Brendan Smith (Cavan-Monaghan, Fianna Fail)

Other than the introductory paragraph, my response to this question is much the same as that given to Question No. 43.

My Department carries out analysis of the dairy sector on an ongoing basis. The causes of the current predicament are widely known at this stage. The past year has been challenging for the EU dairy sector. During 2008 international dairy markets fell from the record high levels they had reached in 2007 and there was increased volatility in the second half of the year. Global supply increased in response to high prices and demand contracted during 2008 due to the economic slump. We are operating in a changed policy framework where world market forces have a major influence on the price paid for milk. This is particularly relevant to dairy producing countries such as Ireland which export the majority of product.

Ultimately, the market is the source of income achieved through competitiveness, efficiency and innovation. In an open market it is not my role to fix or guarantee prices for farmers. However, it is my role to ensure that the available support measures are utilised by the Commission during periods of market turbulence. Most EU market support measures were suspended since 2007 as prices were at such high levels. When the situation deteriorated last year I called on the Commissioner to reintroduce market supports and to use them effectively. The Commission has taken steps in recent months to address the situation.

For the remainder of my response I refer Deputy Creed to the reply given to Question No. 43.

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