Simon Coveney (Cork South Central, Fine Gael)
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This question relates to the milk quota and I will give a short answer so people have the opportunity to ask questions. Currently, Ireland is at risk of being fined at the end of the milk quota year next March for being over the quota, meaning superlevy fines of 28 cent per litre will be applied to people producing over their quota. I do not want to see that so I encourage farmers to try to operate within quota or reduce surplus milk if already over the quota. In the meantime we will be working hard to try to get some kind of flexibility on the so-called soft landing issue. As of today, we have not made the kind of progress which allows me send a signal to farmers that we are off the hook. We are not.

Anthony Lawlor (Kildare North, Fine Gael)
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I thank the Minister for his response. There is a significant possibility that we will be over the quota this year and going towards 2015, and farmers are gearing themselves up to the removal of quotas in 2015. Could we get an all-European quota system, taking in the whole of Europe instead of an individual country? Will the Minister work with the Commission towards allowing Ireland in particular, as it is working to the targets of Food Harvest 2020, to build in a gradual and annual increase in quotas?

Séamus Kirk (Louth, Fianna Fail)
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I will not hold up the Minister in trying to answer. In his earlier response to my colleague, Deputy Michael Moynihan, there was a suggestion that the butter fat adjustment may provide a possibility for a partial solution to the serious issue we have looming in Ireland on 31 March 2012. Perhaps the Minister will elaborate on the mathematical calculations that will be involved with that.

My second point is a follow-up to the question asked by Deputy Lawlor and relates to the possibility of finding a solution within the Community or, perhaps, by localising it in the context of a bilateral arrangement with Britain. At present, significant volumes of milk quota have been bought from the UK by farmers in Northern Ireland. My information is that the total quota in the North will not be filled in the current year, although one does not know what might happen next year. The possibility of it being utilised to alleviate the problems of farmers here should be examined. It is on one island, so it is not a question of breaking into mainland Europe to find a solution.

In sections of the agricultural press the possibility of leasing dairy cows to partner farmers in Northern Ireland has been suggested, so the milk can be produced in Northern Ireland. It is a variation on what we are discussing but there appears to be an inherent health risk in the concept of moving dairy cows from farms in Cork, Louth, Offaly, Kildare and elsewhere in the South to farms in Northern Ireland. If we could reach a bilateral arrangement, however, it would help to alleviate the pressure.

Simon Coveney (Cork South Central, Fine Gael)
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I can understand that people are trying to find imaginative solutions to this problem. We have examined whether it is possible to transfer surplus quota from Northern Ireland to the South. Unfortunately, although I would rather it was otherwise, Northern Ireland is considered a different country and jurisdiction from the Republic of Ireland and, whether we like it or not, it is not possible to do bilateral deals under the European policy on milk.

We are constantly looking for new or clever opportunities to solve the super levy problem. From the Europe point of view, for example, we are examining the possibility of front-loading the remaining quota increases into one year, which is not a runner at present; a reduction in the super levy fines, which is also not a runner; and a further reduction in the butterfat correction levels, which is the one we are pursuing most proactively at present. We believe it is the only one on which we have a chance of potentially getting agreement this year.

We are also examining a far more flexible approach which would see the overall quota as a European quota rather than a quota for individual countries. Last year, even though countries such as Denmark and the Netherlands had significant super levy fines imposed on them, Europe as a whole was approximately 5% under quota. This is the same problem as we have with Britain. Britain is consistently under quota while we are consistently on the edge. We were less than 0.5% under quota last year, and that was after a severe pull back for the last two or three months of the year.

If the Deputies have suggestions, they should keep forwarding them to me and we will consider each of them. I had heard that there was some discussion about trying to come to an arrangement with Northern Ireland to find an all-island solution and putting that case to the Commission. We responded to that and put feelers out to the Commission to see if it would consider it, but we did not make much progress. It would set a very awkward precedent for the Commission in terms of other European countries trying to do similar things. We need to find a solution to Ireland's current difficulty that we can sell across the European Union. Unfortunately, that has not yet happened to the extent that it solves our problem.