I am glad to have an opportunity to contribute to the debate and to indicate that the Labour Party will support the motion without equivocation. I am one of the few people present who has been a member of the Oireachtas Joint Committee on Agriculture and Food over the past number of years where there has been intense focus on this topic. The members of the Milk Rights Group would attest to that. I congratulate that group and its committee for the dedication and commitment it has given to this matter and to Mr. Ned Nagle, its agriculture consultant, who has worked extremely hard in this regard.
It should not have been necessary for this motion to come before the House. It has been clear for some time, especially since the 1997 Supreme Court judgment in Duff v. Minister for Agriculture and Food, that an injustice was done to an estimated 800 to 900 development farmers who had been denied milk quotas since 1984 when the milk quota regime became a reality for the dairy farming industry. The vast bulk of those farmers, 35 or 36 of whom live in my constituency, who are scattered throughout the rural areas, are generally small farmers whose continued existence is essential to maintaining the fabric of rural Ireland. Some of them have gone by the wayside, as someone said earlier. Those who have struggled on against the tide have made a major contribution to the rural areas and communities in which they live.
As an agricultural consultant, I have dealt with some of those farmers. As a barrister, I am in the position that I understand the advice the Minister has been given by the Attorney General and its motivation. However, there is a difference between the legal strictures or impositions of statute law and the legal moral force of a case which is clearly evident here. One must take advice but one may also believe that the moral force of the argument is such that one does not have to rely upon the advice.
The Statute of Limitations Act was brought into being in 1957 and amended in 1991 for certain circumstances to bring legal certainty, especially in the ownership of property. That was one of the major issues. It was also brought in for claims against the State. In this case, property rights are being claimed and a resort to the Statute of Limitations means it is being used as a sword rather than a shield to ensure legal certainty.
It is never the wrong time to do the right thing. The Minister has examined section 2(1) of the Statute of Limitations (Amendment) Act and has received advice. He is being told that, if the people in the Visitors' Gallery and the 800 or 900 people they represent throughout the country, including those in my constituency of Westmeath, believe they have a case, they should have initiated it by March 2000. Bringing cases can be a very severe imposition in terms of funding, especially given that a legal precedent exists which sets out that there was an undeniable mistake in law made in 1984 when this EU regulation was brought into being.
There has been a denial of a property right to these people, who are easily categorised. I put various questions to them and their consultant when they were before the joint committee. I know the legal advice of the Minister and one of the arguments of his officials is the opening of the floodgates, and the Minister indicated at the end of his speech that that is one of his concerns. One can appreciate that, but I understand that this group, which has existed since 1997, has travelled a circuitous route to try to ensure the people directly affected by this directive and its implementation in 1984 have been identified. It has a number of files with which it is prepared to furnish the Minister to help him in this regard.
The joint committee indicated that the Department should advertise to ensure no one who should be included was excluded. That is always a concern. An advertisement with a time limit of two or three weeks to help ensure that everyone involved was identified might have been the way forward and the committee made a recommendation in that regard from which no one deviated. The joint committee did not prescribe a solution and that is important to note. It left open the possibility of obtaining a quota to compensate them for their losses. In fairness to the group, it was not looking for the optimum but a reasonable amount which would give its members the opportunity to continue in farming, to earn a livelihood and to pass on a valuable and tangible asset to their families. This is important, given the threats. The 2010 report highlights the fact that it is getting more difficult for people to remain in full-time farming which is what many of these people who struggled against the tide would like to do. The Minister could achieve this through a quota allocation, compensation, a combination of both or whatever other measures are possible.
The plaintiffs in the Duff case claimed an entitlement to a milk reference quantity or quota under Article 3(1) of Council Regulation 857/84. This article provided for special or additional quotas in particular circumstances otherwise than by reference to the quantity of milk or milk equivalent sold by the producer. Two formulas were involved. Formula A applied to milk or milk equivalent sold by the producer and formula B applied to that purchased by a co-op or factory. Both formulas referred to the base year which, for Ireland, was 1983 and 1981 for other countries, such as Italy. The additional quantities were not part of an increased quota designation for Ireland but had to be drawn from a reserve. This was one of the difficulties at the time. This reserve had to be constituted by Ireland from within the given or designated quantities available.
It is appropriate to refer to the farm modernisation scheme. The scheme was designed to help restructure agriculture on the basis of assisting farmers who had the occupational skills and agricultural resources to adopt rational methods of production with a view to the formation and development of farms which would enable farmers in this category to attain a level of earnings compatible with those in the industrial sector. ACOT was the Department's implementing agency. I was a private consultant at that time and opportunities to participate in ACOT were limited.
The directive laid special emphasis on the preparation of a development plan which had to iden tify the work to be done and the period within which the expansion could be achieved. It also provided that those farmers who implemented such a plan should be encouraged and aided financially by a system of incentives and grants. ACOT was charged by the Department to ensure the implementation of the scheme. The aim was to draw up a plan which would show an expanded farm output sufficient to generate an income which would compare favourably with the average earnings of a farmer's industrial counterparts.
All the plans drawn up envisaged expansion of or entry into dairy farming which was the backbone of many rural areas. The real threat was that many of the plans of Milk Rights Group members would not have come to fruition until after 1983 which was the base year. The scheme was an attempt to achieve viability for thousands of farmers. It follows therefore, despite the fact that farmers who embarked on these expansionary plans with the full support, guidance and encouragement of the State, through ACOT, with clearly identifiable annual output expansion targets, could be allocated any of the milk quota they expected to get in respect of the gallonage projected in the development plans even though the production targets in the plan were achieved, as that gallonage was not sold or purchased in the base year of 1983. The crux of the problem was that those people who had just entered the plan or who were in mid plan but who had not achieved the target set out, were cut off in mid stream. It was as if their life saving equipment was taken from them and they were left to paddle their own canoe, with nowhere to go. They were often distraught and struggled because they were in a five year plan.
Depending on the stage their development plans had reached with reference to 1983 and the amount of expansion envisaged by the scheme, the quota allocated to farmers could be very nominal. Some farmers who thought they might get 15,000 or 20,000 gallons only got 2,000 gallons. These people were left high and dry.
Interest rates in the period 1979 to 1981 were 20% or 21%. Inflation was rampant and in double digits. Huge sums of money were borrowed from financial institutions to help major infrastructural undertakings such as land reclamation, new silage pits, cubicle housing, cattle crushes, concrete yards, milking parlours and machines and the purchase of additional cattle. Each step of the plan was carefully circumscribed and overseen by ACOT. Consultants did not get a look in. A farmer might have achieved only 10,000 gallons under the plan in 1983 but would have been designated between 20,000 or 25,000 gallons.
Before 1983, not achieving such targets was insignificant as farmers never anticipated that the circumscribed milk production would evolve into a super-levy and the imposition of a national quota. Because these farmers did not have the capacity or the quota to produce and achieve their planned output, they found themselves unable to meet substantial financial commit ments. Some farmers went out of business while others struggled on without the opportunity to reach their potential output. Farmers believed they would be protected because they had prepared plans and expanded production in accordance with the development plans.
In complying with European and national directives it is clear these farmers had a legitimate expectation of bringing their plans to fruition. This legal argument found positive expression in the 1988 Mulder case in the European Court of Justice. If these people do not get a special allocation at this stage the State is guilty of negligence and a breach of duty in allowing and encouraging them to prepare plans they were not allowed to bring to finality. The Statute of Limitations arises but farmers were encouraged to do so.
The then Minister probably thought he was doing his best and we will not say that everyone was involved. Much consultation took place and it was agreed that no national reserve should be created. The Minister referred to this outcome. It was also agreed that the entire national quota should be allocated to co-operatives. The then Minister appears to have been of the view that he could make provision for development farming out of the flexi-milk supply which was available. However, the EU Commission intervened some months later and knocked this suggestion on the head which meant that permanent quotas could not be allocated from the flexi-milk supply. This was a mistake. Mr. Justice Barrington, who was held in high esteem, had served on the European Court of Justice for several years and was very au fait with European law, decided it was mandatory on the Minister and the Department to provide a quota for farmers with diseased herds and that the Minister should also have used his discretion to establish a quota for young farmers and for development farmers.
The Supreme Court found this situation to constitute a fundamental mistake in law in that the Minister failed to establish a national reserve as he was obliged to do under EC regulations. The Minister had an opportunity to keep his commitment but he flunked it and put himself into a position where he could not exercise the discretion vested in him and which he should have done. Tonight we ask the Minister to recognise the legal difficulties involved and not behave like an ostrich burying his head in the sand. The Minister now has an opportunity to rectify an injustice which those people suffered. It has had a crippling and damaging effect in so far as it has curtailed their ability to reach their potential, something which is important to them but which is essential to us as a nation.
Mr. Justice Barrington made no bones about it. He said:
The State, on its own behalf and as agent for the European Commission, induced these farmers to borrow money and to develop their farms on the basis that there would be an expanded outlet for the sale of their milk. Now, long after they incurred heavy expenditure, they find that they will not get the outlet for the sale of their milk which they expected and were induced to believe they would receive.
He then referred to Council Regulations EEC/856/84 and EEC/857/84, the two EEC Council regulations which combine to form the milk super levy system which came in at that time. As somebody who has taken some quota regime cases, I know they are a legal minefield. It is virtually impossible for anybody to deal with them with any certainty. It is something which we might get an opportunity to discuss in this House at some future time.
While the general principles of Community law might not provide a basis for member states to provide for the grant of special reference quantities or quotas to producers, there is nothing to prevent such a requirement being founded in the principles of domestic law. That is an essential point in the Supreme Court's findings. That is where the people who constitute this group have found solace and inspiration to carry on their fight. That means that although there was nothing in the general principle of Community law to compel the Minister to provide a grant of a special quota, there was nothing in it to prevent him from doing so either. That was the essential point. That argument was made but it died in the Supreme Court and this obviously affords protection to producers such as the Milk Rights Group. Therefore domestic law provided greater protection to them than that available under the legal principles applicable in the Community legal order.
The principles of the protection of legitimate expectations and the assurance of legal certainty are all certainly part of the Community legal order. That principle, the principle of legitimate expectations, is important. It cannot be used to enforce the view that the law will not ever be changed by the EU, but it can be utilised by people such as those in this group who set out on a course of action, expended money and acted to their detriment. While in strict legal terms the Minister could come in and argue, as he must do, that the Statute of Limitations applies, defences like that would fall if they were argued in court in an equity case. This is a different situation but in such equity cases where somebody has acted to their detriment and incurred fairly substantial expenditures, one could make such an argument. Whether such an argument would succeed is open to question, but certainly I would be prepared to make it.
Three classes of farmers could qualify for the extra milk under Article 3 of Council Regulation EEC/857/84. As Mr. Justice Barrington stated in his judgment in the Duff case, the Minister made a mistake in law in failing to establish a national reserve to facilitate the three categories and in particular in the case of development farmers and the young farmers, the eggs had been scrambled and could not be unscrambled. That is why those people were left high and dry and therefore the allocation was gone. It was critical.
In other circumstances, for instance, if it happened in the late 1980s or early 1990s, we would find it difficult to come into this House to argue a case for compensation but now we are fairly well off, although there are huge number of people excluded from this wealth. The economy should serve society and society should not be beholden to the economy. There is a huge number of people excluded and the Minister should use the resources available to help the 800, 900 or 1,000 people and compensate them for an injustice done to them.
It is a matter which we in the Joint Committee on Agriculture, Food and the Marine have discussed ad nauseum. I uphold the view of my colleagues on that committee, that there is a moral obligation to compensate those farmers for a mistake of law arising in 1984 which had nothing to do with them. That is the essential point.
The Minister stated that he has referred this matter to the Milk Quota Review Group. We hoped the group would come up with a solution but it is putting it on the long finger. Some member of that group is afraid to make decisions.
We are not privy to much of what goes on and there is an attempt to make sure we do not know, but we find out. I understand there was a whirlwind of activity today and we all anticipated that the Minister would arrive into the House as if he were Santa Claus arriving early bringing some goodies. In the end he arrived with a bag but there were no goodies. At the end of his speech, he tried to leave a gap open. I suppose that if I were in Deputy Sheehan's constituency, I might try and leave some gap open also.