Brendan Smith (Cavan-Monaghan, Fianna Fail)
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I welcome the discussion on the dairy market situation that took place at the recent European Council. This issue is of concern across the EU and it was encouraging that so many government leaders engaged with it. Following the discussion the Commission was invited to present an in-depth market analysis within the next two months. This report should include possible options for stabilising the dairy market, while respecting the outcome of the Health Check.

It is important that the outcome of the Health Check agreement of last November is to be respected. From a dairy sector perspective the Health Check had two key elements, supply control and market support. The agreement essentially provided the framework for the EU milk quota regime leading up to its abolition in 2015. There was a wide divergence of views among Member States in the months leading up the final negotiations as to the best course of action in relation to milk quotas. Commissioner Fischer Boel had made it clear that she would not be proposing the continuation of the quota regime beyond 2015. The question was whether, and to what extent, milk quotas should be increased in order to prepare for their abolition.

Many of our colleagues argued in favour of annual quota increases of up to five per cent, while others were opposed to any increase. I adopted an ambitious approach that would facilitate the maximum possible fulfilment of the production potential in the Irish dairy herd. In that context I believe the decision to increase quotas by 1% each year from 2009 to 2014 was a good outcome. So also was the downward adjustment in the butterfat co-efficient that equates to a further potential 2% rise in quotas in 2009.

The other key dairy element in the Health Check was market support. In the negotiations I strongly defended the view that quota increases must be matched with effective dairy market management measures. The transition to a post-quota EU dairy market, along with current market fluctuations, makes this particularly important. I therefore called for the continuation of such measures and above all those schemes which are especially important for Ireland.

My position on these points has been fully vindicated and I will continue to press the Commission in order to ensure that the whole range of market management measures is implemented to full effect.