Éamon Ó Cuív (Galway West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

8. To ask the Minister for Agriculture, Food and the Marine if any analysis or research has been carried out on the effect the ending of milk quotas will have on other sectors of agriculture such as suckler cow production; if the short and long term consequences of this decision on the market for dairy products has been researched; the results of the research in question on both issues; and if he will make a statement on the matter. [48238/13]

Éamon Ó Cuív (Galway West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

There are two parts to my question. There has been a very significant drop in the number of suckler cows since 2009, at about 17%. Has any research been carried out on the effect of the removal of milk quotas on the suckler cow herd if people move from beef into dairying? The second part of the question relates to the effect on dairying of this transition period. What research has been done to work out the effect on dairying following the removal of quotas in 2015?

Tom Hayes (Tipperary South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The ending of the milk quota regime in April 2015 represents an exceptional opportunity for the Irish dairy sector to avail of the expanding markets that are developing around the world for dairy products. Ireland strongly supported the decision in 2008 to abolish milk quotas on the basis that quotas were widely regarded by both the Irish dairy sector and market analysts as a brake on the potential of the sector to respond positively to market opportunities. However, as I have stated on many occasions previously, I do not want any post-quota expansion to occur at the expense of our valuable and long-standing beef suckler herd.

The ending of the quota regime, which has existed for 34 years, is such a significant policy change that it will obviously have an impact on other agricultural enterprises and on markets in the dairy sector. Analysts have been examining the effects of this policy change from many different angles, both from an EU perspective and an Irish perspective. The analytical reports of most significance to the Deputy's question are in an EU study titled Prospects for Agricultural Markets and Income in the EU 2012-2022, and in reports based on Teagasc’s FAPRI-Ireland model.

Since the abolition of the EU milk quota system was agreed in the 2008 CAP "Health Check", the increases in milk quota and the ultimate abolition of the milk quota in 2015 have been a part of the baseline set of assumptions of FAPRI-Ireland analyses carried out by Teagasc. In all such analyses, the cross-sectoral impacts of policy changes are examined. Some recent reference papers based on the FAPRI-Ireland model are available from Teagasc.

Additional information not given on the floor of the House

Teagasc's FAPRI-Ireland modelling anticipates that, while an increase in the number of dairy cows could create some extra competition for grassland, most of the surplus dairy calves produced will go into the beef production chain. While it could be argued that the extra competition for grassland could have some negative impact on suckler cow numbers, much of the anticipated growth in milk production is likely to come from higher milk yields, which would have no consequences for competition for land.

I am confident, nevertheless, that in overall terms both the beef sector and the suckler cow sector will not be hugely disadvantaged by the additional focus which Ireland is placing on milk production after the abolition of milk quotas, but will in fact enhance the sectors. To demonstrate this confidence and also to assist the beef sector, I have ensured that some €40 million will be available in 2014 for the sector, which is made up of €23 million for a new beef genomic scheme, €10 million for the beef data programme, €5 million for the BTAP, and €2 million to meet outstanding payments under the suckler welfare scheme.

In relation to the effect on markets for dairy products, the Deputy will be aware of the recently published EU Commission report on how markets are evolving as the ending of milk quotas approaches. It found that medium and long-term prospects for the dairy sector are favourable due to the continuing expansion of world demand. Global population and economic growth and an increasing preference for dairy products are expected to be the main drivers, fuelling EU exports and sustaining commodity prices.

Ireland is well placed to respond to this increased worldwide demand for dairy products and this is reflected in the fact that the value of Irish exports to emerging dairy consuming regions in the Middle East and North Africa, the rest of Africa and Asia jumped by almost 90% or €330 million to reach €710 million in the period 2006 to 2012. I am working with industry to raise the profile of the Irish dairy sector, and the Irish agrifood sector generally, in international markets. On this note I recently returned from a very successful trade mission to the Gulf states where there was a number of launches by Irish dairy companies marking an expanded presence in the region. The visit also saw the opening of an office by Bord Bia in Dubai to assist Irish companies in the region. I also visited the United States last week for discussions around initiatives in the dairy sector in addition to significant trade missions which I led to China and the US in the last year.

In summary, I am confident that the significant investment underway in both the dairy and beef sectors do not place these sectors in competition with each other but rather are complementary and will contribute to a flourishing agrifood sector as envisaged in the "Food Harvest 2020" strategy.

Éamon Ó Cuív (Galway West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

That was an absolute model of how not to answer the question. Can the Minister of State simply tell me what are the conclusions from all of these studies on the likely effect on the suckler herd and the beef industry in Ireland? Has the Government and the Minister made a case to Europe, in view of the fact that we are already over the quota this year on milk production, that there should be a dramatic reduction in the superlevy fine for 2013, 2014 and 2015?

It is ridiculous that there is a 28 cent fine on over-production of milk that will last from the present regime right up until 1 April 2015, all fool's day. Then, suddenly there will be nothing. Would it not be far better if the superlevy was dramatically reduced for this production year and even further reduced in the following production year? Then, obviously, it would be zero the year following that. There are two parts to my question. The Minister of State might be able to answer them.

Tom Hayes (Tipperary South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Which answer will Deputy Ó Cuív listen to, because he did not listen to what I said first time around? I will give Deputy Ó Cuív my analysis of what is going to happen from the heart. Deputy Ó Cuív did not listen to what I said earlier.

Éamon Ó Cuív (Galway West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I did.

Tom Hayes (Tipperary South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

He did not even understand what I said because if he did he would have listened to it.

We are on the threshold of something big in respect of milk expansion and the dairy sector. Throughout the country, from Cork to Cavan, dairy farmers are keen to get into milk production. Deputy Ó Cuív is right to say this is at the cost of beef but in the budget we secured money for a suckler cow premium and I believe that has secured a great deal.

When some of Deputy Ó Cuív's people were trying to suggest yesterday that cattle prices were falling at marts I was able to quote from some of the daily newspapers how in Sixmilebridge, although those involved were affected by the collapse of an exporting company, cattle prices are actually rising. Furthermore, there is a responsibility on the meat factories to keep prices at a high level to ensure basic profitability. I further note, because Deputy Ó Cuív is listening for a change, that there will not be a dramatic fall in numbers because now with the suckler scheme in place farmers are far more content than they have been in the past.

Michael Kitt (Galway East, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Several Deputies want to speak. If we are to make progress and time is up we only have time for one supplementary question and one answer. Deputies are waiting to ask questions.

Éamon Ó Cuív (Galway West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The Minister of State said I was not listening, but I was listening carefully to what he said. Basically, he quoted various reports but gave no facts. The Minister of State also said there was a great future in this area but he has not explained what the analysis suggests about the likely drop in the suckler herd.

Of course there is a great future for dairying, subject to certain concerns I have, when we get rid of milk quotas. I welcome the end of milk quotas but it needs to be planned. What is the Government going to do at European level about the superlevy in 2013-14 and 2014-15? Will the Government get it reduced or not?

Tom Hayes (Tipperary South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

How does Deputy Ó Cuív know there will be a superlevy?

Éamon Ó Cuív (Galway West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Will the Government ensure that no farmer is left hanging for payments because of the collapse of the meat exporting company?

Tom Hayes (Tipperary South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I answered that yesterday and I can forward the detail to Deputy Ó Cuív. I am confident of the prospects because of the good work being done in the background, particularly with the Irish Co-operative Organisation Society. A representative from the ICOS stated on "Morning Ireland" that no one should or would be left without payment and that this was the society's hope and intention. A receivership process is in place and when it is finalised I hope the primary producers, in particular, the marts and everyone who is owed money will be paid. I am not in a position to say how much money is available but certainly the receivership process has to be gone through.