Mary Upton (Dublin South Central, Labour)
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Question 150: To ask the Minister for Agriculture, Fisheries and Food his views on the high level group on dairying; and his further views on whether a voluntary contract will stabilise milk prices. [3890/10]

Niall Collins (Limerick West, Fianna Fail)
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Question 169: To ask the Minister for Agriculture, Fisheries and Food the progress made by the high level group of representatives of EU member states, established to review the dairy sector; and if he will make a statement on the matter. [3695/10]

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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I propose to take Questions Nos. 150 and 169 together.

The EU Commission set up the high level expert group on milk last October, following a special Council of Ministers meeting where we had a thorough discussion on the need for measures to manage the dairy market in the period up to and beyond quota abolition in 2015. The group is being chaired by the Commission's Director General of Agriculture, and is examining the type of arrangements that might be put in place. I welcome its establishment.

More specifically, the group will examine medium term and long term ways of stabilising dairy farmers' incomes and improving market transparency and it has been tasked with delivering a comprehensive report by June 2010. It will examine means through which contractual arrangements in the supply chain can contribute to the highest possible returns for producers. This would give them more bargaining power in the process and provide a buffer against extremes of market volatility such as those that are being experienced at present. The group will also examine existing market instruments and consider what other means, including a dairy futures market, could contribute to the objective of price stability in the longer term.

The work programme of the high level group has been divided into four discussion blocks. Block 1 deals with contractual relations, the bargaining power of producers and price transparency taking into account the experience of systems in place outside the EU. Block 2 examines the appropriateness of existing market instruments and the possibility of a futures market for dairy, again in the context of experiences in third countries. Block 3 covers information on markets and products (quality, health and labelling issues). Block 4 deals with innovation and research with a view to improving competitiveness.

There have been four meetings to date out of a total of about ten planned and these have focused on the block 1 issues. In addition to exchanges of views between member states, the group has heard presentations from representative organisations for producers, processors, distributors, retailers and consumers. It has also had exchanges with leading academics and with representatives from DG Competition and national competition authorities. In the last meeting the group heard presentations from four non-EU countries outlining their experiences of dairy market systems.

With regard to contractual relations, all member states are agreed on the benefits of contracts between producers and processors to underpin stability and certainty. However, there are marked differences between member states on the level of intervention required by the EU. Ireland, along with others, can accept a legal framework of guidelines at EU level but only if it is voluntary and flexible.