Dáil debates

Thursday, 26 November 2009

4:00 pm

Photo of John CreganJohn Cregan (Limerick West, Fianna Fail)
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Question 6: To ask the Minister for Agriculture, Fisheries and Food the role he envisages for the dairy consultative group which he has recently established; and if he will make a statement on the matter. [43439/09]

Photo of Brendan SmithBrendan Smith (Minister, Department of Agriculture, Fisheries and Food; Cavan-Monaghan, Fianna Fail)
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Last month I announced my intention to establish a consultative group to advise me on medium and long-term measures for the dairy sector. I did this following the special Council of Ministers meeting on 5 October, where we had a thorough discussion on the need for measures to manage the dairy market in the period up to and beyond quota abolition in 2015. At that meeting it was agreed to set up a high level group of member states, chaired by the EU Commission's Agriculture Director General, to examine the type of arrangements to be put in place.

The Commission high level group will examine medium-term and long-term ways of stabilising dairy farmers' incomes and improving market transparency. The group is tasked with delivering a comprehensive report by June 2010, and it is due to meet about eight further times before then, having already met twice. It will examine means through which contractual arrangements in the supply chain can contribute to the highest possible returns for producers. This would give them more bargaining power in the process and provide a buffer against extremes of market volatility such as those that are being experienced at present. The group will also examine existing market instruments and consider what other means, including a dairy futures market, could contribute to the objective of price stability in the longer term.

I decided to establish a consultative group so I could hear the views of the experts here on issues emerging at the high level group. In particular, the ideas, knowledge and expert opinion of the Irish dairy sector will provide key perspectives on how the sector needs to be developed and supported into the future. The consultative group is representative of the broad dairy sector in Ireland and all the main stakeholder organisations are participating in it.

The first meeting of the consultative group took place on 2 November and was chaired by the Secretary General of the Department. I intend the group to meet regularly and it will follow the progress of the Commission high level group, and I look forward to receiving constructive input from them.

While in the short term we are seeing some signs of an improvement in dairy markets, the work of the group will help us to prepare the dairy sector for the medium term. It is important to remember that the medium-term prospects for global dairy markets are good. The expected growth in wealth and increased population is forecast to stimulate strong levels of demand for dairy products and returns will improve to all parts of the sector. The Government is committed to ensuring the Irish dairy sector reaches its full potential. One of the major challenges in the medium term will be to ensure that Irish farming and the agri-food sector is at the heart of an evolving high-value food market, which is focused on quality and innovation. This is at the core of Government strategy which sets out a series of actions to develop a competitive, innovative and consumer focused agri-food sector.

Photo of John CreganJohn Cregan (Limerick West, Fianna Fail)
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I welcome the setting up of the high level group at European level. I compliment the Minister, who along with his colleagues in the other member states, persisted in that regard. It is important this group will examine dairy markets, which, to say the least, are experiencing difficulties, and by extension the issue of the price of milk, which is at its lowest in many years, also needs to be addressed.

I further welcome the setting up by the Minister of the dairy consultative group. He might elaborate on its membership, work and the issues that will come into play in it trying to reach solutions.

Photo of Brendan SmithBrendan Smith (Minister, Department of Agriculture, Fisheries and Food; Cavan-Monaghan, Fianna Fail)
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I thank Deputy Cregan for his particular interest in this matter. He has raised the difficulties affecting the dairy sector during the course of this year. It is an issue that has been discussed in this House on many occasions.

On his question on the composition of the group, it comprises mainly different farm organisations, the IFA, the ICMSA, the ICSA, Macra na Feirme, the Irish Co-operative Organisation Society, the Irish Dairy Industries Association and the Irish Dairy Board, Teagasc and some other specialists. All the relevant stakeholders are participating in this group. We have spoken on different occasions about the many challenges and difficulties facing the dairy sector. One of the issues is the area of volatility which needs to be addressed. We had high prices during 2007 but suddenly towards the end of 2008 and during the course of this year there was a huge drop in prices and prices fell below the cost of production. This has caused serious income difficulties for many farmers in Ireland, about whom we are concerned, but also for farmers throughout Europe. During this year there were more Council of Ministers meetings and meetings of particular groups of Ministers.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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A number of Deputies have questions on this matter.

Photo of Brendan SmithBrendan Smith (Minister, Department of Agriculture, Fisheries and Food; Cavan-Monaghan, Fianna Fail)
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Yes. Deputy Cregan also asked about the high level group. The purpose of establishing the high level group was to deal with the issue of ensuring that we have in place in Europe a means to stabilise dairy farmers' incomes and to improve market transparency. It comes back to the issue of the growing power of the multiples and the deficiencies in the food chain.

Photo of Seán SherlockSeán Sherlock (Cork East, Labour)
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I posed this question on the last occasion the Minister answered questions and I got the exact same answer as he has imparted to Deputy Cregan. I note he said that a meeting took place on 2 November. What was the outcome of that meeting? Will the stakeholder group, the consultative group, engage in a reporting procedure to the Joint Committee on Agriculture, Fisheries and Food in order that we can be in a position to monitor the nature of deliberations therein?

Photo of Brendan SmithBrendan Smith (Minister, Department of Agriculture, Fisheries and Food; Cavan-Monaghan, Fianna Fail)
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As Deputy Sherlock is aware we have engaged in conversation both in the House and outside in respect of the work of this group. Our dairy consultative group will run in parallel with the work of the high level group. It is our intention to keep the consultative group fully informed of the issues under discussion at the high level group in the European Union in advance of the discussions in Europe and subsequently. We seek an input from all stakeholders and welcome an input from the Oireachtas as well. Perhaps the Joint Oireachtas Committee on Agriculture, Fisheries and Food is the proper vehicle or forum.

Significant issues remain in respect of the dairy industry. The abolition of quota will take place in 2015 and adequate market support measures must be put in place. Market mechanism measures have been helpful this year but we would prefer if they were more effective. We must try to eliminate the volatility that has existed up to now.

Photo of Seán SherlockSeán Sherlock (Cork East, Labour)
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We are aware of the importance of the abolition of quotas. This is why we have called for consultation and an act of participation. It is important that the Joint Committee on Agriculture, Fisheries and Food would feed into that process in some way. It is also important that we are notified of the ongoing nature of the consultations. Did the Minster invite Teagasc to the last meeting? Is the scientific community involved in this process as an active participant? When I put the question in October, I was informed it would be invited.

Photo of Brendan SmithBrendan Smith (Minister, Department of Agriculture, Fisheries and Food; Cavan-Monaghan, Fianna Fail)
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Teagasc will participate. I do not know whether its representatives were present at the last meeting but I presume they were and I will clarify that for the Deputy. We want all relevant stakeholders to participate. We would be pleased to keep the Joint Committee on Agriculture, Fisheries and Food fully briefed and informed and we welcome its input.

A large number of issues must be dealt with by the high level group and by our consultative group in respect of the contractual relationship between producers and processors to strengthen the bargaining power of producers, transparency for producers, the industry and consumers, information on markets and innovation on research because things will change and evolve. This is a major area and one in which we encourage all stakeholders to be involved who are prepared to come along willingly and participate actively and constructively.