Simon Coveney (Cork South Central, Fine Gael) | Oireachtas source

I too pass on my congratulations to Deputy Martin Ferris.

It is not true to say we are going to have to pay an LPIS fine of €180 million. That is what the Commission has proposed but we are very much opposing it. It has gone to conciliation and is still in process. It is important to put that on the record.

The rules governing the imposition of a superlevy fine are set by regulations agreed at EU level. Under these regulations each member state is allocated a volume quota of milk, above which a superlevy fine, which is just over €0.20 per litre, has to be paid to the EU Commission by producers who contribute to the over-production. As the Deputy will know, we had a very strong growing season last year. We had strong prices for most of last year and an awful lot of farmers are planning for the abolition of quotas in the next couple of months. As a result of that, we have seen the production levels on Irish dairy farms higher than we would have liked. In autumn, we were looking at a very large superLevy fine. By the end of January the quota position looked at being 5.47% over quota, which would essentially mean a superlevy fine of about €88 million. It is a significant issue. I have been pushing for ways in which we can reduce the superlevy fine in the final year of milk quota as a way of soft landing, which was supposed to be the idea.

A majority of EU member states, in many ways under the leadership of Ireland in terms of the position we had taken with three or four other countries, looked for what was called a butterfat adjustment which, effectively, would have given us an extra 2% in our quota. We also looked at reducing the super levy fine per litre in the last year to ease us out of quota management, but that has not been possible. What has been possible is talking to the Commission to ensure any super levy fine incurred would be paid over a number of years. We are continuing to negotiate with the Commission on that issue. It has indicated that it is happy for farmers to be allowed to pay super levy fines they may have incurred to co-operatives over a number of years. We are still negotiating with it on whether co-operatives and Ireland should be able to pay it over a prolonged period of time also, which would certainly ease the blow.

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