Charlie McConalogue (Donegal, Fianna Fail)
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439. To ask the Minister for Agriculture, Food and the Marine his views on plans by the European Commission to limit the amount of skimmed milk powder that it buys in public intervention in 2018; his further views on a tender system that is planned for the intervention process in 2018; and if he will make a statement on the matter. [48916/17]

Michael Creed (Cork North West, Fine Gael)
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As the Deputy is aware, there has been significant recourse to intervention for skimmed milk powder (SMP) across the EU since September 2015. There are now approximately 363,000 tonnes of SMP in public intervention stocks. The use of intervention during a turbulent period for the dairy sector provided a welcome safety net for producers in Ireland and across the EU. Whilst the overall dairy sector is now in a much better place, particularly at the farm gate, this intervention stock is now effectively overhanging the EU SMP market.

 The Commission’s concern, as expressed by Commissioner Hogan on a number of occasions, is to avoid further stockpiling of SMP next year.  The current Commission proposal is to reset the volume limit for intervention buying in at a fixed price to zero, from the existing limit of 109,000 tonnes. Buying into intervention could continue, but on the basis of a tendering route.  The Commission have indicated that such provisions will be implemented via the legislative route of normal implementing acts, whereby the Commission, whilst consulting with Member States, can act independently of the views expressed.

In assessing the Commission proposal, I recognise that the current situation in respect of existing stocks should not be allowed to persist indefinitely. However, the issue of current stocks cannot be disentangled from the issue of managing SMP intervention in 2018 and beyond.  The issues involved, with respect to both market management and sentiment in the sector, are complex and require ongoing careful management.

My Department has and will continue to engage with the Commission, and with other Member States, and with national stakeholders on these proposals:

- The Commission has been asked to set out an overall strategy in respect of dealing with the related issues of current stocks and management of SMP intervention in 2018 in tandem.

- In freeing up stocks, we will continue to request that the Commission do so in a prudent way, which does not send signals to the market that could affect overall sentiment in the sector.

- Ireland’s preference is that the proposed measure be specified as for 2018 only, to avoid setting a precedent for the longer term. It is important that the Commission remain vigilant in monitoring the market situation, and has contingencies in place in the event of market volatility re-emerging.