Wednesday, 21 March 2012
This is not the first time Deputies Moynihan and Kirk have raised this issue, understandably so, because it is an important one.
In the past year my Department and I have been extremely active in raising at every appropriate opportunity the question of an adjustment to the milk quota regime. We have made determined efforts to secure a soft landing for all member states in the lead-up to milk quota abolition in 2015, as envisaged in the 2008 CAP health check agreement. I have discussed the matter extensively with other EU Agriculture Ministers, including in bilateral meetings with my Danish, French, German, Estonian and Finnish counterparts. Furthermore, officials from my Department have raised the issue at EU level meetings and at bilateral meetings with other member states. We will continue to pursue it at every opportunity.
Among the options being discussed in relation to a soft landing are the front-loading of the remaining quota increases, a reduction in the super levy fine that may be imposed, a further reduction in butterfat correction levels, or a type of EU flexi-milk arrangement which would operate provided EU production overall was within quota. Most attention has been focused on the butterfat correction which would be the most straightforward option from a procedural position. In December a coalition of member states involving Ireland, Denmark, the Netherlands, Belgium and Cyprus formally put a specific proposal to the Special Committee for Agriculture for an adjustment to the butterfat correction mechanism.
Unfortunately, the Commission has consistently resisted attempts to reconsider this issue, as it has resisted attempts to revisit the outcome of the 2008 CAP health check generally. That view is supported by a number of member states which, unfortunately, are influential ones. I have spoken about this on numerous occasions. While it is important to recognise that there will be no magic solution to milk quota problems we may have in the remaining weeks of this quota year, farmers must do everything they can in the next ten days or so to remain within quota.
We will continue to pursue this agenda next year, proactively and aggressively at times. There will be a review of the milk health check towards the end of this year. I assure Members that the country will lead the discussions in an effort to try to alter the soft landing policy that is not currently delivering a soft landing for at least six EU member states.
I thank the Minister for his reply. We have discussed this matter in the House on a number of occasions over recent months in anticipation of the superlevy threat that is hanging over the dairy sector in Ireland.
Denmark assumed responsibility for the Presidency of the European Council in January last. Significantly, Denmark, the Netherlands, Austria, Cyprus and Luxembourg exceeded their dairy quotas in 2010-2011, resulting in a superlevy bill of €55.5 million having to be paid. In this current year, Europe will be an estimated 5.5% under quota. It is clear that quite a significant number of dairy farmers will be in serious difficulty if one is to judge from newsletters issued, for instance, by Glanbia, one of the major dairy companies in the country. In Leinster and a good part of Munster, where a significant volume of milk is produced, they are seriously over quota. In many instances, it will be a bridge too far to make the sort of adjustments that seem to be necessary between 7 March and 31 March. Has the Minister a responsibility, having regard to his reply to questions way back in October where the issue of the butterfat adjustment was very much under consideration? Would it be timely to bring forward an initiative in that regard?
The initiative is under way in that regard. I have mentioned the butterfat issue at practically every Council meeting I have been at. We have been taking Ministers aside on an informal basis and also setting up the formal bilateral meetings that I outlined in the answer to the question.
The problem is there is no mechanism to force the EU to accept a butterfat correction. The reason we have chosen to focus on butterfat correction is that the Commission has the capacity to introduce that measure without having to seek a vote in Parliament or in Council. It could have introduced it through regulation, which would have given Ireland breathing space of 1% to 1.5% extra on top of our current increase of 1% in quota. Unfortunately, that has not been possible, mainly because big powers, such as France and Germany, do not want to see this happen.
Countries are saying that there is a formal review of the health check coming up at the end of 2012 and that is the time to discuss these issues. Despite the fact that Ireland and the Netherlands, Denmark, Luxembourg and Cyprus, which have strongly supported us on this, have been pushing hard, the Commission has stated essentially that it is not up to it to change this and if a majority of member states come to the Commission and say they want it changed, the Commission will look at it. Unfortunately, we do not have that majority at present. That is the political reality. There are countries which do not want to see any more flexibility in the quota system because they think that will impact on price. Ireland disagrees with that, but we do not have sufficient numbers in Council to be able to force a change in policy.
It has been brought up directly with the Danish Presidency but it has also been brought up repeatedly directly with the Commissioner by me. The Commission position is straightforward. The Commission states that the Council voted in 2008 on a milk health check which guides policy, and if the Council wants to change that, the Council can do so but that must come from Council, not from the Commission. The Commission has in place a review mechanism at the end of this year for the health check policy and it states that is when we will have an opportunity to do this. Make no mistake, we are trying to progress this issue. We are pushing as hard as we can.
I have been consistent on this and I do not think anyone can accuse me of raising expectations around butterfat correction levels. I have been consistent on this, that this would always be a difficult political ask but that we would continue to try to push the door open on this issue, and we are continuing to do so. However, for this quota year, it will not be a factor. That is the reality.
It will be very brief. During the health check discussions in 2008, the Minister's predecessor in the Department, Deputy Brendan Smith, raised this issue of the butterfat adjustment. At that stage, quite clearly, it entered as a major consideration in any adjustment and in any situation where quota would be exceeded, such as there possibly will be in our case. What is the position having regard to the fact there was an acceptance of the point in 2008?
The position is clear. Unless the Commission can be persuaded to change the regulation on the treatment of butterfat levels, they will remain as they are. This puts Ireland under pressure, which I acknowledge. When I last looked at the figures, we were 0.006% under quota. There has been a very early grass growing season this year - we are about one month ahead of schedule in some parts of the country. This is putting farmers under huge pressure to try to control milk output in order to stay within quota. While I agree with the Deputy in terms of what he wants to do, I have a responsibility to give a realistic assessment of what is possible politically in the next couple of weeks.