Simon Coveney (Cork South Central, Fine Gael) | Oireachtas source

It certainly does. I see that Deputy Kelleher has also joined us for the discussion.

Prices paid for products in the marketplace are a function of a number of market forces and the negotiation of commercial contracts is essentially a matter for the contracting parties. The National Milk Agency, which operates under the aegis of my Department, was set up in 1994 to regulate the supply of milk for liquid consumption. All farmers supplying milk for liquid consumption in the winter months do so under contracts with processors that must be registered with the agency. The agency does not have a role in setting the retail price of milk, but farmers supplying milk in the winter months are paid a premium over the price paid to farmers who only produce milk in the spring-autumn period. This premium reflects the additional costs of producing milk in the winter months.

The programme for Government contains a specific commitment to enact fair trade legislation in the retail sector so as to ensure a balance between various players in the grocery goods sector. I assure the Deputy that this legislation will be produced by the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, before the end of the year or early next year. It will introduce a legally enforceable mandatory code of conduct between large multiples and the people from whom they source food and milk. The contracts will be respected.

There is a broader problem across Europe in terms of the percentage of the final retail price that farmers get for their produce, including liquid milk. Ten years ago, they would have got an average of 30% or more of the price, but they are now getting less than 20%. The Commission is examining this issue to try to find solutions. If Ireland tries to implement solutions on its own, retailers will simply source from elsewhere, which is not what we want.

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