Michael Moynihan (Cork North West, Fianna Fail)
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Question 1: To ask the Minister for Agriculture; Food and the Marine the progress he has made on the issue of a European wide milk quota to alleviate the pressure of a super levy on dairy farmers here; the steps he has taken in securing a butterfat correction quota increase of 1.5% and 2%; and if he will make a statement on the matter. [32328/11]

Simon Coveney (Cork South Central, Fine Gael)
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To be fair to Deputy Moynihan, he has raised this issue with me repeatedly in the House and outside it. He has similar priorities to me. We both have a concern that the Irish dairy industry may be subject to super levy fines next year if we are not careful.

Last year we narrowly avoided the imposition of fines. Many people made a lot of money last year by being over quota and we were lucky to avoid super levy fines. By mid summer this year I was concerned about the fact Ireland was more than 5% over quota for the time of year. We have been sending out consistent messages since then that it will be very difficult to get any political flexibility from other European countries to allow Ireland to produce over quota. That has proven to be the case.

As I stated in this House repeatedly, we have had bilateral meetings with Denmark, the Netherlands and, more recently, France, when there was a meeting with the Minister in Paris. Most recently, at the last Council meeting I had a bilateral meeting with my German colleague who happens to come from Bavaria and outlined in no uncertain terms why this was an important priority issue for me.

The last thing we want to do is fine progressive dairy farmers who are planning for expansion, growth and investment post-2015. My German colleague took my concerns on board but did not give any indication that Germany was in a position to support what is currently the only item on the table, namely the butterfat correction which would allow Ireland to produce between 1.7% and 2% more milk this year and still be under quota.

We are still being frustrated in our attempts to get common agreement amongst Council members and Ministers. We will continue to pursue the issue. In the meantime I need to send a very strong signal to farmers that they need to operate within quotas.

Michael Moynihan (Cork North West, Fianna Fail)
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I thank the Minister for his reply. It is a major issue at farm gates. I hear stories every day of the week about people who have ceased milk production and dried off stock they have invested huge amounts of money in over the years. As the Minister said, such people are often progressive dairy farmers who are trying to make sure they are on the curve when quotas are abolished and the new system is introduced post-2015. They are currently at a huge disadvantage.

During the last Priority Questions a month or six weeks ago the possibility that butterfat could be adjusted was discussed. The issue seems to have receded. Some of the main players in Europe are reluctant to re-enter negotiations. However, some countries are hugely under quota. Ireland is hugely over quota. There are arrangements in place between dairy farmers. We have to apply huge pressure to correct the butterfat situation.

Post 1 January 2012 there will be a new presidency of the European Union. Perhaps the issue could be introduced to the agenda as a priority issue at the meeting of the Council of Ministers on agriculture or various other levels. The Minister stated he held discussions with various Ministers. He held discussions with the German Minister since the last Priority Questions, who will not negotiate. Are other like-minded countries in the same position as Ireland or will they be on 31 March?

Everybody has to advise people to stay within quota. Decisions that affect people staying within quota were taken at dairy farm level two or three years ago. I ask the Minister to outline to the House the possibilities when the new presidency takes over on 1 January. What partners do we have in Europe to push the agenda forward?

Simon Coveney (Cork South Central, Fine Gael)
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Even if a deal was done on butterfat correction it would only give us 2% flexibility. We are still above that rate, even though farmers have cut back significantly. It does not solve our problem but eases it somewhat. Any solution should not reward people for being massively over quota. People who have been careful and planned responsibly for expansion to operate within the quota system should not be at a disadvantage. The idea that we would fine people for planning for expansion but who produce slightly over quota is something we need to try to avoid and we are trying to do that.

The conversation I had with the Deputy on seeking a butterfat correction is still on the table and on the agenda for a number of countries, in particular Denmark and the Netherlands. Other countries were fined last year and supported us strongly. A number of new member states, in particular Estonia, Lithuania and Latvia, see opportunities pre-2015 in terms of increasing dairy output.

A minority of countries in the Council would support us on this issue. Even France is willing to consider it in an effort to try to be helpful. The German Minister has not ruled it out but has outlined why it would be difficult for her to do it and sell it to German farmers and unions. We are endeavouring to try to make progress. The message to farmers must be clear. We need to reduce output to try to remain within quota if we are to avoid fines.