Martin Ferris (Kerry North-West Limerick, Sinn Fein)
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17. To ask the Minister for Agriculture, Food and the Marine his views on concerns regarding the decline in profitability in the dairy sector; the European Union's refusal to increase intervention prices; and the action he proposes to take on this matter. [34216/15]

Simon Coveney (Cork South Central, Fine Gael)
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Having witnessed dairy market developments affecting milk and dairy commodity prices in Ireland and the EU, I presented a paper offering possible solutions to both the EU Commissioner and my EU ministerial colleagues in early September. 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. Whilst welcoming the steps previously taken by the Commission, including extensions to the dates for Aids to Private Storage and Intervention, I noted that having regard to the acute downturn in global milk prices over the past several months, and the severe impact this is having on farm incomes, that a number of further steps were urgently required including:

i. Utilising the provisions of Article 219 of the CMO Regulation to temporarily increase the threshold prices, with particular reference to skimmed milk powder.

ii. Restoring the scheme providing Aids to Private Storage for cheese which was introduced by the Commission in September 2014 but discontinued shortly after. In addition I called for the existing aid rates in the PSA schemes for butter and SMP to be reviewed immediately.

iii. Increasing the EU budget for market supports in light of the fact that the assigned revenues deriving from super levies will be some €400 million higher than originally foreseen in the draft budget for 2016.

iv. Using exceptional promotion measures to promote the consumption of dairy products on EU, but especially on 3rd country markets.

v. Increasing the advance of the Basic Payment and other elements of Direct Payments Scheme to 70%, to alleviate cash flow difficulties.

vi. I also called for the reopening of the scheme on Private Storage for Pigmeat which was closed in May of this year.

In the longer term, 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, further consideration of the role that might be played by futures markets, and the use of financial instruments specifically designed to take account of the cash flow impact of downward price cycles in commodity markets.

I am pleased to note that the final decision at Council on the aid package, including the 100% increase in the case of the PSA scheme for SMP, took account of Ireland’s six point plan.. Unfortunately a temporary top-up in the intervention price for SMP did not enjoy the support of all Ministers or the Commission. However 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 can go some way towards alleviating the worst effects of the current market downturn.

Provision of targeted aid is also a significant initiative. In order to address the existing market disturbance efficiently and effectively and to prevent the situation resulting from that disturbance, or its effect on the market, from continuing or deteriorating further, the Commission deemed it appropriate to provide grant aid to Member States in the form of a one-time financial grant. The aim of this is to support farmers in the relevant sectors who are experiencing the most acute price fall and consequences of the prolongation of the Russian import ban.

Taking these factors into account, Ireland has been granted an allocation of €13.7 million from an overall fund of €420M. I am consulting with stakeholders at present and will make a decision on the use of this aid in the very near future.