Simon Coveney (Cork South Central, Fine Gael)

That is a very good question. There is no point in producing milk unless it has somewhere to go. The processing sector in Ireland is at full capacity during the high season when cows are out on grass and producing milk at their highest levels. At those times we do not have any excess capacity. The processing sector is looking at investing substantial sums of money in increased processing capacity.

Other exciting things are happening that will allow for an increased take of volume of milk. For example, outside Macroom a big plant is being built by Danone to produce infant formula. The Macroom plant currently produces 35,000 tonnes of infant formula, predominantly for export. Ireland produces 16% of the entire globe's infant formula consumption. By the end of next year Danone will be able to produce more than 100,000 tonnes of infant formula, which uses considerable milk volume, in Macroom. Things are happening.

Given that we have had quota since 1984, the processing sector stagnated in terms of volume output. Processors did not have to invest because they knew there would be no increase in milk volumes for the foreseeable future. There has been no investment in output capacity, in terms of volume, since the mid-1980s. Processors have invested in other areas but not in terms of volume. Processors know they will have to spent tens of millions of euro, if not hundreds of millions, to prepare for 2015.

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