Dáil debates

Tuesday, 17 February 2015

Ceisteanna - Questions - Priority Questions

Agriculture Schemes

2:00 pm

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

129. To ask the Minister for Agriculture, Food and the Marine the estimated cost of the super-levy fine on Ireland for 2015; the steps taken by him to have this reduced; the success to date of his efforts; and if he will make a statement on the matter. [6829/15]

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

The Minister, Deputy Coveney, is welcome back to this side of the Atlantic. I take this opportunity to congratulate our colleague, Deputy Martin Ferris, on the victory that Ardfert had on the weekend.

We are told that the farmers of Ireland, on top of a land parcel identification system, LPIS, fine of €180 million, are now facing a superlevy fine of €100 million. What I need to know today is what has the Minister succeeded in doing to reduce or eliminate this totally unnecessary fine?

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I too pass on my congratulations to Deputy Martin Ferris.

It is not true to say we are going to have to pay an LPIS fine of €180 million. That is what the Commission has proposed but we are very much opposing it. It has gone to conciliation and is still in process. It is important to put that on the record.

The rules governing the imposition of a superlevy fine are set by regulations agreed at EU level. Under these regulations each member state is allocated a volume quota of milk, above which a superlevy fine, which is just over €0.20 per litre, has to be paid to the EU Commission by producers who contribute to the over-production. As the Deputy will know, we had a very strong growing season last year. We had strong prices for most of last year and an awful lot of farmers are planning for the abolition of quotas in the next couple of months. As a result of that, we have seen the production levels on Irish dairy farms higher than we would have liked. In autumn, we were looking at a very large superLevy fine. By the end of January the quota position looked at being 5.47% over quota, which would essentially mean a superlevy fine of about €88 million. It is a significant issue. I have been pushing for ways in which we can reduce the superlevy fine in the final year of milk quota as a way of soft landing, which was supposed to be the idea.

A majority of EU member states, in many ways under the leadership of Ireland in terms of the position we had taken with three or four other countries, looked for what was called a butterfat adjustment which, effectively, would have given us an extra 2% in our quota. We also looked at reducing the super levy fine per litre in the last year to ease us out of quota management, but that has not been possible. What has been possible is talking to the Commission to ensure any super levy fine incurred would be paid over a number of years. We are continuing to negotiate with the Commission on that issue. It has indicated that it is happy for farmers to be allowed to pay super levy fines they may have incurred to co-operatives over a number of years. We are still negotiating with it on whether co-operatives and Ireland should be able to pay it over a prolonged period of time also, which would certainly ease the blow.

2:05 pm

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

The first question I asked was what was the current estimated cost of the super levy fine and the steps being taken to have it reduced. As I did not get an answer to the first part of the question, the Minister might give me an answer on the current estimated-----

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I answered the Deputy - it is €88 million.

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

The Minister said that was at Christmas.

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I did not; I said it was at the end of January.

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

We are well into February. Is that still the position?

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I will come back to the Deputy on that point.

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

That is fine. We are facing an €88 million fine and the best the Minister is offering us is that the liability will be attached immediately and one will have time to pay it. When representatives of ICOS and the Irish Dairy Board appeared before the committee, they were very adamant that the country should fight to have the super levy fine reduced. Is the Minister saying he failed in regard to the butterfat adjustment? Is he saying he failed to get a reduction in the rate at which the super levy was charged? Will he confirm that is the position and that he has literally made no progress in the negotiations, except possibly on the issue of deferment?

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am a little surprised that the Deputy has not informed himself on the issue. He is the main Opposition spokesperson on agriculture and I would have thought he would have been on top of the numbers. Last May the anticipated super levy fine, based on trends at that stage, was 9%. In August the figure was approximately 7% but it then dropped to 6% and is now 5.5%. By the time we get to the end of the quota system in a number of weeks time, it will probably be well below 5.5%. However, it will still be a significant super levy fine. One is talking about a significant amount of money.

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

That is not the question I asked.

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

We have had debates on this issue on many occasions and the Deputy knows only too well what is possible and what is not. It would require agreement across 28 EU member states to secure a change in the approach to a soft landing. Ireland led an effort to introduce a butterfat adjustment which was supported in increasing numbers by many other countries, but it was not possible to get over the line because a number of very large countries blocked it. What we are doing instead is looking at making what is a significant fine affordable over a prolonged period of time and we are trying to get across the line with the Commission. All of the farming organisations, as well as ICOS, know exactly what is going on and we are all working together to try to solve this problem, as opposed to trying to play politics on it.

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

I am not playing politics; the Minister is the master at playing politics. He promises a lot but delivers very little. The question was the estimated cost of the super levy fine in 2015. The Minister said it was €88 million at the end of January. We know that farmers are using milk to feed calves and so on to reduce the super levy.

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

They always did that.

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

In working with the farm organisations and farmers by how much does the Minister think he can reduce the super levy fine by the time we get to the end game? That is what I wanted him to tell me.

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

That is a fair question.

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

My next question is whether it will be possible for farmers to deliver milk to milk companies and to retain ownership of the milk until after the due date.

In that way, they will not have provided the milk to the companies within the due time and paid for the storage of the milk. This is on a one-off basis and it comes to an end. Therefore, if one can put the milk sale into next year, my understanding is that it does not count for the superlevy. What has been done domestically, now that the Government has failed in Europe, to work with farming organisations and look at all possibilities so that the sales of milk decrease between now and the first of April? This could be done by retention of ownership of the milk, even if it is in somebody else's storage. Has the Minister looked at that possibility?

2:15 pm

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

We have not failed in Europe. If we can get agreement from the Commission on a schedule of payments over a number of years, that will make an enormous difference to cashflow demands on farmers and on co-ops. We already have an agreement in principle from the Commission that the relationship between farmers and their co-ops could be such that it would allow for a schedule of payments that would significantly ease the burden for farmers. We are currently talking to the Commission, along with other countries, about trying to do the same in terms of Ireland's obligation to the Commission over a period of time. That would be massive progress. If we had, for example, got the butterfat adjustment, which would have been very welcome, we would still have a superlevy problem, because at the moment we are 5.5% over. Butterfat would have been an adjustment of about 1.8%. We would still have had a significant problem.

It is fair for the Deputy to ask about what we are doing between now and the closing date to help farmers reduce their superlevy burden. We are doing that through Teagasc, working with farming organisations and working with farmers. The Deputy asked whether it was possible for farmer to produce milk, have it collected by their co-op and then retain ownership of it through the deadline period, until we move to an absence of quota, and then effectively count it as milk produced outside of quota. I do not think that is possible, but we are looking at all those options. Several people have asked me to explore different possibilities in that regard, and we are exploring those possibilities at the moment, but I would not like to raise people's hopes too much on that. I do not think there is any easy way-----

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

We are way over time.