Bernard Durkan (Kildare North, Fine Gael)
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162. To ask the Minister for Agriculture, Food and the Marine the extent to which his Department continues to monitor the margins availability to producers in the pig, poultry, beef and lamb sectors; the extent to which margins have narrowed or are likely to narrow; and if he will make a statement on the matter. [32481/16]

Bernard Durkan (Kildare North, Fine Gael)
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168. To ask the Minister for Agriculture, Food and the Marine if he proposes any particular initiatives to address appalling returns to producers in the meat and dairy sectors; and if he will make a statement on the matter. [32487/16]

Michael Creed (Cork North West, Fine Gael)
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I propose to take Questions Nos. 162 and 168 together.

I am well aware of the challenges faced by producers in the Irish meat and dairy sectors. The last 18 months have been somewhat challenging particularly in the dairy and pigmeat sectors due to a number of factors. These factors contributing to global price volatility in 2015 and 2016 included the Russian Ban and the softening of Chinese demand on one side, coupled with increased production among key global producers including the EU on the supply side.

The UK Brexit referendum is obviously foremost in our minds too and in Government it is very much our number one priority. It is essential that we retain our national competitiveness as much as we possibly can while mitigating the effects of a possible disruptive exit by Britain from the EU. The effects on our agri-food sector are already been felt by exporters hugely affected by the strengthening sterling rate against the Euro lately. I am listening closely to what exporters have to say and as recently as Thursday last I chaired a meeting of a Stakeholder Forum for the agri-food sector which I established to focus on Brexit related issues. This will continue to be my priority in the immediate future.

One of my priorities now, particularly in the context of Brexit is to further increase the market opportunity for Irish food and drink internationally. We are after all an exporting nation with 90% of our food produce leaving the island. It is for this reason I led a major trade mission to four Asian Countries in September and why I will be leading another one to Algeria and Morocco next month. It is only through further increasing our footprint internationally that we will help to mitigate the effects of Brexit and develop our agri-food sector to realise its full potential.

There are a number of other initiatives at industry, national and EU level aimed at mitigating market volatility in the agrifood sector. The EU Commission has responded to these difficulties through the deployment of support measures provided for under the CAP. Market difficulties continued into the middle of 2016 and the Commission presented a further package of measures at the Agri-Fish Council in July. The main component is a fund of €500 million, which is in turn comprised of two elements:

The first is a €150 million EU-wide measure that will compensate farmers for reducing their milk output in the final quarter of 2016 compared to the same period in 2015 (at a rate of 14c/kg). In Phase 1 over 99% of available resources in terms of finances and tonnages were applied for. In Ireland, this amounted to approximately 74.2 million kilos from approaching 4,500 producers. If fully utilised, this will be worth over €10m to Irish dairy producers. Phase 2 of the scheme saw approaching 570 Irish suppliers apply for over 6 million kilos of reduction. At EU level, Phase 2 of the scheme was highly oversubscribed, with approaching 100million kilos worth of proposed reductions made for the approximate 12 million kilos remaining after Phase 1.

The second element of the EU July 2016 package is a €350 million fund that will be allocated to Member States in the form of national envelopes, which Member States can use in accordance with their domestic circumstances. As part of Budget 2017 I announced a new low cost loan fund for the livestock, including in particular dairy, as well as tillage sectors which will utilise Ireland's €11.1M allocation, in conjunction with national funds, to leverage a greater fund in the region of €150M to provide such a low cost loan model for Irish farmers.

The long-term fundamentals of the global dairy market are strong but there have been significant challenges this year. I am confident that the Irish and EU dairy sector is well placed to gain from the opportunity presented by expanding global demand whilst simultaneously addressing the aforementioned challenges with a particular focus on the challenges of price volatility.

On the sheep sector, I am also aware profitability at farm level remains a challenge for all sheep farmers, including hill farmers. My Department already has in place a number of schemes, including the BPS, GLAS, ANC and TAMS which make vital contributions to ensuring the continuing viability of hill farming.

The Programme for Government commits to the introduction of a scheme for sheep farmers under the Rural Development Programme with a budget of some €25 million to be provided in Budget 2017. This new Animal Welfare scheme for sheep, in addition to the existing supports available to sheep farmers under the BPS, GLAS, ANC and TAMS, will make a vital contribution to ensuring the continuing viability and sustainability of the sheep sector in Ireland.

In designing the scheme, I am aware of the different challenges facing sheep farmers in which different areas of sheep farming are carried out in Ireland. I believe that this scheme will provide a lasting benefit to sheep farming and demonstrates and acknowledges the contribution sheep farming makes to the Agri-food sector in this country. This scheme has been submitted to the European Commission for formal approval as part of Ireland's proposed second amendment to the Rural Development Programme.

My role as Minister in relation to the beef sector is to create a policy and support environment that allows it to flourish in line with standard market principles and delivers the best possible returns for all participants in the sector. I am guided in this context by the long-term sectoral development strategies as set out in Food Wise 2025 and I am confident that these initiatives, in conjunction with the Rural Development Programme, will lead to continued growth in terms of profitability and efficiency of the sector as whole. The primary determinant of prices in any market is the relationship between supply and demand. As with any Minister for Agriculture in the EU, I can have no role in beef prices in Ireland.

It is a clear objective of mine to ensure that this sector continues to receive the necessary support to address the challenge of profitability within the sector. In addition to the Basic Payment Scheme, a range of measures introduced under the Rural Development Programme helps to improve efficiency and profitability on farm and to support environmentally sustainable production. This includes programmes such as TAMS, GLAS, Knowledge Transfer Groups and of course the Beef Data and Genomics Programme.