John Paul Phelan (Fine Gael)

The backbone of rural Ireland is the family farm. It affects every other aspect of rural community life whether it is the local shop, school or pub. Every social facility in a local rural community stems from the fact that people are employed on the land and can earn a living from it. As prices stand, dairy farmers cannot earn a living. The average price paid for milk is half what it was several years ago, making it below the cost of production. The Department of Agriculture, Fisheries and Food has calculated the cost of production for the largest operations is approximately 17 cent per litre. For the average small and medium-sized dairy farm, it is much higher at just over 25 cent per litre.

Studies by the European Union have predicted milk production will migrate in the Union. Many milk producers in the southern part of the Union will go out of production while it will increase in the northern part. I am concerned the Irish dairy industry will suffer the same fate as the Irish sugar industry.

Although sugar production and dairying probably were perceived to be the two most successful farming sectors, the former was allowed to be sacrificed on the altar of world trade. Moreover, even though we sold our producers down the Swanee, there now is a scarcity of sugar on the world market. Unless the Government takes direct action immediately, the same will happen to dairy farmers. Many hundreds of them have given up already and I could provide a list of small producers from my home locality of southern County Kilkenny who have gone out of business within the past 12 months, as well as many more who are considering so doing.

It is time for the Government to take direct action and that is what this Fine Gael motion seeks. There is a short-term glut on the global market at present which, combined with the credit problems faced by many dairy producers who built new operations to conform to EU directives, who are being squeezed by the banks in respect of their borrowings and who are selling produce below the cost of production, has created the perfect storm for such individuals. Many of those concerned will go out of business unless the Government takes some definitive action immediately. This is the reason I am especially disappointed. The Government's amendment was unnecessary because the Fine Gael motion is all-inclusive. It does not even criticise the Government greatly although I would have preferred to have criticised the Government to a far greater extent than does this motion. I do not understand the reason the Government parties failed to agree to a cross-party motion that could have been agreed on without a vote.

As previous speakers have observed, the Government's decisions in recent budgets have had a particularly detrimental effect on agriculture and farming. The installation aid grant was mentioned, as was the abolition or suspension of the early retirement scheme as well as the other cuts that affect everyone, including farmers, such as the income levy and similar recent cutbacks. I call on the Government to take urgent action but can discern no sense of urgency either in what has been discussed in the debate or in the actions of the Minister for Agriculture, Fisheries and Food thus far to ensure as many people as possible can remain viably employed in dairy farming throughout Ireland in future. I agree with Senator Ellis's point on the cost of inputs, which is the reason the Fine Gael motion included a specific point calling on the Government to try to do something to reduce such costs. I note the Government parties did not mention it in their own amendment, which is rather disappointing. I urge the Minister of State and the Members on the Government side to support the Fine Gael motion.