Dan Boyle (Green Party)

All Members in the Chamber agree that producers receiving prices that are below the cost of production is unacceptable. Measures must be found to counteract that and ameliorate the situation. The motion places too much emphasis and onus on the Government through the mechanism of the Common Agricultural Policy in particular. The Minister has highlighted the measures taken to improve the situation and those he intends to take. We must examine all the structural factors to achieve the long-term sustainability of the dairy sector and milk production in this country. This must examine the medium-term and long–term situation. We have had considerable changes and reform in the Common Agricultural Policy already and those changes will become more marked in the future. The structural changes required refer to the lack of competition that has moved into both ends of the market in terms of the processing and retail of dairy products.

Growing up in Cork city, there was a strong duopoly in competition, with Cork Milk Producers and Ballinahina Dairies. Cork Milk Producers was subsumed by Mitchelstown and its dairy was closed. Ballinahina Dairies was taken over by the Kerry Group and its dairy has been reduced to depot status. In the meantime, door-to-door deliveries have become a thing of the past. Smaller dairies are unable to deliver to small corner shops and most people's access to milk supplies is through the multiple stores which are operating a cartel.

Other speakers, including Senator Quinn, referred to sustainability. The supermarket multiple nearest to my house in Cork city is a German chain and the milk on sale there comes from Monaghan. Senator O'Brien might be happy about this but it is not sustainable that the local milk production is not supported to such a degree. The consumers lose out because of the additional environmental, social and economic costs that accrue. Other supermarket chains source milk in Northern Ireland, taking account of the sterling differential, which is another uncompetitive aspect adding to the difficulties of milk producers.

We must get back to multiple points of sale for milk products and having those points as locally sourced as possible. In an open, competitive environment, that is easier to do than it sounds and the more we can do this the better. We must diversify for long-term sustainability in dairy production. The milk element will always be the largest element of it but we can produce other dairy products such as cheeses and yogurts and we can use whey in biodiesel, as happens at Carbery Milk Products, Ballineen, as Senator McCarthy knows. The more we use the milk that is produced to get the maximum value out of the quota, with the maximum panoply of goods and services, the better it will be for local milk producers. We need a policy that will put that in place.

The farmers' market is an obvious point at which to do this and the work done by my colleague, the Minister of State at the Department of Agriculture, Fisheries and Food, Deputy Trevor Sargent, has increased their existence and popularity. This will help to some extent with the by-products. It will have little effect on milk sales because that requires pasteurisation and other processing models. We must encourage more points of sale and more direct access by the consumer to the product where it is closest to the producer. The distance in terms of competitive aspects and the processing of dairy products and its sale has the biggest impact. We can concentrate on what the Government is doing and not doing and on the Common Agricultural Policy but if we are not dealing with the commercial realities of what is being produced and how it is sold, we are ignoring the bigger picture. This does not help the lot of the producers.

There are other structural problems. A friend of mine is a milk producer in Fermoy. He tried to get the maximum value from his milk quota by producing farmyard cheeses. There are obvious difficulties in how we deal with health regulations and the production of cheese compared with how this is dealt with in other European countries. We place additional constraints. Agricultural facilities, such as farmyards, are exempt from rates. If someone starts a farmyard enterprise based on dairy products to create value added through the production and sale of cheese, this is subject to rates from the local council. In terms of starting a business and getting it off the ground-----