Niamh Smyth (Cavan-Monaghan, Fianna Fail)
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48. To ask the Minister for Agriculture, Food and the Marine his plans to introduce a floor milk price margin or a floor ceiling milk margin; and if he will make a statement on the matter. [41666/17]

Michael Creed (Cork North West, Fine Gael)
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As previously stated to the Deputy (PQ35321 of 2016), as Minister for Agriculture, I have no role in setting the price of any market commodity.

Income support is provided at EU level through the Basic Payment Scheme and the EU's Common Market Organisation Regulation provides a legal basis for market supports such as intervention for Butter and  Skimmed Milk Powder, and Aids for Private storage for butter, cheese and skimmed milk powder.  That regulation also provides for exceptional market measures when circumstances warrant it, and when other measures are not sufficient to deal with market shocks.

The processing sector also has a critical role to play in insulating farmers from the worst impacts of price volatility, including through fixed price and margin contracts which have become a feature of the relationship between farmers and their co-ops.

My role is to work with industry and other stakeholders to ensure that the sector develops in a way that best serves the consumer, the producer and the economy.

After a prolonged period of downward price volatility in dairy markets, 2017 has shown significant recovery.  At present the Irish raw milk price is 2.2% above the EU average and there has been strong increase in butter prices across the EU bloc in recent months.  Production for the first half of 2017 was up by over 10% on the same period in 2016.

A number of steps have been taken in recent times by industry, my Department and at EU level, to provide a buffer against market volatility in as far as is possible.  These steps include:

- Fixed price and margin contracts adopted by processors.

- Access to increasingly flexible forms of credit, notably the flexible loan fund for dairy and other farmers which I announced in Budget 2017.

- Market diversification efforts, through trade missions which I have led and research that my Department commissioned from Bord Bia on potential new and growth markets. Access to a range of  third country dairy markets is a critically important element in mitigating the impact of market volatility.

- On-going efforts within industry, supported by Government, to move dairy production up the value chain wherever possible. These are supported by investment by my Department and its agencies in research and innovation.

- Intervention and aids to private storage.

- Two financial aid packages. The first of €500 million for liquidity assistance was agreed at the Agriculture council in September 2015, with Ireland topping up its allocation to provide a total assistance package of approaching €27M to Irish farmers in late 2015 and early 2016.

- A further €500m support package for EU farmers was announced in July 2016.  The first €150m was reserved for the Voluntary Supply Management Scheme.  This was very well subscribed to in Ireland and was worth €6.5 million to Irish dairy farmers in 2017.

- The Super levy instalment Scheme was implemented in 2015 to ease the financial burden on farmers during the expansionary phase.

- A further measure that had 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 in 2016.

- These supports are of course additional to the many schemes available to dairy farmers under the Rural Development Programme including GLAS, TAMs and Knowledge Transfer.

- Price volatility will continue to be a feature of international markets. I will continue to work with industry, with other member states and with the EU institutions to consider how we can refine and improve mechanisms to help farmers cope with downward price cycles when they arise.