Tom Fleming (Kerry South, Independent)
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491. To ask the Minister for Agriculture, Food and the Marine his plans to introduce measures that will stabilise the market situation with regard to the drastic reduction in milk prices and ensure there are no further reductions in milk prices; and if he will make a statement on the matter. [30671/15]

Simon Coveney (Cork South Central, Fine Gael)
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The price of milk and dairy commodities are determined by supply and demand factors both domestically and at international level. These include the Russian Ban and the softening of Chinese demand on one side, coupled with increased production among key global producers on the supply side. The longer term perspectives remain very positive. Having witnessed dairy market developments affecting milk and dairy commodity prices in Ireland and the EU, I presented a six-point plan offering possible solutions to the Commissioner and my EU ministerial colleagues earlier this month. These were presented on the basis of my belief that they were appropriate for consideration by the Council and as a response to the market issues that had developed. This list was not exhaustive and I sought to reach common ground with other Ministers regarding a suite of appropriate solutions.

I am pleased to note that the final decision at Council on the aid package, including the 100% in the case of the PSA scheme for SMP, took account of significant elements in Ireland’s six point plan. I am satisfied that the improved PSA scheme for this product which will include longer periods for storage as well as the improved aid rates, can help stabilise this market. Other key elements of the Commission Aid proposal include an advance of 70% for next year’s Single Farm Payment which will assist with cash flow difficulties. I also welcome the almost €14 million in direct aid for Ireland, a new PSA scheme for cheese and an increase in funding for the promotion of dairy products. In conjunction with stakeholders, I will now consider how best to utilise these funds to support Irish farmers.

I also made it clear that from my perspective, it will be necessary to give consideration at EU level to responses to volatility issues in the future such as more price transparency through the EU’s Milk Market Observatory. I believe that further consideration needs to be given to the role that might be played by futures markets. The use of financial instruments specifically designed to take account of the cash flow impact of downward price cycles in commodity markets requires further examination also.

In addition to measures at EU level, I have also been proactive in other areas in terms of ensuring the right balance of measures are in place to ensure that Irish dairy farmers will remain confident for the future. Among the Government’s initiatives in this area are provisions allowing dairy and other farmers to use income averaging over five years when it comes to paying income tax bills. This also offers respite to the sector from a cash flow perspective. Furthermore, I have also ensured that priority has been given to measures for the dairy sector in the Rural Development Plan. In addition, I have impressed upon the Irish banks the need to show flexibility in their dealings with farmers experiencing temporary cash flow difficulties in 2015.

Finally I decided to make a 3 year interest free instalment arrangement available to all those affected by superlevy this year This option has been availed of by approximately 3,700 producers and will be of assistance to farmers facing cash flow difficulties arising from super levy in the final year of the milk quota regime.