Written answers

Thursday, 22 June 2017

Department of Agriculture, Food and the Marine

Dairy Sector

Photo of Jackie CahillJackie Cahill (Tipperary, Fianna Fail)
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31. To ask the Minister for Agriculture, Food and the Marine the position regarding the EU Commission's plans in relation to skimmed milk powder intervention stocks; and if he will make a statement on the matter. [27966/17]

Photo of Michael CreedMichael Creed (Cork North West, Fine Gael)
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While 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. This was due to a combination of factors including increased global supply, the effects of the Russian ban on the import of EU agri-food products and reduced global demand, notably for dairy products in China.

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 welcomed some of the measures adopted by the Commission during this period. Key among these measures was the buying of skimmed milk powder (SMP) into intervention. Ireland's industry placed some 36,000 tonnes of product 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. Currently there are over 350,000 tonnes of SMP in intervention across the EU.

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. 

The process of tendering for release of product back onto the market commenced in December 2016. There was a single tendering round in December 2016 and multiple tendering rounds throughout 2017 thus far. On each occasion the Commission has adopted a cautious approach. Only 40 tonnes in total has been released thus far, and  this was at the first tendering event in December 2016. The tendering events since December have seen all offers rejected on the basis of what were deemed insufficient offers, often significantly below the market price for the stock. This approach has been supported unanimously by Member States, including Ireland.

It is critically important that the release of these stocks 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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