Dáil debates

Wednesday, 4 March 2015

4:45 pm

Photo of Michael MoynihanMichael Moynihan (Cork North West, Fianna Fail) | Oireachtas source

I welcome the opportunity to speak in this debate. I was raised on a farm that was confined to quotas since 1983 and having been a full-time farmer for almost eight years under the quota regime prior to coming to this House in 1997, I know at first-hand the difficulties and the significant constraints of the milk quota regime imposed on many family farms over the past 32 years. The date of 1 April 2015 is a date which many family farms across the length and breadth of the country have been eagerly awaiting in order to begin farm expansion. A number of issues need to be dealt with. I refer to Food Harvest 2020 which was initiated by Deputy Brendan Smith and the previous Government and which set the parameters for the expansion of the food industry and the dairy industry in particular, as the date for the abolition of milk quotas approached.

There has been significant investment in co-operatives, in milk processing and in farms. I had a most interesting conversation with an excellent dairy farmer whom I met in Mallow yesterday afternoon. He confessed to being a supporter of the party opposite. We had a great discussion about milk and milk policy and the issues related to new people going into milk production as opposed to the farmers already in milk.

The Minister alluded to some of the issues when he referred to a farmer milking 70 cows who then expands to milking 90 cows and an agenda is to get more money out of milk. However, many issues need to be teased out. I refer to the sound advice from Teagasc and the cost of production. There should not be expansion just for the sake of it, in particular, on family farms. We must ensure that farmers are completely equipped with the best possible information so that they get the most milk out of the number of cows. The number of cows may be important to farmers but the productivity on those cows is important. Some farmers may expand production by 50% or up to 70% and they are borrowing very great sums of money at 5% and 6%. However, they will spend a generation working for the bank in order to pay off those loans. I refer to the price guarantees over a number of years offered by milk processors. I have had many discussions with dairy farmers on this issue. The year 2014 was a very successful year for milk prices. The volatility that was perceived to be in the market has somewhat abated. My concern is to ensure that the farmers are given the best possible advice. The Minister, the Department and Teagasc are looking into a crystal ball in this respect but it is important that the best possible advice is made available to farmers when they are going into a milk contract. The price volatility in the past couple of months reminds me of 2006 when the progressive farmers' conference at the beginning of 2006 was one of the leading farming meetings to be held in January which is the quiet period on dairy farms. They looked at the price volatility during 2006 and they predicted an almost collapse in that price. As it turned out, what happened was almost the direct opposite. I kept saying to farmers to wait and see what would happen over the next while. The point I am making is that there needs to be better research about price volatility although it is not an accurate science. Everyone was saying that the price would collapse down to 24 cent, 25 cent or 26 cent, and farmers were saying they could not produce milk at that price-----

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