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Other Questions - Milk Quota

Thursday, 9 February 2012

Dáil Éireann Debate
Vol. 755 No. 1

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 10.  Deputy Billy Kelleher Information on Billy Kelleher Zoom on Billy Kelleher  asked the Minister for Agriculture, Food and the Marine Information on Simon Coveney Zoom on Simon Coveney  the discussions he has held under the Danish EU Council Presidency in relation to milk quotas; and if he will make a statement on the matter. [7245/12]

Deputy Simon Coveney: Information on Simon Coveney Zoom on Simon Coveney I suspect this question has come from Deputy Moynihan because he rightly asks it, or some version of it, during every Question Time on agriculture. It concerns the milk soft landing.

I have had informal meetings with the new Danish Presidency. There is a new Danish Minister following elections some months before Denmark took the Presidency. Ireland and Denmark are very much at one on this issue but the discussions on milk, as they are developing in the Council, are a little worrying. Some countries are now suggesting we should not do away with milk quotas in 2015, that the period should be extended and so on at the same time as other countries like Ireland and Denmark are saying we are not putting in place a soft landing that is working and that we should give more flexibility in regard to quota management pre-2015.

This is an opportunity for me to say to dairy farmers that they should stay within quota this year. By the end of December of last year we were 0.08% under our quota and if the same pattern of the first three months of last year were repeated in the first three months of this year we will be significantly over quota by the end of the quota year, which will mean that Ireland will get a super levy fine. We must avoid that. Farmers behaved responsibly in the autumn in terms of early drying off, one milking per day, culling cows in herds and so on. We must continue to be sensible in the way we manage our milk output between now and the end [95]of the quota year to ensure we avoid super levy fines because there will not be a political solution to this issue in the next two or three months.

Deputy Michael Moynihan: Information on Michael Moynihan Zoom on Michael Moynihan I am deeply concerned about this issue. I have raised it at all stages in the past six or seven months. The Europe wide milk quota is ultimately what we will require. I would be concerned if there are to be discussions on not abolishing the quotas in 2015 because many farmers have invested heavily in that and are gearing up towards it. It is important that in whatever framework there is the possibility of a butterfat adjustment. What is the position on that? How many countries support it?

The Danes are like us in terms of milk production but we must build a coalition of partners in Europe. My position for the past eight or nine months is that a Europe wide milk quota must be put in place because we continuously talk on the economic side about export led growth. The Minister is well aware that if the production of milk that ceased at dairy farm level in the past three or four months had continued in full production there would have been markets for that product. We must instil that notion across Europe because they are talking about the austerity packages and gaining exports and so on but we have a product. That does not make sense.

Deputy Simon Coveney: Information on Simon Coveney Zoom on Simon Coveney I would love to have a Europe wide milk quota. It would mean we could increase Europe’s output of milk by 4% or 5% because that was the amount it was under quota last year but we must get real. We cannot even get agreement on a butterfat adjustment never mind a radical rethink in terms of the way we manage quota across the European Union. I agree with the Deputy on that but it is important not to mislead farmers in terms of what is and is not possible. France and Germany are fundamentally opposed to any change in milk quota management because they hold the view that if the reins are released at all there will be an immediate increase in supply which will impact on prices. They are paranoid about that, as are some of their farmers’ unions.

It is important to state also that even though some countries are raising concerns about milk quotas ending in 2015 the big countries, including France and Germany, and the vast majority of other countries, have bought into that happening and, like Ireland, are preparing for it. That will happen in 2015 but I would make the point that even though Ireland, Denmark, the Netherlands, Luxembourg, Cyprus and two or three other countries want more flexibility around butterfat adjustments and an increase of more than 1% in quota allocation for countries pre-2015 — that 1% increase each year is the only flexibility we have currently — there are countries that are fundamentally opposed to that.

We have put together informally a coalition of the willing but it is not yet big enough to force change. The Council will not change this because it has an agreed milk health check, which Ireland signed up to in 2009. That is not working but if this is to change we will need a qualified majority in Council to push through that change. We could not do any more to try to achieve that but we will not get there by the end of this quota year unless there is some dramatic change that I am not expecting in the coming months.

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