Dáil debates

Tuesday, 24 March 2009

3:00 pm

Photo of Brendan SmithBrendan Smith (Cavan-Monaghan, Fianna Fail)

I met Commissioner Fischer Boel in Brussels on 11 March to discuss the dairy situation and explore the options open to us to restore market confidence. In particular, I had two main issues to press her on. The first was the requirement to continue to buy butter into intervention at prices close to the fixed price level. The second was to stress the need to export larger quantities of butter and skimmed milk powder to international markets. I am satisfied that we have seen positive progress on both these key points.

At last week's management committee meeting it was agreed to purchase a total of 6,665 tonnes of butter into intervention at levels very close to the intervention price. This is a very important development. In addition to this, increased quantities of butter and skimmed milk powder were granted export refunds at the same meeting. The volumes supported with export refunds last week were almost equivalent to the combined totals of the three previous tenders. This is a welcome improvement and should help bring stability to the market.

I have of course had ongoing contact with the Commissioner long before my meeting on 11 March regarding the need for appropriate action to support the dairy market. The Commission responded initially with the early introduction of private storage aid for butter and with the reintroduction of export refunds in January. In addition, the Commissioner gave a commitment to continue intervention for butter and skimmed milk powder under the tendering arrangements once the fixed limits were reached. These were welcome developments and well judged at the time.

At yesterday's meeting of the Council of Ministers there was a debate about the unprecedented situation in the dairy sector at present and the short-term outlook for dairy markets. I informed my colleagues that we are entering a period of abundant supplies and the levels at which refunds and intervention function will be critical to the speed at which we emerge from the current slump. While I was encouraged by recent developments in community support, I again took the opportunity to urge the Commission and the Commissioner to utilise the market management measures to get the market back to equilibrium as quickly as possible.

It is clear that the elements that will lead this recovery are competitive refunds that allow the sale of dairy products onto world markets in considerable quantities and the continuation of intervention under the tendering mechanism, provided that these arrangements remain relatively attractive. The Commission was left in no doubt by a number of other member states and myself of the importance of fully using all available supports to manage the market in the coming period.

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