Simon Coveney (Cork South Central, Fine Gael)

On the question about the farm consolidation relief, I would like to see this re-introduced but it is not a decision for me. I have made the recommendation but we will have to wait for the Department of Finance to issue a response. I do not want to make too many promises in advance of the budget. We have a package of taxation measures which are currently under consideration. We have submitted them in plenty of time and I hope I can have the majority of them agreed. The farm consolidation relief is one of them.

If primary legislation is required to deal with partnerships, I am happy to introduce it. I am informed much can be done without the need for primary legislation. Teagasc is supportive of this concept and it has done a lot of work in this regard. I am hopeful that next year a number of partnership pilot projects will be set up in the west and in other areas and in different types of farm settings in order to demonstrate to other farmers how this can work without a compromise of their ownership or their decision-making. It will also show them that they can also forego participation in the partnership model if they wish and without a large cost to themselves as I understand this is a big worry for farmers.

The Deputy is correct in his view on processing capacity. The required investment by the processing sector in Ireland could be measured in hundreds of millions of euro over the next ten years in order to deal with the increased volumes of milk. We must face the fact there has been no investment at all in dealing with extra volume of milk since the mid-1980s, since quotas were introduced. We still produce 5 billion litres of milk every year, just as we did in the mid-1980s. I acknowledge there is an issue. As quotas are phased out we will also see contracts being phased in. In other words, there will not be an unbridled expansion of milk production as farmers will not be able to produce whatever they want and expect it to be bought and collected from their yards. We will need to have some kind of contract or supply model or a co-operative model to respond to an absence of quotas. The challenge is to ensure that this is provided in all parts of the country so that farmers will have an opportunity to expand.

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