Jackie Cahill (Tipperary, Fianna Fail) | Oireachtas source

I congratulate the Minister on his appointment. We worked together when he was the Fine Gael shadow spokesperson on agriculture and I look forward to working with him in this Dáil term. The Minister has taken over responsibility for the agriculture sector when it is facing its worst crisis since the Economic War. Every sector of agriculture is under extreme economic pressure. The producers in the pigmeat and beef divisions are looking with trepidation at the possibility of a British exit from the European Union and the world trade deals that are being negotiated.

I want to concentrate on the immediate problems facing the dairy sector. Last weekend, farmers received their milk statements for April. Unfortunately, very few of them received a milk cheque. To take our two largest processors, Dairygold and Glanbia Industries Ireland, GII, they returned to farmers a net price of 20.9 cent per litre of milk, with 3.6% butterfat standard and 3.3% protein standard. I do not need to explain to the Minister that this price is significantly below the cost of production and is unsustainable in the future.

Looking at the market predictions from Ornua, there is no sign of improvement on the horizon. We are basing our premise on the survival of the fittest and that our dairy producers can withstand this storm. That theory will be put to the test this summer. With the level of grain prices currently, the production trends on mainland Europe will put that theory to the test. I have serious concerns that our producers will stand up as the lowest cost producers. It is a premise on which we have based many of our growth predictions, and I am concerned that will not come to pass.

The only practical way to increase milk prices in the short term is to increase the intervention price. There are many pros and cons in doing that. Some commentators say we will prolong the agony by having an increased intervention price, but is it better to try to prolong the agony and let the patient survive or terminate the agony and see many producers going into bankruptcy?

I suggest that at the next Council of Ministers meeting a dairy cow premium should be considered for the first 50 cows, and that it should be triggered when milk prices drop below 28 cent per litre. That is a practical suggestion to provide some much needed cashflow for European dairy farmers.

Co-operatives, private merchants, silage contractors and artificial insemination, AI, companies will have to carry debt from their customers into 2017.

5 o’clock

We must examine a mechanism whereby they can get interest-free loans from the Government to enable them to deal with the large merchant debt that will be carried over due to the 2016 milk price. With bank repayments and farmers' other commitments, we must ensure farmers can be allowed a holiday from repayments without financial penalty. Many of our 17,500 producers have invested very heavily in the past two to three years in anticipation of the abolition of quotas and we must ensure they can come through this price storm.

At my clinics in Tipperary last weekend, I met three farmers who are being put under pressure to sell parcels of land in order to reduce their financial commitments to banks. I have written to the Minister for Finance already and there is a mechanism in place whereby if a person is consolidating a farm holding, he or she may sell and purchase land free of capital gains tax. I suggest that the Minister might push at Cabinet the notion that farmers forced to sell parcels of land in an attempt to restructure bank debts would be allowed the same exemption from capital gains tax. It would only affect a minority of farmers but it would be of great help to them if they could go with a full sale price of land to the banks in order to restructure debts.

Our industry still has much potential. Our 17,500 milk producers can contribute greatly to the rural economy but we must put a structure in place to ensure that those farmers survive this current and major income crisis. If we are to meet the targets we have put forward in Food Harvest 2020 and Food Wise 2025, we must have practical suggestions such as those I have put to the Minister in order to ensure that we come out of this calamity. We must allow rural Ireland and its economy benefit from the milk expansion as we had hoped.

See this speech in context