Simon Coveney (Cork South Central, Fine Gael)

Under the milk quota regulations the approximately 80 registered purchasers of milk are obliged on 31 March each year, which is the end of the milk quota year, to draw up a statement for each of the 18,250 milk producers that supply milk to them. The statement should set out, as a minimum, the quantity and fat content of the milk delivered by each producer during the quota year. Each purchaser is then obliged to submit to my Department, before 15 May of each year, a declaration summarising the statements received from the milk producers. It is only when these declarations are received that my Department will be in a position to make a definitive statement on Ireland's liability regarding a super levy fine.

However while awaiting this definitive information my Department did gather preliminary information from the purchasers, as it does at the end of each month, to give farmers and the industry in general an earlier estimated position. On Tuesday, 24 April last I announced that with 99% of the returns then received from the co-operatives, the level of milk deliveries up to end of March 2012 was estimated to be at 0.69% above quota, following estimated adjustments for the butter fat content and the leap year. Based on these estimates a national super levy fine in the region of €11 million liability was expected. I hope by the end of next week to be in a position to announce more accurate figures on the national milk quota position.

This is an unfortunate situation which had been predicted. We had a very strong first three months in terms of the growing season. We had a very mild winter this year which meant grass grew and dairy farmers produced more this year than last and this pushed our producers over quota. We were not able to get the flexibility which five or six countries had come together to seek with regard to butterfat adjustments which would have kept us within quota but I had been predicting since late last year this would be very difficult.

Towards the end of this year we will have a review of the so-called "soft landing approach" and a milk health check and this will be an opportunity for us to debate more flexibility on quota management between now and 2015 when quotas go. At present it is clear our industry is bursting at the seams. It wants to expand and grow but is being held in the straitjacket of a quota system. We need to try to ease out of this slowly and this is in the interests of everybody, including other European countries, rather than having a situation in which people are held back and all of a sudden a great deal of extra milk is released into the system. This is why we need a serious debate at the end of the year when we will review quota management policy at European level.

Additional information not given on the floor of the House.

It will not be possible, however, to provide the specific information requested by the Deputy for some months to come because staff in my Department have to engage with the co-operatives and the milk suppliers on milk quota transfers, dormancy allocations, allocations under the animal disease and hardship schemes, as well as distribution of any surplus quota that may be left in the national reserve, referred to as "fleximilk". This task should be completed by late August, thereby allowing the co-operatives notify each milk producer who has a super levy liability of what that liability is and request that it be paid to my Department by 1 October 2012. My Department is then obliged to make a payment of 99% of the full national levy to the Commission before 1 November 2012.

As I have acknowledged previously, farmers were faced with very difficult choices over the past 12 months in trying to get a balance between the very attractive prices being paid in response to a strong global demand for dairy products and the limitations placed on them by their individual milk quota allocations. There is no doubt that last March presented all of the elements for successful milk production with increased calving, good weather and good grass growth, and this resulted in the volume of milk produced in March 2012 being about 8% higher that the corresponding month in 2011.

I have to remind farmers that, notwithstanding the annual 1% increase which is allocated again this year as part of the soft landing and a softening in the global markets, the three remaining quota years are going to be equally challenging for farmers to remain within quota. Consequently farmers should plan their production activities carefully and pay close attention to the limitations imposed by the quota regime.

For my part, I intend to continue my efforts to raise the issue of the soft landing at every opportunity with member state colleagues and with the Commission in order to ease the transition to the post quota situation for Irish farmers. At this point however, it would appear that a majority of member states do not support any further adjustment to the soft landing, and therefore farmers should plan for the continuation of the quota regime until March 2015.

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