Niamh Smyth (Cavan-Monaghan, Fianna Fail)
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217. To ask the Minister for Agriculture, Food and the Marine the efforts being made to address the volatility in the milk sector; his plans to put in a floor in the milk price to ensure farmers particularly in counties Cavan and Monaghan are not working for nothing; and if he will make a statement on the matter. [35321/16]

Niamh Smyth (Cavan-Monaghan, Fianna Fail)
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219. To ask the Minister for Agriculture, Food and the Marine his plans to sustain milk production going forward and to secure jobs in counties Cavan and Monaghan; and if he will make a statement on the matter. [35323/16]

Michael Creed (Cork North West, Fine Gael)
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I propose to take Questions Nos. 217 and 219 together.

As minister for Agriculture, I am concerned with the livelihoods of farmers in all sectors in each of the 26 counties.

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. I have no role in the setting of prices of course.

After a prolonged period of price volatility in dairy markets , there are some tentative signs of recovery. At present the Irish raw milk price is 6.2% above the EU average and there has been strong increase in butter prices across the EU bloc in recent weeks.

However, volatility will continue to be a feature of global dairy markets. 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. There has been significant progress in each of these areas, with initiatives by processors and a new flexible loan fund for dairy and other farmers announced in Budget 2017.

On the market front, since taking office I have led trade missions to Asia and to North Africa, with a view to increasing the profile of Ireland as a producer of quality food products, including dairy products. These markets are characterised by existing business relationships, but also high potential for further growth. The development of trade in international dairy markets for Irish producers is key to ensuring sustainable growth for the sector and is also a critically important element in mitigating market volatility. This work on market diversification is particularly important in the context of Brexit.

The Dairy Quality Assurance Scheme is also critically important in developing a unique selling point for Irish dairy products on EU and international markets. Dairy processors make a substantial contribution to cover some of the costs of audits under the scheme, but of course the question of price incentives for participation is a matter for the industry.

On-going efforts within industry, supported by Government, to move dairy production up the value chain wherever possible are also critically important. These efforts are supported by investment by my Department and its agencies in research and innovation. By providing financial support for Teagasc, ICBF and Animal Health Ireland, and for knowledge transfer groups, we are investing in the provision of advice and education to farmers, to facilitate technology adoption and improve profitability at farm level. My Department is also providing support for investment at farm level through the TAMS scheme.

Where appropriate, we must continue to focus on appropriate national and EU measures that can play a role in supporting the sector. It is vital that we continue to work closely with the Commission and all other key stakeholders in this regard. The Commission, in many instances based on suggestions from Ireland and other like minded Member States, has already deployed a range of market supports including intervention and Aids to Private Storage, and a financial package of €500 million for liquidity assistance was agreed at the Agriculture council in September 2016, with Ireland topping up its allocation to provide a total assistance package of approaching €27M to Irish farmers in late 2015 and early 2016.

The Commission also announced a further €500m support package for EU farmers in July 2016. The first €150m was reserved for an EU-wide scheme compensating farmers who reduce their milk output over certain reference periods towards the end of 2016. This was very well subscribed to in Ireland and, should the commitments for reduction be adhered to, will be worth over €10M to Irish dairy farmers in 2017.

For the other element of the Commission package, €350m is set aside for Member State initiatives with fixed allocations per MS. Ireland’s allocation under this scheme is €11m. I have decided to provide an additional €13 million national aid in that in order to optimise the effectiveness of this measure and to use it to support the development of a €150 million fund for low interest loans for farmers.

A further measure that has assisted in reducing the burden on farmers was the negotiation and agreement of advanced payments for the Basic Payment and the RDP schemes, allowing us to pay out 70% and 85% respectively from 16th October.

I can assure the Deputy that I will continue to work closely with the dairy sector, with EU colleagues and International counterparts to ensure the development and maintenance of a sustainable dairy sector in Cavan, Monaghan and elsewhere.