Paul Gogarty (Dublin Mid West, Green Party)
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Question 141: To ask the Minister for Agriculture and Food the initiatives she proposes to take to safeguard what remains of the liquid milk dairy sector due to the fact that a decision has been taken to abolish the groceries order. [34227/05]

Mary Coughlan (Donegal South West, Fianna Fail)
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The biggest single competitive challenge to the liquid milk market here is the growing penetration of liquid milk imports from Northern Ireland through increased reliance on own brand sales by supermarkets and symbol groups. This type of trade is an integral part of commercial activity on the EU internal market. Increased productivity, improved scale and a more competitive configuration are the key to increasing output and improving the profitability of the dairy sector at farm and industry level. As regards the abolition of the groceries order, the Government has agreed to the introduction of amending legislation to strengthen certain provisions of the Competition Act which will be of benefit to the dairy sector.

Dan Neville (Limerick West, Fine Gael)
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Question 142: To ask the Minister for Agriculture and Food the discussions she has had at EU level to protect dairy supports; and if she will make a statement on the matter. [33766/05]

Dan Neville (Limerick West, Fine Gael)
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Question 144: To ask the Minister for Agriculture and Food the steps she intends to take to protect the dairy industry here; and if she will make a statement on the matter. [33765/05]

Mary Coughlan (Donegal South West, Fianna Fail)
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I propose to take Questions Nos. 142 and 144 together.

The Irish dairy industry continues to contribute very substantially to the national economy, with an output value of some €2.3 billion and exports of €1.86 billion last year. This year exports are again performing very well despite adjustments to market management supports brought about by the implementation of the Luxembourg agreement on the reform of the CAP.

The Commission market management policy has been too aggressive and I have consistently and resolutely challenged the Commission at every opportunity, including raising the matter at the Council of Ministers. In enlisting the support of many other member states for my point of view, I believe that the Commission policy has moderated in recent times, now having closer regard to the market implications of its actions rather than its previous emphasis on budgetary policy.

While acknowledging that some adjustment in market management measures is warranted if the Luxembourg agreement is to be implemented in full, my concern has been to ensure that the transition is implemented in a more measured way. Sustained downward pressure on market supports would effectively reduce our international competitiveness and put pressure on our ability to fully exploit opportunities to export milk products to international markets. A longer period in which to make the necessary adjustment will instead provide a more solid platform on which to build new market opportunities while consolidating our position in existing markets.

The stability prevailing in producer prices over recent times is welcome and the direct payment, amounting to €120 million this year, rising to €180 million next year, as compensation for the reduction in institutional support prices should result in a higher return for dairy farmers this year. In the meantime, I will continue to exert every possible pressure on the EU Commission to ensure that in its management of the EU dairy regime, we achieve a satisfactory outcome for the Irish dairy industry in terms of enhanced industry competitiveness and stable farm incomes into the future.