Niall Collins (Limerick West, Fianna Fail)
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Question 52: To ask the Minister for Agriculture, Fisheries and Food the efforts he has made to secure EU supports for Irish milk producers; and if he will make a statement on the matter. [25947/09]

Tommy Broughan (Dublin North East, Labour)
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Question 53: To ask the Minister for Agriculture, Fisheries and Food if he continues to seek dairy price supports at EU level; the position in relation to same; the reason there has been no lift in dairy product prices; the price which is achievable based on the price supports he is seeking; and if he will make a statement on the matter. [26045/09]

Seymour Crawford (Cavan-Monaghan, Fine Gael)
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Question 79: To ask the Minister for Agriculture, Fisheries and Food the steps he has taken to prevent the collapse of dairy farming and consequently the dairy industry; his views on whether the price being paid for milk cannot and will not cover production costs; and if he will make a statement on the matter. [25845/09]

Jack Wall (Kildare South, Labour)
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Question 106: To ask the Minister for Agriculture, Fisheries and Food the steps that he has taken over the past six months to restore the dairy sector to a sound trading position; and if he will make a statement on the matter. [26056/09]

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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I propose to take Questions Nos. 52, 53, 79 and 106 together.

Over the past year or so we have witnessed extremes of volatility in dairy product prices on an unprecedented scale, a symptom of the changed EU policy framework in which we operate where world market forces have a major influence on the price paid for milk. Last November, when it became apparent that dairy commodity prices internationally were in decline, I contacted the EU Commissioner for Agriculture, Food and Fisheries, Mariann Fischer Boel, to press for the re-activation of dairy market supports. These had been suspended since 2006 because of the historically high milk prices that had prevailed in the intervening period.

The first step taken by the Commission, following my intervention, was to introduce the aid scheme for private storage of butter a full two months ahead of the normal date, ensuring that market support for butter was available in January instead of March. The scheme remains in place and has already supported the storage of some 96,000 tonnes of butter at EU level.

Public intervention for butter and skimmed milk powder opened in March. When the mandatory limits of butter and SMP to be purchased at the intervention price were reached, 30,000 tonnes and 109,000 tonnes respectively, I arranged a bilateral meeting in Brussels with the Commissioner. At that meeting I secured agreement for the continuation of these schemes under tendering arrangements that are close to intervention prices.

To date some 81,000 tonnes of butter have been bought into intervention, equal to 8 per cent of the butter production in January to June. As regards skimmed milk powder, 203,000 tonnes have been purchased into stock, equal to more than 38 per cent of the SMP production in January to June this year. In all, 20,000 tonnes of butter and 27,000 tonnes of skimmed milk powder from Ireland have been funded under these schemes at an approximate value of €60 million to Irish dairy processors.

Also re-introduced in January were export refunds for butter, cheese, skimmed milk powder and whole milk powder. So far this year, licences to export some 96,000 tonnes of butter and butteroil and 123,000 of SMP have been issued, which will enable these quantities to utilise export refunds for export outside the Community. Similarly, licences were issued in respect of cheese exports for 129,000 tonnes. The support value of this trade amounts to a further €113 million when these products are exported.

Taken together there has been a considerable commitment of EU funds to support the dairy sector. However, with the market continuing to show resistance, price returns to dairy farmers in Ireland are now at levels that threaten the very viability of many farm enterprises. I have explained in detail to the Commission, with regard to cheese exports, that it is difficult for many to understand why, in this current severe market downturn, we have a self-imposed technical impediment preventing the use of export refunds in support of cheese exports outside of the Community in the quantities demanded by the market. I have once again urged the Commissioner to remove the 'free at frontier price' for cheeses at the earliest opportunity.

I have also stressed the need to examine other steps that may assist in reversing the downturn and stimulating the market further. For example, intervention purchases of butter and skimmed milk powder will close at the end of August and the private storage scheme for butter will close shortly beforehand. The role that private storage and intervention plays is such that their continuation after the normal cessation dates will be crucial in preventing further market turbulence at a time when supplies would otherwise hit commercial markets. My view, which I have articulated at meetings of the Council of Ministers, is that the market situation warrants an exceptional response on this occasion.

Dairy farmers incomes are comprised of the market price paid for milk and direct income support from the EU. Market forces have a major influence on the price paid to farmers for milk. World market prices determine the returns received by dairy processors and these in turn are reflected in the price paid to farmers. In essence, farm gate prices normally reflect the returns from international markets of dairy product sales. As the milk price is greatly influenced by supply and demand market support schemes can only have a limited effect on prices. For a dairy producing country like Ireland, where we export the vast majority of our product, this new framework is particularly relevant. Ultimately the market is the source of income and to maximise income the focus has to be on competitiveness, efficiency and innovation.

It is important to emphasise that medium term prospects for global dairy markets are good. Growth in wealth and population is forecast to stimulate strong levels of demand for dairy products, and returns will improve commensurately. I have every confidence that the sector will recover from this current downturn and achieve its fair share of the annual growth in demand for dairy products predicted by the OECD and others.