Dáil debates

Wednesday, 4 March 2015

5:45 pm

Photo of Séamus KirkSéamus Kirk (Louth, Fianna Fail) | Oireachtas source

I will summarise them at the end and I hope the Minister will address them. The introduction of the milk quota in 1983 came at a very inopportune time for Irish agriculture. For a number of years after our entry to the EEC, we simply were not sufficiently developed for such restriction. The increase in the New Zealand level of production since 1983 graphically illustrates the degree of disadvantage rural Ireland was placed at because of the introduction of the superlevy in 1983. The same explanations for its introduction that will be advanced now were also given then - the assured market supports, the issue of curtailing overproduction and the capacity of the market to take the production at the time. They are all the issues that were teased out across this floor at the time.

Deputy Brendan Smith, as Minister for agriculture, was the instigator of Food Harvest 2020, which set out the roadmap for the expansion of agriculture, with dairying identified as a clear growth area. The context for it is the growth in world population, the growth in the buying potential of the middle classes in new markets, which the Minister has been endeavouring to identify and to pursue through a decent marketing strategy. Last year was a relatively good year for milk prices. Prices softened in the middle of the year and into the tail of the year there was a steady decrease and there was decreased demand for reasons I will come to later. Unfortunately, the predictions for milk prices in 2015, particularly the quite dismal predictions we had early on in the year, which hopefully will not materialise, will have profound implications for people who have borrowed heavily to invest in the expansion and development of their farm enterprise, not to mention the significant investment decisions processors have taken around the country.

Approximately 17,000 dairy farmers are facing a superlevy bill of €88 million. Every 1% of overproduction represents a €15 million bill for the dairy industry. Let us think about that figure for a moment. Some €88 million will be taken out of an industry that is making significant repayments. Various speakers have mentioned the interest that the banks, particularly AIB and Bank of Ireland, are taking in the expansion potential of the dairy sector. Farmers who are locked into repayment commitments in those circumstances will receive a bill for tens of thousands of euro. When will this have to be paid? Are we talking about a payment date of November 2015? The Commissioner for Agriculture and Rural Development has been talking about it being paid over a three-year period. Any farmers reading the front page ofThe Farming Independent last Tuesday must have sat down and asked themselves where the clarity was on this matter and what their position would be at the end of 2015. In 2015 we will have the bill of €88 million coming collectively to individual dairy farmers. We are going to have a significantly increased farm taxation bill.

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