Dan Neville (Limerick West, Fine Gael)
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Question 109: 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. [23622/06]

Seymour Crawford (Cavan-Monaghan, Fine Gael)
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Question 143: To ask the Minister for Agriculture and Food the steps she is taking to maintain and improve the support for dairy farmers at Irish and European level; and if she will make a statement on the matter. [24584/06]

Mary Coughlan (Donegal South West, Fianna Fail)
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I propose to take Questions Nos. 109 and 143 together.

The Irish dairy industry continues to contribute very substantially to the national economy, with an annual output value of some €2.3 billion. In 2005 Irish dairy exports performed exceptionally well totalling €2 billion, despite downward adjustments to EU market supports brought about by the implementation of the Mid Term reform of the CAP.

A loss of competitiveness on world markets caused by greater competition and the fluctuating value of the US dollar have meant that 2006 is proving to be a more challenging year for the industry. The butter market, in particular, continues to experience serious difficulties. The Intervention limit of 50,000 tonnes of butter was reached at the end of May and a tendering regime for intervention purchases was opened. Under the tendering regime for intervention purchases, the EU Commission is pushing the internal market prices of butter downward to the new Mid Term Reform levels. On a more positive note, I very much welcome the Commission's decision to maintain the tendered export refund for butter and I hope this will facilitate the export of significant quantities of butter to international markets.

I remain concerned about the aggressive actions of the Commission in the past months to reduce internal aids and export subsidies to the new intervention price levels and I have regularly requested the Commissioner to redirect policy and support both the internal and international butter markets. The Commissioner 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.

At national level, I have already announced my intention to move to a more open market system of transferring milk quotas between producers with the ultimate aim of increasing the scale and long-term efficiency of dairy production in Ireland. Consultation is ongoing with the relevant stakeholders.