Bernard Durkan (Kildare North, Fine Gael)
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480. To ask the Minister for Agriculture, Food and the Marine the extent to which the dairy industry has stabilised and expanded following the abolition of quotas; and if he will make a statement on the matter. [41949/17]

Michael Creed (Cork North West, Fine Gael)
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As the Deputy is aware, Ireland strongly supported the abolition of the milk quota regime in 2015, on the basis that quotas were widely regarded by all concerned as a brake on the potential of the Irish dairy sector to respond positively to market opportunities. The ending of milk quota regime represented an exceptional opportunity for the dairy industry to increase milk output and reach the 50% target set out in Food Harvest 2020.

The previous two years were extremely challenging in the dairy sector. 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. While the outlook in 2017 has been more positive, there are a number of factors which continue to contribute to price volatility in the sector, including political factors outside our control. Notwithstanding challenges on the horizon, amongst which Brexit is paramount, stakeholders in the Irish dairy sector are well placed to benefit from expanding global demand.

In terms of market returns to primary producers, raw milk prices remain in the region of 35 to 36 cents per litre which is ahead of the EU average and over 50% ahead of where prices were this time last year. Peak production months have passed in Ireland and by end September circa 80% plus of the average dairy farmer's annual production has been completed. This combination of good prices and stronger supply means that 2017 can be expected to be a very good year for Irish dairy farmers in terms of market returns for their raw milk, which is welcome in the context of a very difficult 2016 in particular.

My Department continues to monitor the market and provide support to the sector through Rural Development Schemes such as TAMS, and by providing funding to bodies such as Teagasc, AHI and ICBF to improve efficiency at farm level. My Department recently announced the provision of an additional €6.75 million to fund critical marketing and promotion activities in existing and future markets for Irish dairy produce through Bord Bia, in support of programmes such as Origin Green and the Sustainable Dairy Assurance Scheme, as well as the Market Prioritisation exercise to inform strategic decisions in terms of investment of resources.

Ireland is strongly positioned as a competitive producer of dairy. It has enviable natural resources, adaptable and resilient producers, a strong international reputation, an effective dairy processing sector and a strong core of research infrastructure and expertise. My Department will continue to work with our partners in the industry to develop measures which can minimise the effects of such downward volatility in the future and ensure sustainable growth.