Mr. Michael Barry:

I have some summary slides on dairy. My name is Michael Barry. I represent both the primary and secondary dairy processors in Ireland. Much has been said in recent months about the sleeping giant that is the Irish dairy industry. Behind that is a genuine opportunity for Ireland. As a legacy of the CAP the industry has operated under production constraints. We were limited in the ability to increase production because of the European milk quota system. In 2015 those shackles will finally be lifted. We have lived with quotas for 30 years and on farms and in processing we are getting cumulative productivity gains. Farmers have been breeding better animals, investing in newer technologies at farm level and there has been a generational change in many farms. Agricultural colleges have been oversubscribed. It is a happening industry with optimism, which is exciting and spells opportunities for Ireland.

The market opportunities are also there. The timing is appropriate. The global population is growing, and so is the consumption of dairy products. Not alone are more people eating dairy products, but we as a population are eating more dairy products, yogurts and convenience foods and drinking more dairy-based beverages. An increasing amount of dairy is coming into our diet. We are seeing this in the least-developed economies in the developing world. The market environment is very exciting. Ireland can play its part in leveraging the opportunities of this changing market dynamic and where that is evolving to. Ireland is already a strong leader globally in the manufacture of infant nutrition. We are one of the major producers of powdered infant formula and we have also developed a very significant base in the development of medical and sports nutrition and differentiated consumer foods. Brand Ireland and dairy brand Ireland is a very well-known and respected product throughout the world.

We are producing just under €3 billion of dairy products per annum. We export to more than 150 countries worldwide, sometimes directly and sometimes in partnership with other industry players. In Ireland we achieved those sales on the basis of 5.5 billion litres of milk. That is approximately 3% of the European milk pool. We are not as intense in Ireland as they are in other parts of Europe, so we have approximately 4% of Europe's dairy cows. There is a tremendous opportunity to expand there. An extra 50% milk means an additional 1.5% milk within the European milk pool, meaning the EU 27. The market can take it. It is not an unbalanced expansion ambition in the context of European dairy, and when one considers the opportunities outside the European market, one can see that the market demand and potential is there. We will not have problems finding new markets for that product.

We will need to be able to produce and process 50% more milk, and there lies the enterprise opportunity for us. If one considers the nearest regional dairy processing facility, such as Lakelands Dairies or Glanbia's Ballyragget plant, we will need another three of those in Ireland within the next four years. We will need three new processing facilities of that size. Glanbia has recently announced the first of them in Waterford. There will be more such expansion because we will need to find a means to process that milk. That is a very exciting prospect. The industry is up for it. The industry will need to work more closely and in a stronger and more collaborative way with State agencies such as Enterprise Ireland, which is doing very good work in supporting the industry and finding means to produce and process milk into high-value market products.

At farm level we anticipate 200,000 extra cows. That is a 20% increase in herd size to produce that 50% extra milk. We are becoming more efficient. We will be able to get more milk from these cows without changing our grass-based dairy production system.

In that context I will refer to some legislative changes that are going through the Houses. The proposed climate Bill is important because the emissions from primary agriculture are relevant to Ireland and its ambition to move towards becoming a low-carbon economy. The proposal on the development of sectoral roadmaps is entirely appropriate. We must deal with emissions from primary agriculture and dairy cows in a different way from how we deal with emissions from cars, machinery and motors - things one can engineer carbon out of. One cannot engineer carbon out of a natural process such as cows. This route that has been proposed for the development of sectoral roadmaps within the national climate Bill is appropriate and one that we would definitely support.

Innovation is very important. Enterprise Ireland is part-financing and strongly supporting Food for Health Ireland, FHI, an industry initiative in conjunction with Enterprise Ireland to develop new functional ingredients that can be mined from dairy products. We are in negotiation with Enterprise Ireland to do something similar towards the development of an innovation centre that will focus on processing efficiency and processing challenges, and trying to help us to become not just a leader in new dairy products but a leader in new dairy technologies. The growth is real, it is happening and we look forward to a strong collaborative development.