Dan Neville (Limerick West, Fine Gael)
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Question 37: 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. [5609/06]

Dan Neville (Limerick West, Fine Gael)
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Question 73: 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. [5610/06]

Mary Coughlan (Donegal South West, Fianna Fail)
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I propose to take Questions Nos. 37 and 73 together.

The Irish dairy industry continues to contribute very substantially to the national economy, with an annual output value of some €2.3 billion. Last year Irish dairy exports performed exceptionally well totalling €1.82 billion, despite downward adjustments to market management supports brought about by the implementation of the Luxembourg agreement on the reform of the CAP.

World prices for both butter and skimmed milk powder in 2005 averaged 8% above 2004 levels and this solid market performance meant that usage of intervention was particularly low for both products. The casein market also performed very well with an average price increase of 25% over the previous year.

When the Commission moved aggressively to reduce internal aids and export subsidies to the new intervention price levels last year, which caused a high degree of volatility, I very strongly resisted and pressed the Commissioner at the Council of Ministers to redirect policy and restore market stability. With the support of other Ministers I succeeded in having the market for the remainder of 2005 stabilised and market competitiveness restored.

As we move towards the further agreed intervention price reductions next July I will continue to emphasise the need for stability in the market. I have frequently discussed this matter with the Commissioner bilaterally and she is fully aware of my view that market stability is essential to allow the dairy industry time to adjust to the current market realities and adapt its business strategies accordingly.