Michael Creed (Cork North West, Fine Gael) | Oireachtas source

As a small open economy which exports the vast bulk of its main agricultural commodities, Ireland will always feel the effects of volatility on world markets. However, there are some measures in place to help Irish farmers through these periods. Indeed, one of my highest priorities under the programme for Government is to develop an effective response to price volatility, including through initiatives with regard to access to finance and taxation.

I believe that moving up the value chain where possible, in terms of the type of products sold and how they are produced, is an important insulation against volatility. The Food Wise strategy for the sector contains detailed recommendations aimed at improving value added and productivity at farm and food industry level through a focus on sustainability, efficiency, knowledge transfer and innovation. I will chair the next meeting of the Food Wise high-level implementation group next week, focusing on the important topics of market development and access to finance.

Direct payments estimated by Teagasc at an average of more than €17,000 per farm in 2015 provide a valuable source of farm income support and act as a hedge against price volatility.

With regard to farm borrowings, I will meet the CEOs of the main banks this month, all of whom, I know, are aware of price volatility issues. I will be pressing them for details on how they are handling current difficulties and their plans for the medium to longer term when liquidity difficulties may become more evident. Another important topic for discussion will be the cost of credit for lending to farmers.

My Department has also engaged actively with other financial institutions with regard to the development of innovative new lending products for the sector and is preparing to procure an ex anteevaluation for the introduction of financial instruments under the rural development programme. The Department will continue to engage with the Department of Finance on key agri-taxation policy objectives, including responses to income and price volatility.

At EU level, I have met Commissioner Hogan on several occasions recently and have proposed a plan of action to him for an EU response to the current market difficulties, including increasing the percentage of the €1.2 billion in Irish direct payments that can be paid in advance; the introduction of a targeted aid package similar to that provided last September; the removal of customs tariffs and anti-dumping duties on the importation of fertilisers, which issue comes within the remit of the trade Commissioner, Mr. Moscovici; a substantial increase in the volume limit for fixed price intervention for skimmed milk powder, which the Commission has now agreed; and the renewal of efforts to resolve the veterinary issues that have blocked exports to Russia. I intend to remain in close contact with Commissioner Hogan on these proposals over the coming weeks.

I also plan to chair an early meeting of the dairy forum to progress a number of specific initiatives in that sector.

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