Written answers

Wednesday, 20 May 2009

Department of Agriculture and Food

Dairy Sector

Photo of Kathleen LynchKathleen Lynch (Cork North Central, Labour)
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Question 88: To ask the Minister for Agriculture, Fisheries and Food the measures he is seeking from the EU Commission to support milk price; the price these supports will deliver; and if he will make a statement on the matter. [20174/09]

Photo of Seymour CrawfordSeymour Crawford (Cavan-Monaghan, Fine Gael)
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Question 93: To ask the Minister for Agriculture, Fisheries and Food the position regarding his representations in Brussels and elsewhere to improve the support mechanisms for the dairy sector; his views on whether at this stage the most important issue is income and particularly the support towards the price of milk rather than additional quota; and if he will make a statement on the matter. [19987/09]

Photo of Niall CollinsNiall Collins (Limerick West, Fianna Fail)
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Question 94: To ask the Minister for Agriculture, Fisheries and Food the outcome of the recent Council of Agriculture Ministers in relation to low dairy prices; and if he will make a statement on the matter. [20314/09]

Photo of Brian O'SheaBrian O'Shea (Waterford, Labour)
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Question 102: To ask the Minister for Agriculture, Fisheries and Food the action he has taken to persuade the EU Commission that it needs to postpone the end of the butter APS scheme to late September 2009 and that it must handle the disposal of intervention stocks sensitively, so as not to dampen dairy markets once they start recovering; and if he will make a statement on the matter. [20178/09]

Photo of John CreganJohn Cregan (Limerick West, Fianna Fail)
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Question 115: To ask the Minister for Agriculture, Fisheries and Food if he will continue to press the EU Commission to provide additional supports, through market measures, to assist the dairy sector here; and if he will make a statement on the matter. [20322/09]

Photo of Brian O'SheaBrian O'Shea (Waterford, Labour)
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Question 117: To ask the Minister for Agriculture, Fisheries and Food the action he has undertaken to secure support from fellow EU Agriculture Ministers on critical issues for dairy markets, such as the re-introduction of processing aids and the continuation and increase of export refunds to help commodity prices lift above intervention equivalent levels; and if he will make a statement on the matter. [20177/09]

Photo of Niall CollinsNiall Collins (Limerick West, Fianna Fail)
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Question 126: To ask the Minister for Agriculture, Fisheries and Food the engagements he has had at EU level in relation to the need to provide supports to the dairy sector here; and if he will make a statement on the matter. [20313/09]

Photo of Brendan SmithBrendan Smith (Cavan-Monaghan, Fianna Fail)
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I propose to take Questions Nos. 88, 93, 94, 102, 115, 117 and 126 together.

Dairy farmers incomes are made up of the market price paid for milk and direct income support from the EU. Market forces of supply and demand have a major influence on the price paid for milk. World market prices determine the returns received by dairy processors and this is reflected in the price paid to farmers. In an open market it is not my role to predict or guarantee a minimum price for milk. However, the EU Common Agriculture Policy provides a range of measures that can be used to assist the dairy market. In the Health Check negotiations last year there was pressure to remove or weaken these considerably. At the time I fought hard to keep the key market instruments in place and these are now being used to help support the market. The Health Check also granted additional quota to all Member States, but that has no bearing on the current situation. Indeed, milk production in the EU is below the level it was before the quota increase in 2008 took effect.

In the EU, export refunds and internal subsidies had been suspended since 2007 as prices were at record high levels. As the market situation deteriorated towards the end of 2008 I called on the Commissioner to reintroduce support measures in order to help stabilise the dairy market. The Commission initially responded last November by bringing forward the operation of the private storage scheme for butter. In January the Commissioner announced the reintroduction of refunds for export of dairy products outside the EU. This was an important step and signalled an intention by the Commission to put a floor under the market. In March the intervention schemes for butter and skimmed milk powder were opened which allowed the purchase of product up to set limits at a fixed price. Around that time I met with the Commissioner to discuss the market situation and stressed the importance of continuing to accept butter and SMP into intervention at effective levels. I am pleased that the Commission has continued to buy butter and SMP into intervention at prices close to the fixed price under the tendering system. I also called for the continued use of export refunds at viable levels to move significant quantities of product from the EU.

At the Council of Agriculture Ministers in April I raised this issue again with my colleagues. I drew attention to the serious difficulties on the milk market where the severe slump in demand has led to a dramatic fall in milk prices. I urged the Commission to continue using the existing measures to support the market and to consider introducing additional methods where appropriate. I received considerable support from my fellow ministers and I will draw on that in the coming weeks. Milk will feature again on the agenda of the Agriculture Council and I will once again reiterate my views to the Commission and the Council.

The EU Commission's actions in utilising available support measures have helped to stabilise the market. However, as the milk price is greatly influenced by market forces of supply and demand, support schemes have a limited effect on milk prices. It is also important that the issue of disposal of EU intervention stocks is managed carefully. I will be taking this matter up with the Commissioner at the appropriate time. The short term outlook for the dairy sector remains uncertain and I will continue to monitor closely the Commission's management of the dairy market.

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