Mr. Pat McCormack:

I, too, am conscious of the time as I have to be in Adare by 8.30 p.m. I hope my departure will not be delayed by clampers.

The ICMSA is pleased to have an opportunity to feed into the proceedings of the joint committee. We were also present in the Visitors Gallery for the previous discussion on the south east during which we heard about education and agriculture. The collaboration between Waterford Institute of Technology and Kildalton Agricultural College has been of great benefit to agricultural students studying at the Kildalton site.

For reasons of time, I will not read the entire submission. I propose instead to highlight some of the main issues. There are 18,000 people employed directly in agriculture, forestry and fisheries in the south-east region, which is twice the national average. The reason is the quality of the land in the region and the ability of its people to produce agricultural products. This message has been reinforced by the investment commitment of €180 million given by Glanbia plc to process milk produced in the region beyond 2015.

The agri-food sector employes 8,000 employees in the south-east region in the areas of farmhouse cheeses, ice creams and meats. Opportunities will also arise for retraining in the area of light engineering to serve the agriculture sector.

Under the ambitions set out in Food Harvest 2020 for the period between 2015 and 2020, the primary duty of stockmen, other than stockmanship, will be the production of raw materials for the food industry. They will also be required to provide other services for farmers which will provide opportunities in the years ahead.

I acknowledge the role of Enterprise Ireland and Leader groups in providing financial and practical supports for individuals who are establishing agri-food enterprises. The south-east region covers only four and a half counties. I am from County Tipperary, half of which is in the south east, while the other half is outside the region. Despite its size, the south east accounts for 22% of the country's milk output.

Reform of the Common Agricultural Policy will have a major impact of farmers in the south east who fear the possibility of convergence of payments. Such a move could undermine the prospects of the Food Harvest 2020 strategy, given that in 2009 direct payments accounted for 123% of farmers' incomes. For this reason, we are concerned about the current proposals.

The abolition of quotas will also present challenges. Mr. O'Loughlin is a supplier to Glanbia which has moved to flatten the peaks and troughs in milk supply by providing back-to-back contracts with purchasers. This move provides stability for the primary producer, the purchaser and, ultimately, the employment structure in the association. We view Wicklow ICSMA as a leader in that regard.

Members of the joint committee feed into the CAP reform process through their contacts with the Minister for Agriculture, Food and the Marine, Deputy Simon Coveney, and the Taoiseach. The Irish Presidency is a critical six month period for CAP reform. The primary producer must be protected under the proposals if employment is to be enhanced and we are to avail of the opportunities that will arise after the abolition of quotas in 2015. As a country which exports 85% of our produce, we are conscious of the various aids available under the Common Agricultural Policy, including aid for private storage. We raised this issue with the Department and I encourage the joint committee to follow up on it. This aid is very important to the dairy sector, given the seasonality of milk supply.

The availability of credit is another issue that is creating serious challenges for our members and industries across the economy. Given the climatic conditions we have experienced in the past 18 months, these are especially serious for farmers. At the end of 2011 farmers owed €1.9 billion, which was €307 million lower than in the previous year. However, the past 18 months have undone much of the progress made in this regard. Merchant credit is also an issue. I have met various merchants in the south east who have expressed major reservations about their ability to continue in the event that credit does not become available and farmers are not given an opportunity to repay outstanding loans over a number of years. Merchants want the banks to function properly because they are currently operating as bankers for individual farmers.

The review of the nitrates directive is another issue facing farmers. We would like the current derogation to be maintained and have approached the relevant authorities in that regard. The south east has the best land in the country and the derogation is necessary to allow us to engage in intensive farming. We would also like the bureaucracy associated with the directive to be reduced. The application process should be simplified, for example, by rolling over derogations for individual farmers rather than requiring them to reapply each year. The ending of the period within which farmers may export slurry on 31 December is also a significant issue for them. If they were allowed to export up to 15 February, many of them could meet the requirements of the nitrates directive without needing a derogation. It is impossible to export slurry from 15 to 30 December as this is a closed period.

The main challenges facing the dairy sector are reform of the Common Agricultural Policy and farm fragmentation. I ask the political parties represented on the joint committee to lobby the relevant Ministers to ensure steps are taken in the budget to facilitate the consolidation of holdings. The milking platform around the parlour is the critical issue for dairy farmers in delivering expansion and further employment opportunities. Price volatility is also a major challenge for us and we seek some form of price stabilisation or relevant market support in that regard.

The Irish Creamery Milk Suppliers Association is involved with the European Milk Board. We seek the establishment of an EU dairy market monitoring agency which would issue early warnings where oversupply appeared to be imminent.

The reality is that even with the abolition, it will be supply and demand. That is a brief presentation. We are willing to take any questions or comments.