Tom Barry (Cork East, Fine Gael) | Oireachtas source

It is good to recognise the contribution of our dairy sector to our economy. It is a pity to have to do so tonight with no Opposition member in the House. I find that galling because we frequently hear about how the rural economy is failing and how it has problems. Certainly, there are problems but it would be nice to be part of this debate because the expansion of the dairy industry will mark the return to an indigenous industry that will operate for many decades and which will bring back prosperity and employment and keep family farms alive and people in rural areas. It is critical. I grew up on a dairy farm and am proud to have done so. Dairy farming is a fabulous way of life and a dairy farm is a good place to rear children and grow old. In a sense, there is a lost generation of people.

Quotas were introduced in 1983. For young farmers at the time, this spelled disaster. One cannot move ahead while having one's hands tied behind one's back. The quotas are gone now, and I am glad of that. However, we must recognise that as we move ahead.

There is a great urge to expand in the industry. Our own local co-operative, Dairygold, serves as an example. A member of its board is in Leinster House tonight. While there is a great urge to move ahead, with a 57% increase in Cork, there is no prize for being first. I do not want to see considerable sums of money borrowed in very volatile markets. We have volatile prices and inputs, and food prices and weather crises must be borne in mind. Therefore, we must be very careful, although there is a great opportunity.

I spoke earlier about the superlevy fines. Apparently, for every 1% we go over quota, it will cost the country 1%. Therefore, if we go over by 7%, which is a possibility, it will result in a cost of €100 million, which is a lot of money. However, this is the last time this will occur. I am glad there are measures in place that will lessen the effect of the fine. Certainly, this is the last time we will be facing it.

Great progress has been made on infrastructural projects. In my locality, Dairygold is investing heavily in both Mitchelstown and Mallow. The Minister and Taoiseach visited to see the opening of the plant. The Irish Dairy Board is to start work in Mitchelstown very soon. Every block of Kerrygold butter in the world will be manufactured there. Is that not a terrific scenario? The produce will be exported all over the world.

With the help of the Government, we have discovered once more what indigenous industry is all about. Let us face it: this country had lost its way. We were getting rid of all our manufacturing industries, such as our beet industry. It was incredible. However, we have gone back to basics and that is what creates employment. Today in the town of Mallow, there are 350 people building the plant, not to mention those who will be working there for decades.

The abolition of milk quotas will see approximately 10,000 extra jobs, at least, because the amount of work upstream and downstream of the huge industries in rural areas is phenomenal. That will be our legacy. It is very important because this is building Ireland, jobs and business. The diversification that will follow is also significant.

Farmers spend money, and so do the associated co-operatives and processors. When the pollution scheme was in operation a few years ago, €2 billion was spent. There will be an increase in expenditure but there will be volatility. I attended an event yesterday in Cork called Get Financially Fit. The event, which is going around the country, was run by Teagasc, which is to be commended for it. One must plan one's expansion. I am not a great fan of the pulse debt that is evident at present whereby people borrow a lot of money and try to sweat the asset for many years. We should consider putting a plan in place according to which so much is spent annually and facilities are built up over the years without risking too much exposure to debt. In a volatile market with high input prices and low product prices, farmers could face a difficulty. We do not want to land them in unduly stressful circumstances. Cash flow is very important. I encourage people to examine their cash flow really seriously.

Farming needs to improve on its office work. Many small businesses outside farming have dedicated office staff. We need to ensure farmers become very much aware of the importance of an office. I said yesterday that my business was turned around when we put people into an office and took the office out of our house. I do not believe the house is the place for an office. People need to remove offices from their homes. If one is audited at some stage, one will realise the house is certainly not the place to conduct it.

When discussing the dairy industry, it is important to mention the tillage industry. The latter is going through a very difficult time. It contributes over 2 million tonnes of animal feedstuffs to our dairy industry and is highly valuable. Although we have a grass-based system, we need to ensure we continue to supply home-grown, fully traceable feed. A lot of indigenous protein will be produced through our beans. This market is being stimulated and the Minister negotiated extra payments. It is important that the tillage industry be recognised. Prices for tillage commodities today are the same as they were 20 years ago. That is not sustainable so it is important, therefore, that the Minister pay attention to the industry. We cannot afford to lose an industry because of the current fluctuation in prices. Many tillage farmers have spoken to me about this. It is a very serious matter.

If we lose the tillage industry or decrease the volume produced at present, we will become completely reliant on imports. Only one thing happens when one is fully reliant on imports: prices are out of one's control and one becomes a price taker for inputs. That happened to us in the fertiliser industry. When IFI closed in Cobh, we lost a huge State asset. It was another one of our industries that were shut down. The previous Government should hang its head in shame. One would swear it almost set out to shut down our indigenous industries. It was unbelievable. It could not wait to shut them down and let the products be manufactured somewhere else. This caught us and hurt us so badly, and that is why we are having a problem with our input prices. However, we cannot change that immediately.

The primary point on milk is that farmers need to make a living. I said yesterday that when people are examining inputs and producing profitability monitors, the first figure they should include is how much it costs to feed and educate the family and have a standard of living that is reasonable. That is hugely important because producing milk of high quality involves a 24-hour day throughout much of the year. There is an incredible workload. I grew up on such a farm. To do what must be done, there needs to be reasonable compensation and one cannot be worried that one cannot pay one's bills. That is really important. From time to time, with fluctuating prices, we will need to support the industry. I note that the Ministers are very conscious of this. We cannot avoid it.

Earlier today I spoke about the climate change legislation. It will have implications for our industry. We need to ensure it will be worded and implemented in such a way that it will be practical. We need to ensure a climate change Bill does not have the aspirations of the Green Party, which is now long gone. I remind the Green Party that there was a fabulous environment before it and that there will be a fabulous environment after it. To a great extent, it is the farmers who have protected our environment. However, we must be careful that we do not sign up to a measure that will damage our industry and that is impractical.

We need to market what is good about our industry. The dairy industry is bringing prosperity we knew it could deliver. We must also remember that we must promote diversification. It was only last week that I met a young couple who are setting up a cheese manufacturing facility on their farms. Following the taxation review, off-farm income is now going to be allowed to be included in income, averaging over five years. This is important.

I wish to recognise the huge and positive impact the dairy industry is having in our country. We must look at the challenges not as something we cannot overcome but as something we will achieve. We will move on and we will make this country a manufacturing country once more, with employment in rural areas for a long time to come.

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