Mr. Martin Keane:

Deputy Ó Cuív asked if people should do more in the advocacy area around the superlevy and finding a solution. I understand and fully appreciate the political arena in which Commissioner Phil Hogan operates and take full cognisance of that. With the superlevy butterfat coefficient adjustment, it is a technical adjustment within the powers to be done. That is my understanding under the Common Agricultural Policy programme. It is doable from a technical perspective. I do not know what other areas of impediment exist but it is a technical possibility and we advocate that it be looked at.

Storing milk is not an option. We are selling ourselves as a quality-assured milk-producing country and our products are quality assured to the highest standard. The facility for storing milk for more than two or three days is not there and it is not recommended that it be stored any longer than two or three days at most. All players in the industry will do everything they can from the co-operative perspective to facilitate as much storage as is practical without compromising the quality of the end product. We do not have great latitude in that respect.

There was mention of the EU perspective, China and barriers to trade. At EU level, agricultural exports relative to other types of exports are not significant but they are significant from an Irish perspective. More work could and should be done. We do not want to talk ourselves into a depression as there are major opportunities, and a small proportion of a huge market would satisfy the appetite for growth in Ireland. We will not move the dial much but there are opportunities. If we had an entry point, it would be very advantageous.

The banks have moved somewhat in the past year to try to be more user-friendly, but lending against assets is a major restriction. I do not advocate reckless lending in any way and we have a fair idea of the impact that may have had not only on the economy but on the people. Nobody would advocate that. Nevertheless, there is much merit in having a bank with specific expertise and which deals with one industry. It should have an in-depth understanding of challenges and opportunities. I do not wish to volunteer any more than that now but one can see how there would be an advantage in having a specific set of skills.

Deputy Deering made a point about prices which is exactly on the money. We have not got to the price he outlined but the indicators are that we may be getting there. There is some good news from New Zealand, with the global dairy trade up 9%. Perhaps a foot has been put under the fall but the level is still very low. Input costs in Ireland are very high and we are price takers when it comes to fertiliser and imported feed. Our use of nitrogen is in the tenths of 1% for the world. Nobody will rush here with thousands of tonnes of nitrogen and we are a kind of add-on to Europe.

I agree with Mr. Murphy's comments about efficiency and we must drive it at farm level. There must be a major emphasis on training. I do not disagree with any of those comments. The farm apprenticeship board and the training programme, which lasted three or four years, gave participants a wealth of different experiences. They did not just listen to one prophet and they had the advantage of having three or four different producers scattered throughout the country. They came out of it with a fairly broad perspective. There could be a major benefit there.

New entrants to farming, regardless of their age, be they young or middle-aged, face a big challenge because of their lack of experience and the initial capital expenditure needed to start up. They are in a vulnerable position to deal with volatility. I would caution against being heavily leveraged. The biggest impediment to the development of any of the industry is being too heavily leveraged as one cannot sustain any dip for a period of months, not to mention years.

Much value has been driven from the liquid milk market both at processor and producer level. Much of the overflow from Northern Ireland, because of the state of the industry in England and the flow of milk from England to Northern Ireland, would have given those producers an opportunity to expand at a great pace. In terms of costs, it was probably not managed particularly well, but there were opportunities for processors to acquire milk that was contracted on the spot market at very competitive prices and sell it into a market in the Republic where milk was contracted, in other words, where people had contracted volumes to supply milk 365 days of the year. Those volumes would have commanded a premium commensurate with the extra costs attaching to it. Some 25% or 26% of the milk consumed in the Republic is from Northern Ireland. I am not whingeing about that other than to say that there was not a level playing field in the sense that the southern Irish processors were buying on contract whereas milk from Northern Ireland was being sold here having been bought on the spot market and there were times that they had huge price advantages. They have driven value from the food chain from the processor right back to the producer. I would not disagree with that.