of production of milk of suitable quality. From what we heard today, the farmers are saying to us that is not happening. In other words, they are not getting paid for the milk they produce and taking all their costs into account they are losing money. Do the witnesses agree that farmers are not getting adequate compensation? That seems to be a theme running through the presentation. What legal powers are available to the agency in overseeing the contracts if it believes there is not adequate compensation. It is no good giving the agency a job to do if it does not have the wherewithal to do it. Should the agency have additional legal powers to ensure we get milk on the shelves every day?

In view of what the witnesses said about 2012 and 2013 on page 5, taking all of the complexities of the modern market into account and the fact that the agency has no input into what comes in over the Border, what is the likelihood that in the next two to three years we could run short at any time of the year for one day or one month?

The next issue relates to an issue I raised previously. The witness said the agency issued a press release advising producers, processors, organisations and major retailers of the agency's concern that the exceptional increases in the production costs of fresh drinking milk in 2012 were making the production of winter milk supplies for the domestic fresh milk market unviable and unsustainable. The agency spends €600,000 a year and when a major crisis occurs, we get a press release. I do not want to be critical but is the agency powerful enough from a legislative point of view, and we are the only ones who can remedy that, to do something or should it be given extra powers? Mr. Murphy was blunt when he stated that the draft code should be on a statutory basis, with enforcement powers, but saying that there should be criminal sanctions is a different matter. That would be a major addition, because time and again I have seen the weaker party with a legitimate grievance and probably good grounds for a court case not going to court. What Mr. Murphy said is interesting.

Mr. Murphy stated that the use of fresh milk as a loss leader or its sale below cost should be strictly prohibited. Does he believe the abolition of the groceries order was a mistake? Should we reverse that decision?

Mr. Murphy spoke about the labelling and I am delighted he said that we could and should do what was proposed. I suggested at a previous meeting that, say, one third of the package would have to identify the processor. I am not talking about a tiny reference one would need a microscope to read. One sees lots of figures and dots on packaging these days, and that is grand if one is educated in it, but I want something that the consumer can see immediately, whether it is milk from Glanbia or whatever. Will Mr. Murphy elaborate on what he said? How large should the processor's name be on the package? I am aware processors get milk from various suppliers, but if it was clearly labelled, processors could advertise that they only use milk sourced from farmers in wherever.

An issue was raised with me that Mr. Murphy did not mention. There is a processor in Donegal who does not come under the agency. He mentioned in his report that two processors do not come under his agency because they source all their milk in Donegal. The allegation made to me is that one of those processors is sourcing some of the milk in the State. If somebody is claiming to source all their milk outside of the State, how does the agency know that? Can the agency check records? Does it have the legal power to go to the remaining processors it does not check and ask to see their books, whether they are getting all their milk in the State and, if that is the case, tell them that they have to have these registered contracts?