David Stanton (Cork East, Fine Gael)
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Question 99: To ask the Minister for Agriculture and Food the communication she has had with the European Commission regarding current and future milk prices; the action she has taken or intends to take; and if she will make a statement on the matter. [17392/05]

Mary Coughlan (Donegal South West, Fianna Fail)
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I have made the EU Commissioner for Agriculture, Food and Rural Development fully aware of the impact that changes in market management supports and export refunds play in the overall development of the EU dairy industry and, in particular, their impact on the Irish dairy industry.

Milk price is determined by a number of factors including the international market for dairy products, the type of products being produced, their market destinations, the efficiency of production and processing and the overall operation of the EU support mechanisms.

On the particular issue of milk prices, this is in the first instance a business matter between milk producers and purchasers. Producer prices for milk in Ireland have remained stable for the past number of years despite reductions in intervention prices for butter and skim milk powder. These reductions in institutional support prices have resulted in farmers being compensated in 2004 to an amount of €60 million. Further compensation amounting to €120 million will be paid this year as part of the single farm payment introduced as a result of the Luxembourg agreement on the reform of the CAP.

On market supports generally I have been opposed to the general trend towards reduced support for market aids, including casein aid and export refunds. I have consistently argued in favour of operating market support policy at Community level with the aim of ensuring stability across the milk sector so that EU exports remain competitive on international markets. I will maintain pressure on the Commission at every level to ensure that the situation is kept under close review, that the market requirements are accurately assessed and that the policy response is dictated by the needs of the market situation.