Helen McEntee (Meath East, Fine Gael)
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30. To ask the Minister for Agriculture, Food and the Marine in view of the abolition of dairy quotas and the consequent market turbulence, as well as the significant borrowings undertaken by dairy farmers who share the Government’s ambition to increase Irish milk production in this new era for the sector, if he will update Dáil Éireann on his engagements with banks to ensure they afford credit flexibility to dairy farmers while the Irish dairy sector consolidates its expansion; and if he will make a statement on the matter. [34092/15]

Simon Coveney (Cork South Central, Fine Gael)
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The price of milk and dairy commodities is determined by supply and demand factors at international level . Food commodity markets including dairy markets have been characterised by significant levels of volatility for a number of years prior to the abolition of dairy quotas . F actors contributing to global price volatility in 2015 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 and Irish dairy farmers are well placed to take full advantage of rising global demand. The ending of EU milk quotas has not witnessed anything that could be described as a spike in production at EU level. Ireland has sought to avail of the opportunity that longer term trends will bring. I have maintained ongoing contact with the Irish banks and have impressed upon them at every opportunity of the need to show flexibility in their dealings with farmers experiencing temporary cash flow difficulties in 2015 and into 2016. Most recently at the dairy forum, I reiterated these calls to the three main banks in attendance. The Irish dairy sector is cost competitive and Teagasc figures indicate that Irish farmers have relatively low levels of indebtedness compared to counterparts in competition countries. The banks assured me that they will remain vigilant on this issue, particularly if prices continue to deteriorate into spring 2016 therefore and will be facilitative in the measures available and in their dealings with dairy farmers. They stressed the need for early engagement for those who see early signs of such liquidity imbalance.

The Government has also been proactive of course and chief among the initiatives here 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. The recent agreement at the council of Agriculture Ministers to increase the rate of single Farm Payment advance to 70% will also be of assistance from a cash plan perspective.

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.