Catherine Murphy (Kildare North, Social Democrats)
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5. To ask the Minister for Agriculture, Food and the Marine the amounts recouped to date from milk producers in order to reimburse his department for the levy amount of €77 million paid by his Department to the European Union in November 2015 in payment for exceeding milk quotas; and if he will make a statement on the matter. [12571/17]

Catherine Murphy (Kildare North, Social Democrats)
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This question relates to payments made to the European Union for non-compliance in respect of exceeding the national milk quota. I understand approximately half the amount has been recouped and there is a time element involved in recouping it this year.

Michael Creed (Cork North West, Fine Gael)
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When EU milk quota was abolished in April 2015, some 6,400 Irish dairy farmers had accrued a superlevy liability of €71 million for exceeding their milk quota. To assist with the large superlevy bill across the EU, the European Commission introduced an optional scheme for member states whereby a milk quota levy incurred by producers in the final quota year could be paid in equal instalments over three years from 2015 to 2017, inclusive, without interest. This repayment would take the form of a 33% lump sum in 2015 and the balance to be spread over equal instalments in 2016 and 2017. Ireland was one of seven member states which opted to introduce this scheme. Ireland chose to implement the scheme so as to assist farmers through a period of market volatility.

The Department paid the full superlevy bill of €71 million to the European Union in November 2015, made up of €35.4 million collected from farmers that year and €35.6 million from the Department of Agriculture, Food and the Marine funds. This latter figure was required to be paid back by farmers under the instalment scheme as a condition of the governing regulations. Approximately 2,700 producers opted to pay their full levy in 2015, while the remaining 3,700 opted to join the instalment scheme. Repayments are therefore as follows: €17.8 million was paid in five equal instalments from May to September 2016 and €17.8 million is to be paid in five equal instalments from May to September 2017.

The first instalments were due in May 2016 and were repaid in each month up to September. These months were chosen to coincide with peak production periods for farmers. End-of-year results indicate over 99.7% of the expected payment was received. The outstanding debt for 2016 is now down to three participants owing €12,700. My Department is in ongoing contact with these farmers to arrange their repayment as required under the relevant regulations. To date, €53.2 million of the €71 million in respect of this scheme has been returned to the Exchequer, with the 2017 instalment balance making up the remaining liability. It is expected that by the end of this year, the entire superlevy will have been repaid in full by farmers.

Catherine Murphy (Kildare North, Social Democrats)
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Is there an issue in the repayment by instalments being factored into the Department budget for this year? Is the money required for other schemes? Is it an issue or is the Minister satisfied that this is progressing in the way he expected? I presume from the Minister's reply that the sharp fall in the global price of milk had a bearing on how this was handled and that is why people were given the option of an instalment plan. Was it predicted in advance of the levy being dispensed with?

Michael Creed (Cork North West, Fine Gael)
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The rationale for the scheme was twofold. There was a very significant superlevy bill not just in Ireland but across the European Union and a number of member states decided to avail of the latitude offered by the Commission in paying the superlevy over a period rather than up-front. It was also a reflection that at the time, milk prices began to go south, which put additional repayment capacity difficulties on farmers. The staggered approach was welcomed by farmers. I accept that welcome as it was, in a very difficult year in 2016, it put farmers to the pin of their collar. It is interesting to note that 99.7% of the liabilities due have been paid in the year and the total bad debts are from three farmers, totalling €12,700. In light of the overall cost, it is not a bad level of compliance in what was a particularly difficult 2016. Global dairy markets have recovered somewhat and that graph is going in a different direction, fortunately, as prices are on the up. That will give farmers some leeway and breathing space in terms of commitments. The Department is budgeting on the liability being met in full.