Brian Ó Domhnaill (Fianna Fail)
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I thank the IFA representatives, some of whom were here before, for the presentation. This is obviously a vitally important area as we have come out of the era of quotas. I think quotas were in place for approximately 32 years. Many farmers viewed the end of the quota era as an opportunity to invest, getting away from the super levy culture and moving into investment. The financial crisis came and had a major impact, which was touched on in the presentation. Intervention and production opportunities were also touched on.

Unfortunately, the dairy industry produces a commodity and one is dealing with the markets. All the markets are volatile. In the US, there is the change in the interest rate and the Chinese market has gone through the floor, all of which are having an impact right across the board. In the most recent milk auction in New Zealand, prices were up 16%. However, 16% of a very low price is not a great deal.

The demographics of the world population present great opportunities. Incidentally, the European population up to 2050 will fall by approximately 50 million. Most of that increase in population will be in the emerging markets or in Third World countries. The population growth will be most evident in places like Syria and Iraq. There will be opportunities but it is about getting to those markets.

TheJournal of Agricultural Economics has looked at the difficulties dairy farmers are experiencing in Ireland, in particular investment opportunities which are being lost as a consequence of no finance being available. A paper by Conor O'Toole and Carol Newman in that journal examined the challenges dairy farmers are facing, in particular smaller and medium sized dairy farmers as a result of having no reserves in place and not being able to withstand the current challenge which the larger farmer might be able to withstand. They called for policy intervention at Government level, similar to the call from the IFA, that is, for the Government to get tough with the banking sector and to provide some level of fluidness in regard to being able to lend to the dairy industry as an industry with growth potential in the Irish economy. That has to happen. Some form of Government-sponsored or European Investment Bank loans may be the only alternative to a fluid banking sector. Do the delegates have a view on what can be done by way of policy intervention in that regard? Do they have suggestions or recommendations?

Do the delegates have views in relation to the EU market mechanisms, such as intervention, export refund or private storage aid, which was introduced and then taken away in September? They mentioned the possibility of intervention. Intervention may be required but obviously it will lead to difficulties with storage and so on. However, one would hope that when the markets improve, one could sell on the product.

What about the export refunds? Does the delegation believe that it would form part of a solution at European level under the regulation and the protocols available to Commissioner Hogan?

No one envisaged the price volatility in the dairy sector - in fact, the price has dropped off the cliff. The price has gone from a high of 43 cent to about 29 cent. According to Bord Bia's figures, the average price per litre is lower than that at the moment. The price was rising from June 2014 but since January 2015, it has fallen off the cliff. Quotas have obviously played a role in the price drop.

In a nutshell, will the delegation identify the two or three main solutions, from a public policy point of view, the Department of Agriculture, Food and the Marine implement? What solutions does price volatility call for? Will the delegation explain its solutions in a nutshell so that the committee can use its resources to ample potential to try to raise these issues? There are approximately 200 dairy farmers in my own county of Donegal. This issue has affected a lot people who invested heavily in this sector because they expected that the abolition of quotas would bring about financial rewards. Unfortunately, many of the smaller or medium sized dairy farmers will go to the wall unless there is some form of intervention at a policy level, whether using European tools or in regard to banking, and the economics back this up. In regard to banking, one will only borrow from the banks if one seeks to invest. Why would anyone invest in a sector if there is no policy support for a three-year or five-year period? I would like to hear the thoughts of the delegation on my points.