Simon Coveney (Cork South Central, Fine Gael) | Oireachtas source

Yes. There are things that farmers can do and we have used the tax system to improve things. We have changed three-year income averaging to five-year income averaging so that people can average out their profits over five years rather than three years. As a volatility management measure, we actively encourage dairy co-ops to look at medium-term fixed price models. Glanbia and Kerry are already doing so and Dairygold is on the verge of putting a product together for farmers. I am sure other organisations are looking at the issue.

Many farmers have tied themselves to two or three years of fixed prices for milk at 32 cent or 33 cent per litre base price. They now look like they are in a pretty good position versus everybody else. When they fixed their milk price many other farmers claimed they were mad because at the time the base price was 38 cent per litre. Price volatility is the reason we have the dairy and beef forums. We want to look at models whereby we can help to hedge against or ensure against the downside of price volatility. Nobody wants not to benefit from the upside of prices either. We want to take the highs and lows to ensure more consistent pricing.

There is no reason we cannot look at similar models for beef production. I have more confidence in a successfully introduced producer organisation model for beef. It means beef farmers have a professional negotiator who negotiates on behalf of multiple beef farmers using an economy of scale to negotiate with factories. I would like see that model rolled out and that is what we are trying to bring to the beef forum. At the moment, beef farmers are simply price takers when they turn up at a factory and that is not where they should be.

There are many things happening to deal with price volatility.

We could have looked at using rural development funds to put a crop insurance model in place. Such a model would get farmers to put lump sums of money into an insurance model which we would top up. The problem with such an initiative is that often some farmers will pay for other farmers who may have a price difficulty. That model has not been very successful across the European Union so not very many countries are going for it, as far as I can see. I am very interested in coming back here to have a debate on our response to price volatility across the sectors because it is an interesting policy area.

We are also looking at a proper and active futures market in Ireland for dairy product that co-ops can use. If a small co-op can buy product on a futures market then it can offer its farmers guaranteed prices, if members know what I am saying. Such an initiative is used in the US all of the time and we could do it much more effectively here. We are looking at bringing a model for a futures market in Ireland to the dairy forum the next time it meets.

Teagasc has reduced its number of staff retirements from 50 to 31 which produced a saving of €3.3 million in lump sums in 2015. It is important to say that it has been agreed to assign Teagasc an extra 37 temporary staff to ensure that every farmer is accommodated in the context of the green certificate qualification many young farmers seek at the moment. The initiative brings the overall allocation of temporary resources for the green certificate qualification to an extra 77 people in Teagasc. We are conscious that the issue needs help and there will be more support where that came from. Teagasc needs more staff not only in education but in terms of its consultancy work. The freeze on recruitment across the public sector is being loosened. Teagasc is an obvious example of an organisation that will benefit from that and spend a bit more.

In terms of Deputy Penrose, I expected - as did a lot of farmers - that they would have to pay for a significant portion of the disallowance that was being applied to Ireland. Irish farmers were never going to have to pay all of it but they expected to have to pay a decent chunk of it. We now have agreed with the Department of Public Expenditure and Reform that we would clear it this year. That means the worry and burden that farmers have been concerned about in places like west Cork, Kerry and-----