Brian O'Shea (Waterford, Labour)
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Question 43: To ask the Minister for Agriculture, Fisheries and Food the steps he will take to assist dairy farmers here, in the grip of the worst cash flow and income crisis in a generation, bearing in mind that many of their European counterparts have been helped by their Governments, with low or no-cost loans, excise reductions on fuel, or lower social security contributions, financed using the permission by the EU Commission to use the higher [i]de minimis[/i] state aids provision up to €15,000 per farmer over three years. [36217/09]

Charles Flanagan (Laois-Offaly, Fine Gael)
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Question 47: To ask the Minister for Agriculture, Fisheries and Food the initiatives he will introduce to bring about greater efficiency in the dairy sector; and if he will make a statement on the matter. [36274/09]

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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I propose to take Questions Nos. 42 and 47 together.

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.

In July I announced proposals for the spending of more than €200 million on new investment measures in Irish agriculture as part of a revised rural development programme. These included the allocation, from unspent single payment scheme funds, of €6 million per annum for the next three years to a scheme to encourage a significant improvement in efficiency on dairy farms. In addition, €45 million has been earmarked for an investment support scheme aimed at helping young dairy farmers to adjust to expanding dairy opportunities and make their commercial operations more cost-effective. Details of both of these schemes are currently being drawn up by my Department.

Over the past month there has been comprehensive discussion of the dairy sector at the Council of Ministers. Twenty ministers, including myself, have now signed a statement calling for an EU approach that would combine short term measures with a medium to long term strategy to deal with volatility in the milk sector. We met in Vienna earlier this week where we agreed on new measures to be implemented in the sector. Specifically, we will be asking the Commission to commit to an additional €300 million for the 2010 budget, without prejudice to other sectors.