Simon Coveney (Cork South Central, Fine Gael)

That is a good question. I understand that France and Germany do not even want to entertain a discussion on this issue because the milk health check was agreed after a lot of difficult debate, particularly with France and Germany. Many people in both those countries would rather not see an end to the milk quota system. They see restricting milk output as a way of securing price consistency in future. Therefore the very idea that we would allow countries like Ireland, Denmark and the Netherlands to expand milk production dramatically in the short term is perceived as a risk to milk price stability between now and 2015. Whereas they have conceded that after 2015, when there is a long lead-in time to prepare for that, milk quotas will end, they are certainly in no mood to concede that there should be significant increases in milk production between now and then.

The counter argument is that milk production is falling in certain countries. In my view, overall milk production across the EU would not increase if Ireland, Denmark and the Netherlands were to increase production dramatically. That is because countries like Slovenia are 17% below quota. Our closest neighbour, Britain, is well below quota and it is not an issue there because production is nowhere near the quota. European thinking is needed here.

Many of the new markets for Irish dairy products are actually outside the EU. One of the reasons I will have to leave the Chamber early this evening is that I am meeting the Chinese Minister for agriculture. He is visiting Ireland this week to look at our production and traceability systems, as well as our quality food production. There are also exciting markets for infant formula, for example. Ireland sells 16% of the world's total infant formula exports and we want to fill the enormous and expanding market in China. The irony is that the expansion of the Irish dairy industry may not affect European markets at all. It is up to me to make persuasive arguments to open up a reasonable discussion on this issue. I am trying to do so and, to that end, there is an informal Council meeting in Hungary next week where we will start the process.

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