asked the Minister for Agriculture and Food if his attention has been drawn to the widespread disquiet because of his decision to postpone the introduction of a scheme for the temporary one year leasing of milk quotas; and his views on whether the decision should be revised.

I announced recently that I am setting up a working group comprised of representatives from the industry, AFT/ACOT and the Department to review the various operations of the quota system. I am requesting the group, as its first task, to report to me urgently on how and when we should introduce a system of temporary leasing of quotas on an annual basis. The group's interim report on this issue should be made in sufficient time to enable me to decide whether I should introduce the scheme for this quota year.

Does this indicate that the Minister may change his mind and permit the introduction of such a scheme for this year if the review group so recommend? The Minister indicated he was postponing a decision.

The Deputy's question suggested that I had indicated my mind at this stage in respect to this matter.

The Minister did.

I said I was postponing implementation of it pending a review. I did not say I was opposed to it or for it but that I was postponing implementation pending a review by this representative group. There is no question of my changing my mind.

We shall not get into semantics. The Minister indicated in Waterford that he was setting up a review group to report to him.

This must not lead to argument.

I am glad the Minister is responding to the criticism. Does he accept that there have been, in fact, meetings between his own Department, the co-operatives and all the farming organisations arising out of which on 3 March last this issue was agreed in principle by the Department, the ICOS and all the farm bodies and that in that situation the relevance of a further review group is not immediately obvious?

There I must take issue with the Deputy. Everybody of whom I am aware has welcomed the review group.

On this issue.

All interests. The purpose of this review group is to manage the consequences of decisions taken before I became Minister for Agriculture and Food. These consequences are having major implications for the primary producers, young farmers and small producers. It is for that reason that I have decided to get all the interest groups together, not always in agreement automatically with each other, to look into this matter and report back to me with recommendations before September. I have told them that I want a report on this.

Would the Minister not agree that a review scheme such as this would require very careful examination? The one year leasing could be very dangerous and could disrupt many producers. It is important that a number of years be built into it.

As Deputy Leonard has said, the view is held widely among young farmers and small farmers with an adequate quota. They are very concerned to ensure that there would be no way of avoiding the restructuring and clawback for a national pool introduced last year. I have a very strong sympathy with the small producers and the young producers.

Hear, hear.

I hope that this review will enhance their position.

I hope it will lead to any further problems being ironed out which were not ironed out at the previous meetings. Does the Minister accept that this temporary one year leasing scheme which has been introduced by member states of the EC can be quite an effective management instrument in the situation of further quota difficulties developing in the current year, which is highly likely?

Where I introduced a scheme for the creation of a national pool for young farmers and small producers and that scheme was dependent on a certain reduction of milk for leasing——

A 25 per cent clawback.

——yes, the clawback — and when that could be frustrated by temporary leasing, and the interests of both young farmers and small farmer, frustrated, I thought it appropriate that the matter be looked at very seriously. I hope that after a few months I shall have a recommendation from this all-party group, which will involve also Macra na Feirme who have very strong views in favour of what I am saying.

There is a way around that.

In view of the Minister's sympathy with the young farmers' point of view, would be not agree that under——

Young farmers and small producers.

——and small, would he not agree that under the present regulations with regard to clawback it is not right that they should relate to inherited quotas?

I have as the Deputy will appreciate, the utmost sympathy with young farmers and small farmers. They recognise that. Macra na Feirme have indicated to me their total endorsement of what I am doing. They have gone public on that. I do not see that anything I have done so far has done other than promote their interests. I want to ensure that I can do that this year also.

I was talking about inherited quotas.

11.

asked the Minister for Agriculture and Food if the 4 per cent from the temporary linear suspension scheme in 1987-88 and the further 1.5 per cent temporary suspension of quota in 1988-89 are meant to be a permanent feature of milk quotas; and if not, when the temporary suspension will be waived.

While the 5.5 per cent reduction in quotas which was agreed at the Council of Ministers in December 1986 has been extended up to the end of the 1991-92 milk year, it still remains as a temporary suspension and is not a permanent cut in quotas. In fact, the regulation to give effect to the extension of the quota regime to 1991-92 will specifically provide that the Council may during that period adjust the extent of the reduction in the light of market developments.

When this scheme was negotiated in 1986 was it known that there would be a possible extension? Were farming interest groups aware that by 1991 there would have been a 40 per cent cut in the yearly compensation per gallon of milk?

I was not present at those negotiations when the scheme was introduced. I understand that it was introduced as a temporary suspension which could be capable of being renewed. For that reason, the French Minister and I particularly, have insisted on a clause being inserted in the new regulations which gives effect to the extension which provides — and I want to make this very clear — that during the extended period the Council of Ministers may decide to revise the extent of the reductions in the light of the internal and external market outlook and the stock situation. We got Council agreement that this would be temporary and if the conditions in the milk market particularly continue to come under control, a number of us at the Council of Ministers will be insisting that the temporary will be meanwhile set.

What about the 40 per cent reduction in cessation?

Of course there is a reduction but by comparison with the compensation paid for permanent cessation it measures up fairly well. What we are talking about over a five year period would be a rate of compensation of £1.59 a gallon for temporary suspension and the compensation for permanent cessation over seven years is £1.61 per gallon. There is no real difference.

Question No. 12.

Does the Minister propose to take any action to alleviate the kind of hardship that occurred in the year just ended where producers had seriously exceeded quotas? At this stage it might be a good idea to formulate plans to ensure that the same does not occur in the current year.

I agree but in fact the excess over quota in Ireland, despite all the threats and worries and anxieties regularly expressed was not very large at all and the excess was much less than in any other country.

Serious hardship was caused in the meantime.

I agree that the last few weeks were unsatisfactory. I have already indicated that there will be a system of regular monthly reporting this year and my Department will constantly review the position. I am sure that we will not face a problem next year.

They are already running at over 10 per cent of the quota.

You should be a German or a French farmer and you would know what it means.

I have called Question No. 12.