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

Before I speak about agriculture, I wish to express my solidarity and my revulsion at what has unfolded in Brussels today. It has been reported that up to 34 people, maybe more, have lost their lives in a metro station and at the airport there. From our point of view, today is about solidarity. Ireland and Europe collectively need to find ways to respond to try to guarantee the security of our citizens and prevent the kinds of atrocities that we have seen in multiple European cities at different times in recent years, the latest being in Brussels. These issues are not easy to address. I believe the House should and will spend many hours debating broader security issues and the consequences of deep conflict in different parts of the world now impacting on security within the European Union. The solutions are incredibly complex. They require collaboration, partnership and support within the European Union and further afield. Undoubtedly, there are links between the extremism, conflict and division in other parts of the world and what is happening now in the European Union. Today is a day for solidarity, sympathy and support for a city that most of us know well. Certainly, I know it well, having lived there. Indeed, more than 10,000 Irish people live and work in Brussels. I hope none of them has been directly affected by this but I imagine many of them will know people who have been. It puts many of the other issues we are discussing today into a sobering context and light.

I am glad to have the opportunity to update the Dáil on discussions that took place last week at the AGRIFISH Council of Ministers in Brussels. Proceedings were dominated by the debate on the continuing difficulties being experienced in dairy and pigmeat markets. My opening remarks will concentrate on these issues, but I will also give the House a brief synopsis of some of the other things discussed.

I welcome the new Members, several of whom have a great deal of experience with agricultural issues. That is welcome and I look forward to the debates we will have in future in respect of agricultural issues, regardless of which side of the House we are on.

Agricultural markets, in particular the dairy and pigmeat markets, have been under sustained pressure for a considerable period due to factors such as the slowdown in the Chinese economy, the Russian ban on EU food imports, increased EU and global production, low oil prices and especially sustained low grain prices during the past four years. Although price volatility has been a feature of commodity markets for some years, the latest downward pressure on prices has continued for a longer period than expected and has caused real difficulties for producers in Ireland and throughout the European Union.

Member states and the Commission have been monitoring the situation closely since difficulties first started to emerge. The emergency meeting of the AGRIFISH Council in September led to agreement on a €500 million package of measures designed to help farmers to overcome the crisis. This came on top of measures that had already been in place in response to the Russian ban and included a targeted aid fund of €420 million allocated to member states in national envelopes, with the option of a 100% top-up using national funds, an enhanced private storage aid scheme for skimmed milk powder, a further private storage aid scheme for cheese, increased rates of advanced payments under the direct payment scheme and rural development programmes and increased funds for food promotion programmes. It was also agreed that efforts to tackle non-trade barriers in third countries should be intensified. Efforts to further develop third country markets should also have been intensified. The monitoring of the dairy market should be and has been strengthened. A task force on agricultural markets should be established.

Ireland's share of the targeted aid fund came to €13.7 million and in December I announced my intention to match this EU fund with a further €13.7 million in Exchequer financing. This allowed me to allocate a total of €26.4 million to dairy farmers in the form of flat payments of just under €1,400 per farmer, a top-up for young farmers and a further €1 million in flat rate payments to pig farmers.

Other member states have also been implementing the September package, to varying degrees, in recent months. However, the continuing difficulties and the general pessimistic outlook for the rest of 2016 prompted a further discussion of the situation at the AGRIFISH Council in February. Member states were asked by the Commission to submit proposals for consideration and these were discussed at our meeting last week. We also had a dairy forum meeting to make sure there was a broad input into the package of measures we would put to the Commission.

The Council's discussion was generally very constructive, helped in large part by the Presidency's distillation of the many suggestions received by member states into a coherent overall presentation and by the willingness of the Commissioner, Mr. Phil Hogan, to respond positively by coming forward with concrete proposals. For my part, I fully shared my colleague's concerns about the way the market situation had developed. I agreed that, despite the range of measures put in place under the September package, the price pressures being endured by dairy and pigmeat producers had not abated and that it had also become clear that the global downturn in commodity prices would be more prolonged than originally anticipated. However, I also emphasised that markets were affected by many factors at any given time and that the ones I mentioned, which are influencing the situation, were temporary in nature. We need to ensure the demographic and other demand factors that underpin agrifood markets in the medium and long term will remain fundamentally sound. We also have to bear in mind that farmers and processors need policy certainty and stability. It is, therefore, critically important to avoid doing anything that would undermine confidence in the policy framework. It is also critically important to avoid any action that would distort the Single Market, particularly from an Irish perspective. While, of course, we need to deal urgently and effectively with this temporary problem and ensure Irish and EU farmers will be protected from the worst impacts of the fall in prices in the short term, we must also ensure they will be remain well placed to avail of emerging opportunities when markets recover, as they will.

I was broadly happy with the conclusions of the Presidency following the Council meeting which addressed most of the demands set out in the ten-point plan Ireland had presented to the Commission. They acknowledged the depth and duration of the crisis and called on the Commission to take a number of initiatives, including the activation of all available and appropriate measures and the doubling of the intervention ceilings for skimmed milk powder and butter to 218,000 tonnes and 100,000 tonnes, respectively, and to consider further support for the pigmeat sector through a new private storage scheme and greater flexibility in the implementation of the enhanced private storage scheme for skimmed powder in order that it would be more attractive to operators. We will reduce the length of time required to keep skimmed milk powder in storage in order to avail of the advanced storage aid package that will cover the full cost. Previously, producers were required to hold onto it for a full 12 months and would have been subject to penalties if they had brought product back into the market before then. Ireland also called on the Commission to consider further flexibilities in the operation of the state aid regime.

I have also called on the Commission to further consider the temporary suspension of EU import tariffs on fertilisers in order to reduce import costs for farmers in Ireland and the rest of the European Union. The idea that we are charging a tariff on fertilisers imported into the European Union and, therefore, increasing prices when farmers are operating within very tight margins, if there are margins at all, is totally unacceptable. The Commissioner supports that position, but other Commissioners are involved in the decision.

The conclusions also provide for a temporary facility, allowing producer organisations, inter-branch organisations and co-ops in the dairy and pigmeat sectors to control supply among their members on a voluntary basis, in response to very strong lobbying on the issue from France and other member states. In the lead-up to the Council I expressed my total opposition to supply controls and last week reiterated Ireland's view that constraining EU production would amount to a free gift to our global competitors, as well as slowing recovery in the European Union when markets improved. I also voiced our opposition to the allocation of any new EU funding to incentivise such reductions. These arguments found favour with many of my colleagues around the Council table.

While I remain concerned about the inclusion of supply control provisions in the Presidency conclusions, the measures are voluntary and limited and actions taken by producer organisations and other first purchasers of milk are of a temporary nature. They do not and will not constitute a return to quotas. It is very important that we emphasise that point, something we made very clear at the Council and which was confirmed in its conclusions. We are responding using all of the tools available to us.

Others have sought an increase in the intervention price. The Commission is fundamentally opposed to this because it would encourage some countries to produce more milk, which is not what it wants. However, on balance, the actions taken to date constitute a reasonable response. We need to keep the issue under review and will return to it again at the June Council.

See this speech in context