Dáil debates

Thursday, 26 November 2009

4:00 pm

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

Last month I announced my intention to establish a consultative group to advise me on medium and long-term measures for the dairy sector. I did this following the special Council of Ministers meeting on 5 October, where we had a thorough discussion on the need for measures to manage the dairy market in the period up to and beyond quota abolition in 2015. At that meeting it was agreed to set up a high level group of member states, chaired by the EU Commission's Agriculture Director General, to examine the type of arrangements to be put in place.

The Commission high level group will examine medium-term and long-term ways of stabilising dairy farmers' incomes and improving market transparency. The group is tasked with delivering a comprehensive report by June 2010, and it is due to meet about eight further times before then, having already met twice. It will examine means through which contractual arrangements in the supply chain can contribute to the highest possible returns for producers. This would give them more bargaining power in the process and provide a buffer against extremes of market volatility such as those that are being experienced at present. The group will also examine existing market instruments and consider what other means, including a dairy futures market, could contribute to the objective of price stability in the longer term.

I decided to establish a consultative group so I could hear the views of the experts here on issues emerging at the high level group. In particular, the ideas, knowledge and expert opinion of the Irish dairy sector will provide key perspectives on how the sector needs to be developed and supported into the future. The consultative group is representative of the broad dairy sector in Ireland and all the main stakeholder organisations are participating in it.

The first meeting of the consultative group took place on 2 November and was chaired by the Secretary General of the Department. I intend the group to meet regularly and it will follow the progress of the Commission high level group, and I look forward to receiving constructive input from them.

While in the short term we are seeing some signs of an improvement in dairy markets, the work of the group will help us to prepare the dairy sector for the medium term. It is important to remember that the medium-term prospects for global dairy markets are good. The expected growth in wealth and increased population is forecast to stimulate strong levels of demand for dairy products and returns will improve to all parts of the sector. The Government is committed to ensuring the Irish dairy sector reaches its full potential. One of the major challenges in the medium term will be to ensure that Irish farming and the agri-food sector is at the heart of an evolving high-value food market, which is focused on quality and innovation. This is at the core of Government strategy which sets out a series of actions to develop a competitive, innovative and consumer focused agri-food sector.

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