Niamh Smyth (Cavan-Monaghan, Fianna Fail)
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403. To ask the Minister for Agriculture, Food and the Marine his views on the move by the European Commission to release 22,500 tonnes of skimmed milk powder onto the market; the way in which this will further impact on farmers in crisis in the dairy sector; if he has contacted the European Commission following its decision to draw its attention to the current crisis being faced by dairy farmers here; and if he will make a statement on the matter. [38360/16]

Michael Creed (Cork North West, Fine Gael)
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The EU Commission has decided to tender for the release of a limited quantity of SMP currently held in intervention.

The proposal, the object of which is to have a managed release of 22,150 tonnes (6% of total EU intervention SMP stock) of intervention skimmed milk powder to the market, was carefully considered by my Department in consultation with Industry stakeholders.

The purpose of public intervention buying is to put a floor under market prices in periods of downward price volatility. One of the potential disadvantages is that large stocks overhanging the market can have a downward pull on market sentiment which negatively impacts on prices. In addition, there are costs associated with storage of these stocks, borne by the taxpayer, which need to managed effectively.

It is understood therefore, that product held in intervention must be returned to the market at some point. In this instance the Commission has decided to test the market place at a time when production in the Northern hemisphere is at its lowest, and prices are rising.

My Department will continue to work closely with the EU Commission, other member states and industry stakeholders to ensure that the intervention stocks are released onto the market in an orderly fashion so as to avoid market distortion.