Brendan Griffin (Kerry South, Fine Gael)
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To ask the Minister for Agriculture, Food and the Marine the contingencies in place after milk quotas are abolished in 2015. [50443/12]

Simon Coveney (Cork South Central, Fine Gael)
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Ireland strongly supported the decision to abolish milk quotas with effect from 1st April 2015 on the basis that quotas were widely regarded by both the Irish dairy sector and market analysts as a brake on the potential of the sector to respond positively to market opportunities. I expect the abolition of quotas to facilitate an expansion in the sector and through the Food Harvest 2020 Report the industry has set itself an ambitious target for a 50% increase in milk production by 2020. For my part I have been working on a number of fronts to prepare the industry for the move to a quota free environment.

More than 85% of Irish dairy production is exported, and the price of milk in Ireland is ultimately determined by global demand and supply. In that regard I have been endeavouring to raise the profile of the Irish dairy sector in third country markets, for example through trade visits to the US and China, and also through ongoing engagement with potential purchasers of Irish dairy products, at both political and official level.

A key element of this market strategy is to optimise the already positive green image of Ireland in order to create a point of differentiation for Irish dairy products on international markets. In this context, stakeholders are at present engaged, through Bord Bia, in technical discussions to establish a dairy sustainability and quality scheme, while at processing level, Bord Bia’s Origin Green Programme is providing a vehicle for industry to commit itself to sustainability targets by reducing energy inputs, minimising overall carbon footprint and mitigating the impact on the environment. This pro-active approach to environmental sustainability has a strong resonance with procurement strategists in the many multi-national food companies who are interested in using Ireland as a source of high quality food ingredients and processed products.

Of course the industry itself has a responsibility to focus its efforts on market and product development. Supported by Government, the Irish dairy sector has succeeded in positioning itself as a major international player, and in recent months we have seen industry announcements in relation to the development of supply arrangements between Irish companies and multi-national players in third countries, and the development of value added products which can maximise the value of our dairy output.

At farm level my Department, in conjunction with Teagasc, has been working, through research activities and through the Dairy Efficiency Programme, to develop the skills and knowledge necessary to reduce costs on farm and improve efficiency, in order to better equip farmers to deal with volatility in dairy markets. In this context I am confident that following quota abolition, co-ops and their members will develop the kind of robust contractual arrangements which will secure supply into the future.

Underpinning all of this, I will continue to negotiate strongly to ensure that the post 2013 CAP continues to provide effective support for Irish farmers and that a market supports will remain in place to provide an adequate safety net to protect against the worst extremes of price volatility.

Taking all this into account, I am confident that the collaborative efforts of Government, the processing industry and the producers will ensure a thriving and sustainable dairy sector that can use the opportunity afforded by the abolition of quotas to fully leverage the natural advantage of Ireland’s grass-based production system.