Bernard Durkan (Kildare North, Fine Gael)
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95. To ask the Minister for Agriculture, Food and the Marine the extent to which he can reassure the dairy sector regarding its future prospects in the wake of the abolition of quotas; and if he will make a statement on the matter. [34849/15]

Simon Coveney (Cork South Central, Fine Gael)
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As the Deputy is aware, Ireland strongly supported the abolition of the milk quota regime, on the basis that quotas were widely regarded by all concerned as a brake on the potential of the Irish dairy sector to respond positively to market opportunities. The ending of milk quota regime represented an exceptional opportunity for the dairy industry to increase milk output and reach the 50% target set out in Food Harvest 2020. The abolition of milk quotas allows dairy farmers capitalise on the on farm improvements which they have engaged in over recent years, covering improved genetics, more compact calving patterns and better grassland management.

It is disappointing that milk prices have dropped so soon after the abolition of milk quotas, but it would be disingenuous of anybody to suggest that the reduction in world prices is as a direct result of the abolition of milk quotas. It is accepted by analysts that price volatility will be a feature of the world dairy markets and we are currently at the lower end of that volatility curve.

In recent times I have made a number of proposals to the Commission to deal with the current downturn in prices and I welcome the steps taken by it, including extensions to the dates for Aids to Private Storage and Intervention, and the improved PSA scheme for SMP, which will include longer periods for storage as well as the improved aid rates, the re introduction of PSA for cheese, the provision allowing 70% advance in the single farm payment, the provision of increased funding for promotion, and the provision of almost €14m in targeted direct aid for farmers.

In terms of market, the medium to long term forecast for global dairy prices remains very positive. I am confident that the building blocks are in place to allow the Irish dairy sector to be more competitive and take full advantage of the opportunity presented by expanding global population and demand.