Bernard Durkan (Kildare North, Fine Gael)
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Question 140: To ask the Minister for Agriculture and Food if she has satisfied herself regarding the future prospects of dairy, beef and sheep farmers here in the wake of the revised EU supports; and if she will make a statement on the matter. [2287/05]

Mary Coughlan (Donegal South West, Fianna Fail)
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The mid-term review of the Agenda 2000 agreement has changed the nature of EU support for dairying. Under the reformed CAP, market supports for dairy products are being reduced and direct payments to dairy farmers in the form of the dairy premium have been introduced. This new policy framework will demand a more market-oriented approach by the dairy sector as market supports are reduced over the next three years. In particular it will require a lessening of dependence on intervention and a renewed focus on competitiveness and increased efficiencies at all levels of the industry. The Prospectus report published in 2003 made very clear recommendations on the response required from the industry in adapting to the new policy environment.

I have revised the milk quota restructuring arrangements to make them more responsive to the more competitive circumstances facing dairy farmers in the years ahead. On a broader level I will be working with the industry as it adapts to the new policy framework. In the meantime I will continue to work with the Commission to emphasise the need for continued effective use of market management measures to ensure a smooth transition as the reform decisions are implemented. The new policy framework will allow the sector to continue its development in a sustainable manner.

The recent reform also means that farmers engaged in beef production, supported by the single farm payment, will enjoy greater freedom to grow and develop their enterprises producing for consumer requirements. A targeted approach, based on quality production, represents the best and most profitable way forward for the Irish beef industry the key to which are producer and processor relationships. In such a context it will be even more necessary to emphasise good breeding policies, payment related to quality, and integrated supply and purchasing systems. The market will be the sole determinant of the nature and scale of output from this sector.

In the last three years, the focus of the Irish beef industry has been to broaden and expand its market reach at EU retail level, shifting its orientation away from international commodity markets and into the higher priced internal EU marketplace. This has coincided with reduced dependence on EU support measures such as intervention and export refunds. An increased presence in this sophisticated, high value market is the key to the success of the beef industry in the long term.

Similarly, in the case of sheep, decoupling will bring sheep producers closer to the dynamics of the market and competitiveness will be key at producer and processor level in maintaining and growing market share. Irish lamb competes successfully against lamb from New Zealand and other countries on the highly competitive French market and there is no reason why it should not continue to command the loyalty of Irish lamb consumers on the home market.