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

I thank Mr. Forde for his interesting and comprehensive presentation. It was very useful. I have a few questions in order to get clarification on issues. Mr. Forde said the Irish price at the moment is about 30 cent per litre. The spot market price is quoted at 24 cent per litre. He said that the New Zealand world price was 20 cent per litre. Would he be able to hazard a guess as to where the Irish price, on present trends, will fall? How far can we sustain the differential by targeted marketing, premium products and so on?

The big concern at the moment is that there has been expansion in dairy product and in production. Presumably, some farmers have been doing this on the back of retained profits, have a lot of experience and very high productivity and will weather whatever storm comes because they have seen this coming and going in the past. However, are there farmers who have got into dairying, quota levels and so on, or who have been involved in major expansion in anticipation of the end of quotas and who have borrowed very significant amounts of money? One might say that the sustainability level in Ireland is x cent per litre and, on average, that might be true. However, have we any idea how many farmers are above that because of commitments made, namely, overheads, borrowing commitments and so on? These farmers might not be the most efficient or have the greatest experience. Do we know, as the price comes down, how many farmers are likely to get into financial trouble? Does the industry have a plan in place to try to assist these farmers and to avoid suddenly facing a crisis? Such a crisis might not affect all farmers but it might affect a reasonable number, particularly those who expanded too rapidly. Like many industries, when things were going well, there was a lot of talk about getting in more, producing more and borrowing more. As the price comes down, what is the tipping point at which we are going to see significant numbers of farmers getting into trouble?

Mr. Forde mentioned that marginal costs of production are lower here than they are internationally. Would it be possible to quantify this? Is it two cent per litre or three cent per litre? What is the difference resulting from the natural advantages we have with grass? This would give us some measure of how we can take a hit in terms of a change in the global price and how sensitive it is to price.

Will the reduction in energy costs have an upside or a benefit? Taking in the whole industry, is that significant? Taking it from grass production through to getting it on the market, how much will it be a counterbalance or does it have any significance at all? On mitigation, at the end of the day we are an Oireachtas committee and a big part of our role is to get information but what are the things we can do or what are the things, politically, that could be done?

I was interested in what Mr. Forde said about the superlevy penalty because I queried the Minister a few times about this. He seems to think the best he was able to achieve or was going to be able to achieve would be a deferral of the superlevy penalty. I know that the witnesses collectively, and as individual co-operatives, etc., have a lot of contacts in Brussels. Do they think there is a realistic possibility of getting the superlevy reduced? It seems to me to be farcical. There was some talk about the butterfat content and so on. Could the witnesses clarify what angle we should be pushing? What case should we make to the Minister? Is it on how it is measured as a superlevy or just a reduction of the superlevy?

The second issue Mr. Forde mentioned is that intervention at 20 cent per litre is too low and that it would have to relate to production costs. This goes back to my previous question on the marginal production costs. In the Irish context, what would that have to be, give or take? I will not hold the witnesses to the last cent but it would be important to give us the figure in ballpark terms.

We often talk about the promotion and maintenance of Irish agriculture products, whether it is beef or dairy, because it is grass-based. Is it sufficient for us to continue just to say it is grass-based? Does that suffice in the market? Will the day come when we will have to define what grass-based production or largely grass-based production is in order to reassure the market? Is that an issue we should be looking at in the medium term? Should we be saying that there will be a definition? There is a definition of organic farming. Do we need a definition and if so, would it be beneficial in the longer term? Should we have a certified definition of grass-based production to which a farmer could adhere? A person could then put a certificate on his or her product knowing no one else can claim to be doing it this way if he or she is not actually doing it the same way.