Ms Anne Randles:

I apologise, I did have that noted. Ornua had sought an increase in the intervention price. The current intervention price is about 21 cent a litre, which is significantly below the cost of production in Ireland and in a number of other countries. However, there are some member states where 21 cent per litre is not quite so bad - the Baltic states and some of the eastern European countries. It is a problem for the Commission to know where to set the bar so that it becomes a safety net for everybody. Despite the misgivings of the Commission we believe there is a need for increasing the intervention price. Farmers are losing money with an intervention price of 21 cent per litre. Any operator selling product, and skimmed milk powder in particular, into invention is losing money. It is a punitive situation. We see this situation now since intervention was open. It was slow to take off and for operators to put their products into intervention because they lose money when they put product into intervention.

Our customers are looking very closely at the market and they see there is a floor of 21 cent per litre. They will hold off on their purchases as much as they can, as long as the floor is that low.

If there is a raising of the bar, it should not be to any significant degree, because intervention should not be the major market for dairy products. We should be striving to commercialise the product as much as we can, but in times of severe crisis, 21 cent per litre is really below any acceptable norm and it should be increased.