Written answers

Thursday, 15 October 2009

Department of Agriculture and Food

Dairy Sector

Photo of Johnny BradyJohnny Brady (Meath West, Fianna Fail)
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Question 49: To ask the Minister for Agriculture, Fisheries and Food if he is satisfied with the level of support provided by the EU Commission in relation to the difficult market situation being faced by dairy producers; and if he will make a statement on the matter. [36059/09]

Photo of Ciarán LynchCiarán Lynch (Cork South Central, Labour)
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Question 53: To ask the Minister for Agriculture, Fisheries and Food the proposals he is putting at EU level to stabilise dairy markets; and the level to which he is proposing to increase the intervention price. [36211/09]

Photo of Niall CollinsNiall Collins (Limerick West, Fianna Fail)
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Question 86: To ask the Minister for Agriculture, Fisheries and Food the efforts he has made to secure EU supports for milk producers here; and if he will make a statement on the matter. [36056/09]

Photo of Brian O'SheaBrian O'Shea (Waterford, Labour)
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Question 92: To ask the Minister for Agriculture, Fisheries and Food the guarantees he has secured from the European Commission that intervention stocks of both butter and skimmed milk powder will be firmly held until milk prices have recovered well in excess of break even and only released very carefully and in a manner which ensures it will not disrupt markets. [36216/09]

Photo of Brendan SmithBrendan Smith (Cavan-Monaghan, Fianna Fail)
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I propose to take Questions Nos. 49, 53, 86 and 92 together.

The Common Agricultural Policy contains support measures to help us manage the market. During the Health Check negotiations last year I fought hard to keep the important measures in place. Since the start of the current crisis I have pressed the Commission to use all appropriate market instruments. Most of these supports have now been activated since the beginning of the year and have helped to stabilise the situation. Indeed, there are now early signs that dairy product prices are starting to recover.

Since the start of 2009 the Commission has reactivated a range of measure provided for in the CAP Health Check, beginning with the early operation of the private storage scheme for butter. Then, in January export refunds were reintroduced to support the export of dairy products outside the EU and these have been increased several times, most recently in June. In March, public intervention schemes for butter and skimmed milk powder were opened which allowed the purchase of product up to set limits at a fixed price. When the mandatory limits of 30,000 tonnes and 109,000 tonnes respectively were purchased at the intervention price the schemes were continued under tendering arrangements at close to the intervention prices. To date some 83,000 tonnes of butter and 282,000 tonnes of skimmed milk powder have been funded under these schemes. Also, 135,000 tonnes of butter has been aided under the private storage scheme, which was extended beyond the August closing date.

In early July the Council of Agriculture Ministers agreed to the use by the Commission of emergency provisions to allow it to extend the intervention periods for butter and skimmed milk powder for 2009 beyond the normal end-August closing dates to 28 February 2010, and to replicate this mechanism in August 2010 if necessary. The Commission has also removed the so-called "free at frontier" threshold price governing the export of cheese from the EU, which I had been pressing the Commissioner to review for some time in bilateral contacts and at meetings of the Council.

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. At a special Council meeting last week it was agreed to establish a High Level Group to examine the sort of measures that could be put in place. That group will report in June 2010, and I have decided to set up a consultative group to advise me on the medium and long term measures that will best position the Irish dairy sector for the future.

I also welcomed the commitment given by Commissioner Fischer Boel at last week's special Council to manage the release of stocks from Intervention in a prudent manner. We are seeing some tentative signs of an improvement in dairy markets, though a solid recovery is still uncertain and it is crucial that the disposal of stocks from intervention is handled in a sensitive manner and in a way that does not undermine the market at this critical time.

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