Simon Coveney (Cork South Central, Fine Gael)

I will leave aside my notes to answer this question because otherwise I will have to stop half way through and the Deputy will not receive a full response.

There is much concern in the dairy industry about a soft landing for the sector as we approach the end of milk quotas in 2015. There was much concern until a few days ago that there would be a super levy applied to Ireland for over-production of milk in the past 12 months. I am glad to be able to say that is now unlikely, as it looks as if we will be just under quota. Therefore, the many farmers who produced well above quota, some of whom are based in my county, and who took a chance this year are lucky a superlevy will not be applied because many of them would be put out of business if it was.

I want to issue a warning to ambitious farmers. We want to encourage their ambition to increase milk production dramatically after 2015, but there is no political solution to the problem between now and 2015. The solution provided to date by the European Commission is that it will allow a 1% increase in quota each year until the end of the quota system. That is not sufficient for Ireland and the proof is that the cost of quota being traded has not fallen, despite the fact that the regime has only a few years to run.

Ireland is not the only country experiencing this problem. For example, the cost of quota in Denmark is at an all-time high. Some four or five countries in the European Union, one of which is Ireland, want to dramatically increase milk production following the ending of the quota system. We need to try to find a solution that will allow for countries such as Ireland that want to expand and grow a dairy industry and to ramp up capacity to deliver on this objective between now and 2015. I will continue to work with the European Commission to try to bring about a solution. However, farmers must beware because as yet there is no solution.

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