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

I thank the Deputy from raising this important issue. Prices in dairy markets are impacted on by global events. We sell dairy products throughout the world, as well as in the European Union. Factors such as production levels in the United States, New Zealand, Australia and the European Union, on the back of very good harvests and quite good weather for the past two years, have meant that for the first time in many years supply has been increasing faster than the demand for and consumption of dairy products. On top of this, the embargo imposed on European countries by Russia has also impacted on the agrifood trade.

A combination of factors has resulted in Teagasc and others predicting that we may see a sharp reduction in dairy prices in the coming months, for which, of course, we need to plan and prepare. It is fair to say most people anticipate this will be a temporary price reduction, but we still need to prepare for it. At national level, I have met all of the banks to discuss the issue. Some dairy farmers did take on significant debts in planning for expansion and we have always said such debts should be on the basis of the price being 28 cent a litre and no more than this. That said, of course, some will be put under pressure. Banks need to show flexibility and have stated they will do so because it is in their interests to ensure farmers stay in business. We are working with Teagasc at an advisory level in working with dairy farmers to get them through a difficult pricing period.

At European level, the European Commission can use three tools under the Common Agricultural Policy - aid to private storage, export refunds and intervention pricing. This week the Council of Ministers made it clear to the Commissioner who happens to be Irish, Mr. Hogan, that the Commission should be open to using these tools in full as a way of stabilising markets in the new year, if necessary. It has already shown a willingness-----

See this speech in context