Written answers

Tuesday, 20 June 2017

Department of Agriculture, Food and the Marine

Dairy Sector

Photo of Charlie McConalogueCharlie McConalogue (Donegal, Fianna Fail)
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1674. To ask the Minister for Agriculture, Food and the Marine his views on a review of the public intervention instrument and reference threshold levels for butter and skimmed milk powder as permitted under CAP regulation 1308/2013; if he has had discussions at European level in this regard; and if he will make a statement on the matter. [28445/17]

Photo of Michael CreedMichael Creed (Cork North West, Fine Gael)
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Whilst dairy markets are currently broadly stable, the Deputy will be aware that between mid 2014 and the end of 2016 dairy markets experienced significant difficulties. During that phase of volatility, the EU Commission, both prompted and supported by Ireland, among other Member States, responded to these difficulties through the deployment of support measures, including intervention provided for under the CAP.

Ireland's industry placed some 36,000 tonnes of skimmed milk powder (SMP) into intervention between September 2015 and the end of 2016. During this period, the EU Commission, supported by Ireland and other Member States, raised the volume thresholds for fixed-price intervention for SMP on a number of occasions. The increased volume thresholds for SMP of 350,000 tonnes and a commitment to avoid market disruption when releasing product have had a stabilising effect on the market in late 2016 and early 2017.

Provisions in the Common Market Organisation (CMO) Regulations indicate that the reference thresholds and by extension reference prices for intervention shall be kept under review by the Commission, taking account of objective criteria, notably developments in production, costs of production and market trends. This issue was discussed at EU level during the most recent period of volatility. However, the mechanism for updating the reference thresholds is ordinary legislative procedure which it was indicated would take 18 months. Thus the decision was to utilise enhanced supports in other areas which would have more immediate impact.

The issue of critical importance at present is that the release of stocks of SMP is managed in a way that does not de-stabilise the market, particularly through the peak phase of production in Ireland and the EU. I am satisfied to date that the Commission has managed these stocks in a prudent and sensible manner.

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