Written answers

Tuesday, 31 March 2015

Department of Agriculture, Food and the Marine

Milk Quota

Photo of Michael Healy-RaeMichael Healy-Rae (Kerry South, Independent)
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321. To ask the Minister for Agriculture, Food and the Marine his views on correspondence (details supplied) regarding milk quotas; and if he will make a statement on the matter. [13007/15]

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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The rules governing the imposition of a superlevy are set by regulations agreed at EU level. Under these regulations each Member State is allocated a volume quota of milk, above which a super levy (of 28.6 cents/litre) has to be paid to the EU Commission by producers who contribute to the over production. It is not possible for me on a unilateral basis to adjust these super levy rules.

I have, on numerous occasions, proposed action at EU level to mitigate the impact of the super levy, primarily via utilisation of an adjustment to the butterfat coefficient, as this would not have required an amendment to existing regulations. Other options previously discussed included the front-loading of the remaining quota increases, a reduction in the super levy, or a type of EU flexi-milk arrangement which would have operated providing overall EU production was within quota. However, given the opposition of a blocking minority of Member States, some of which have gone so far as to seek to link the issue to possible measures to regulate supply after quotas are gone, there is no realistic prospect of any movement on the super-levy.

With respect to the impending super levy, there are a number of initiatives which I as Minister have taken to help ensure that the Irish dairy sector enters the post quota era as smoothly as possible. Flexibility has been secured from the European Commission for farmers to pay the superlevy fine on a phased basis over 3 years and my Department is working on the details of a scheme to give effect to this flexibility at national level. This announcement will serve as a major boost to dairy farmers in helping to ease the cashflow burden of paying the superlevy bill.

On-going contact has been maintained with the Minister for Finance to ensure that existing and future taxation policy reflects the Government’s commitment to agriculture. Of interest to dairy farmers here will be the announcement in last October’s budget to provide for income averaging over five years when it comes to paying income tax bills. I have also ensured that priority has been given to measures for the dairy sector in the Rural Development Programme. In addition, in regular meetings with the Irish banks I have impressed upon them the need to show flexibility in their dealings with farmers experiencing temporary cash flow difficulties in 2015.

Furthermore Teagasc, in late January and early February, held a series of very well attended dairy seminars throughout the country to help dairy farmers to manage their dairy enterprises through 2015, while also planning the efficient development of their dairy business in a non-quota environment. This complemented the Cash Plan Programme, supported by my Department in 2014, which was aimed at encouraging recent entrants to dairying to engage in a programme to improve farm planning, cash flow management and to minimise the cost of producing a litre of milk by managing the factors that influence this cost.

The abolition of milk quota presents a massive opportunity for the Irish dairy sector and one which we should look forward to with confidence. However, it is important that dairy farmers plan prudently for this new era. I believe we have the right balance of measures in place to ensure that Irish dairy farmers can enter the new era with full confidence.

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