Tom Fleming (Kerry South, Independent)
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Question 1142: To ask the Minister for Agriculture, Food and the Marine his plans to develop the dairy sector here, increase exports and create new jobs; and if he will make a statement on the matter. [19147/12]

Simon Coveney (Cork South Central, Fine Gael)
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The Food Harvest 2020 report sets 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 milk output, and Food Harvest has targeted a 50% increase in milk production in the period to 2020. 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. In that context, the Dairy Expansion Activation Group established to identify specific actions needed to deliver on the Food Harvest targets, has produced a Road Map setting out 55 actions required to achieve the 50% increase in milk production. All of the stakeholders are being encouraged to discharge the responsibilities assigned to them, and the response will be monitored and reported on. Key areas for action include the identification of markets, the improvement of efficiency at processing level and improving production efficiency at farm level. While many of these actions will be taken at commercial level, my Department and its agencies are working with industry to provide a framework to support the necessary development, and I am personally chairing the High Level Implementation Committee, in order to monitor progress and take appropriate action to support the successful implementation of Food Harvest 2020.

Exports of dairy products in 2011 were valued at €2.66 billion, an increase of 17% on the previous year. Ireland already has access to markets worldwide and exports dairy products to over eighty countries. Nonetheless I am working with industry to raise the profile of the Irish dairy sector, and the Irish agri-food sector generally, in emerging markets in the Far East, North Africa and elsewhere. I have been very active in developing relationships in new and expanding markets in order to build the kind of confidence in Irish production and control systems that provide a platform for long-term trading relationships in the future. As part of that effort, I am at present leading a trade mission to China to further develop this important relationship, and to meet my ministerial counterparts in the Agriculture and Quarantine Ministries to help raise the profile of the Irish agri-food industry, including the dairy sector, in China.

At farm level, my Department provides €6 million per annum through the Dairy Efficiency Scheme to encourage the adoption of technology and best practice at farm level. This scheme will help to equip farmers with the knowledge and skills necessary to maximise their output, reduce their costs of production and increase margins. In addition, a Dairy Equipment Scheme to encourage capital investment at farm level is available under the TAMS (Targeted Agricultural Modernisation Scheme) to ensure farmers are equipped to gear up for expansion. The scheme provides grant aid for milking machines, cooling equipment and other ancillary items.

In addition, a number of incentives were introduced in this year's budget to encourage new farmers including a stock relief incentive for milk production partnerships, a stamp duty reduction on agricultural land and restructuring of retirement relief.

In addition Teagasc, which is funded by my Department, provides research, education and advice at both farm and processing level and is working closely with industry in the critically important product development area, while Bord Bia is working with operators in the sector on the development of an accredited sustainability model.

It should not be forgotten, that in recent years the dairy sector has experienced severe volatility in product prices, primarily caused by an imbalance of supply and demand in international markets. However, while there will always be short term fluctuations in dairy prices, 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. Against that background, I believe that prospects and opportunities for the dairy sector will expand significantly over the coming years and I can assure the Deputy that my Department and its agencies will continue to play their part in providing an appropriate framework to support the development of this critically important industry.