Bernard Durkan (Kildare North, Fine Gael)
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112. To ask the Minister for Agriculture, Food and the Marine the extent to which he expects the dairy sector to be in a position to avail of benefits arising from the removal of milk quotas; and if he will make a statement on the matter. [19137/15]

Simon Coveney (Cork South Central, Fine Gael)
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The milk quota regime ended on March 31st. Planning for the post-quota period has been ongoing amongst all stakeholders for a number of years and I believe we have the right balance of measures in place to ensure that Irish dairy farmers can enter the new era with full confidence. With respect to the impending super levy, flexibility has been secured from the European Commission for farmers to pay the superlevy fine on a phased basis over 3 years. My Department is working on the details of a scheme to give effect to this flexibility at national level. This announcement will serve as a major boost to dairy farmers in helping to ease the cashflow burden of paying the superlevy bill.

Most market analysts predict that medium-term prospects for global dairy markets are good, with growth in world population and wealth expected to stimulate strong levels of demand for dairy products. My aim is to help position the Irish dairy sector to be able to take advantage of this opportunity. Price volatility is a challenge, and it is critically important that processors, farmers and the banking system work together to mitigate any negative impact.

Irish Dairy exports in 201 4 were valued at over €3bn and the dairy sector is by a number of measures the country’s largest indigenous industry. Due to its reputation and significant global footprint, the dairy sector in Ireland retains significant future growth potential. The removal of quotas will be a key driver in this respect. Ireland exported dairy products worth €2.3Bn in 2010 and by last year this had risen by over one-third to over €3bn. I remain acutely aware of the need to develop as many market outlets as possible for Irish dairy products.

Developing a unique selling point for Irish dairy produce is a critically important element of the national strategy for the development of the sector, particularly in the context of the need to maximise market returns for significantly increased production in competitive markets worldwide. It remains clearly evident from engagement with potential customers for Irish dairy products that the sustainability message has a strong resonance, and through the Origin Green Programme and the Dairy Quota Assurance Scheme we are building a brand image for Irish milk production based on our strong environmental credentials.

In the run up to quota abolition a number of estimates in respect of capital investment have been made by various stakeholders. Using data from Enterprise Ireland we can see that over the past 2 years some €729M has been invested in 36 dairy and Infant Milk Formula plants. This represents significant investment and whilst much of the information about specific plants is commercially sensitive, details regarding many of the larger investments are in the public domain.

There has been significant investment at farm level too. A joint study by Teagasc and Bank of Ireland presented in early 2015 showed that Dairy farmers invested almost €2 billion in the 2007 to 2013 period, with just under half of this investment in buildings, and almost €70 million in milk quota over the period. Teagasc estimates a requirement for further investment of €1.4 billion at farm level to meet the Food Harvest 2020 targets. A €4 billion Rural Development programme will help to bridge the infrastructural gap at farm level through targeted investments in equipment and facilities.

Issues pertaining to the ongoing development will be addressed, inter alia, in the 2025 report currently being drafted and the Deputy may also be aware that I recently announced the establishment of a forum to address the key issues arising in a post quota abolition environment and the expected expansion this will lead to in the dairy sector. I envisage that this group will comprise relevant stakeholders, including farm organisations, processors and co-operatives, State and semi-State bodies, banks, environmental and others. Such a forum is appropriate as a means of engagement on critical issues such as market developments, sustainability, animal health, milk quality and price volatility.

Taken together I believe the aforementioned reasons reflect the positive state of preparedness of the Irish dairy sector for the post quota era.