Niamh Smyth (Cavan-Monaghan, Fianna Fail)
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721. To ask the Minister for Agriculture, Food and the Marine if he expects farmers to keep producing milk below the cost of production; his plans to introduce a floor milk price margin; and if he will make a statement on the matter. [22174/16]

Michael Creed (Cork North West, Fine Gael)
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I am acutely conscious of the pressure farmers are under at present, and I can assure the Deputy that I am committed to exploring all of the appropriate options for providing assistance to the farm sector through current difficulties. However I have no role in the setting of prices as is the case for any Agriculture Minister in the EU.

A prolonged period of volatility in dairy markets has been in evidence in recent times. However it is important to remember that the medium term prospects for global dairy markets are good. How we mitigate the current volatility is the challenge.  Volatility in dairy markets is a global problem, an EU problem and an Irish problem for which there is no single silver bullet. Fixed price and margin contracts, futures markets and access to increasingly flexible forms of credits are all part of the toolkit that will be required. In this respect we must continue to work with industry and the financial services sector at a national level to ensure resilience is built into the sector in the current period of volatility and going forward, strengthening our position within the global market.

I am anxious that we must focus on other support measures that can play a role in supporting the sector and it is vital that we continue to work closely with the Commission and all other key stakeholders in this regard. The Commission has already deployed a range of market supports including intervention and Aids to Private Storage, and provided a financial package of €500 million for liquidity assistance was agreed at the Agriculture council in September 2016. At yesterday’s Council of Agriculture Ministers, the Commission announced a further €500m support package for EU farmers. This is to be divided into two tranches, the first €150m will be reserved for an EU-wide scheme compensating farmers who reduce their milk output over certain reference periods towards the end of 2016.

For the other element of the package, €350m is set aside for Member State initiatives with fixed allocations per MS. Ireland will be allocated €11m. My firm view which I reiterated strongly at Council is that we must have maximum flexibility at MS level to use this funding as we wish and in a way which helps farmers while delivering maximum value for money. In my view we have to use this in a way which provides relief from current liquidity issues for farmers. There are considerable details yet to be worked out on both of these elements of the package and we are awaiting further details from the Commission.