John O'Donoghue (Kerry South, Fianna Fail)
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Question 503: To ask the Minister for Agriculture, Fisheries and Food his plans to address the problem highlighted by the 2009 national milk agency report which shows that since 1999 farmers' share of the retail milk price has fallen from 43% to 26% [37613/10]

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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Dairy farmers' incomes comprise the market price paid for milk and direct income support from the EU. There has of course been a significant increase in milk prices in 2010 compared to the previous year, and the outlook is very much more positive than it was this time last year. As Minister for Agriculture, Fisheries and Food, I am committed to developing a strong and vibrant dairy sector, and this is evidenced by the ambitious 50% production expansion target laid down in the Food Harvest 2020 Plan for the development of the agri food sector.

At EU level, I have and will continue to support the retention of a strong Common Agriculture Policy, including direct payments and the full array of market supports, and will continue to represent the interests of the Irish farm sector in the discussion s on CAP post 2013. The effective deployment of market supports in 2009, which I had argued strongly for, put a floor under the market and helped to reverse the downward trend in prices at that time.

It is also critically important, against the background of volatile international dairy markets, that farmers and others in the supply chain adopt best practice to improve efficiency, reduce costs and maximise returns. In this context my Department has provided €18 million over three years to support Dairy Discussion Groups, in order to increase the level of participation and ensure that farmer members have access to the latest scientific and technological data, coupled to practical operational advice, designed to reduce costs and increase margins.

On the question of retail prices, the Renewed Programme for Government contains a specific commitment to "implement a Code of Practice for doing business in the Grocery Goods sector to develop a fair trading relationship between retailers and their suppliers" and "to review progress of the Code and if necessary to put in place a mandatory code". The Government will give effect to this commitment by including a specific provision in the legislation, currently being prepared by my colleague the Minister for Enterprise, Trade and Innovation, to merge the National Consumer Agency and the Competition Authority, which will allow for the introduction of statutory Codes of Practice in areas such as the grocery goods sector. Minister O'Keeffe expects to publish this legislation early next year. In the interim period until the legislation is enacted, the possibility of agreeing a Voluntary Code, which would respect the interests of all parties, is being explored with all the relevant stakeholders.

The Government is strongly committed to ensuring that Ireland continues to have vibrant agri food and retail sectors, particularly given the importance of these sectors to the national economy. The Government considers it important, therefore, that there is balance and transparency in the relationship between the various players in the grocery goods sector. The introduction of a Code of Practice, as provided for in the Programme for Government, is intended to achieve such a balance taking into account the interests of all stakeholders in the grocery goods sector including the interests of the consumer.