Dan Neville (Limerick West, Fine Gael)
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Question 68: 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. [12034/06]

Mary Coughlan (Donegal South West, Fianna Fail)
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The Irish dairy industry continues to contribute very substantially to the national economy, with an annual output value of €2.3 billion. Irish dairy exports performed exceptionally well in 2005 amounting to €1.82 billion. This is a very positive performance given the downward adjustments to market management supports brought about by the implementation of the Luxembourg agreement on the reform of the CAP.

Throughout 2005, the EU Commission moved aggressively to reduce internal aids and export subsidies to the new intervention price levels, which caused a high degree of volatility on the dairy market. I strongly resisted these moves and pressed the Commissioner at the Council of Ministers to redirect policy and restore market stability. With the support of other Ministers, the market for the remainder of 2005 stabilised and market competitiveness was restored.

I am firmly of the view that the market management measures cannot be used in a crude manner but must be deployed carefully and sensitively. Earlier this year I highlighted to the Commission the need to maintain the competitive position of EU butter on third country markets and I was very pleased to see increases in export refunds for butter. I have no doubt that the Irish dairy sector will take advantage of these positive developments.

As we move towards the further agreed intervention price reductions next July I will continue to emphasise the need for stability on the market. Indeed, 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 their business strategies accordingly.