Brendan Smith (Cavan-Monaghan, Fianna Fail)

The continuation of a strong decoupled direct payments system is of fundamental importance, in my view, to stabilising farm incomes at times of market volatility. Decoupled payments remain the best way of underpinning the incomes of small family farms, while allowing them respond to market opportunities. In this context, it is essential to acknowledge the linkage between the income stabilisation role of direct payments and the market stabilisation role of our current market management measures.

I consider that existing market support tools are appropriate and I believe there is broad agreement on this among member states. The application of intervention and APS in the dairy sector during 2009 illustrated the usefulness of these measures in contributing to market recovery and stabilisation, albeit at very low prices, and the need for them to remain in place. There may be a need for additional flexibility or adjustments, for example, in periods of application and volumes. Nevertheless, these measures are pitched at safety-net level at present and should remain available to us after 2013.

In addition to the current market supports, there is an increasing emphasis on risk management mechanisms such as subsidised insurance and mutual funds. I believe we should look closely at the possibilities offered by such measures. Ireland does not have extensive experience with insurance systems and I would be cautious about the benefits of establishing EU wide insurance regimes. My main concern is that the diversity of production systems and range of risks across the 27 member states are too wide to accommodate a single EU-wide scheme. Therefore, I would like to see a suite of options available to member states to use at their own discretion within funding limits.

There is also a need to address increased market volatility and to have effective mechanisms to manage this. I believe we should consider the potential usefulness of new, additional tools to combat increased market volatility. In that regard, I am open to examining in greater detail the mechanisms used by other countries such as the US, particularly those concerned with underpinning farm revenue or income. I am not suggesting that we immediately adopt similar measures in the EU but I would like us to examine them in greater detail to see whether they would deliver benefits on the EU market.

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