Bernard Durkan (Kildare North, Fine Gael)
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Question 235: To ask the Minister for Agriculture, Food and the Marine the extent to which he expects prospects and opportunities for the dairy sector here to expand over the next five years; and if he will make a statement on the matter. [40048/11]

Simon Coveney (Cork South Central, Fine Gael)
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I believe that prospects and opportunities for the dairy sector will expand significantly over the next five years and beyond. Dairy markets have recovered fully from the 2009 price collapse, with EU and World Markets performing strongly this year, and the short term outlook remains positive. This market buoyancy is good for Ireland, as we export over 80% of our dairy production. Last year exports of Irish dairy products and ingredients were valued at some €2.3 billion, an increase of 17% from 2009.

The effect of this recovery can be seen in the average milk price paid to Irish producers. In 2010 this was over 30 cent per litre, well above the 2009 average of 24 cent. This year farmers are currently receiving 34 cent per litre for their milk.

In recent years the dairy sector has experienced extreme volatility in product prices, primarily caused by an imbalance of supply and demand in international markets. While there will always be short term fluctuations in dairy prices, it is important to remember that the medium term prospects for global dairy markets are good. Growth in global population and wealth is forecast to stimulate strong levels of demand for dairy products.

These positive medium-term forecasts are what the Food Harvest 2020 report seeks to exploit in setting out the strategic vision for the agri-food and fishing sector. From a dairying perspective, the ending of milk quotas in 2015 represents an exceptional opportunity to increase our milk output, and Food Harvest 2020 has targeted a 50% increase in milk production in the next decade. This target is ambitious but I also believe it is realistic, because the dairy sector has the capability to expand at producer and at processor level. I chair the High Level Implementation Committee, whose function is to direct and take whatever action is needed to successfully implement Food Harvest 2020. The Dairy Expansion Activation Group has got the implementation ball rolling in the dairy sector. It has produced a Road Map setting out 55 actions that are required to achieve the 50% increase in milk production. Dr. Sean Brady, who chaired the Group, is continuing to facilitate the process of implementation and to monitor progress. All of the stakeholders are being encouraged to discharge the responsibilities assigned to them, and the response will be monitored and reported on.

"Milestones for Success", the first annual progress report on the implementation of Food Harvest 2020, was published in July. More than 90% of the 215 initiatives have been commenced, and I am confident that the momentum generated by that good start will be carried forward.