Jackie Cahill (Tipperary, Fianna Fail)
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1220. To ask the Minister for Agriculture, Food and the Marine the status of the fixed price regime for skimmed milk powder; and if he will make a statement on the matter. [1368/18]

Michael Creed (Cork North West, Fine Gael)
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As the Deputy is aware, the Irish dairy market, following on from broader EU and International trends, is currently in a much improved position compared to the relatively recent past. Whilst the overall dairy sector is now in a much better place, particularly at the farm gate, there has been significant recourse to intervention for skimmed milk powder (SMP) across the EU since September 2015.

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 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 37,000 tonnes of product into intervention between September 2015 and the end of 2016.

There are now approximately 376,000 tonnes of SMP in public intervention stocks, effectively overhanging the EU SMP market. My Department engaged with the Commission on recent proposals to limit further piling up of SMP in 2018 without due justification, including requesting that the Commission's proposal to reduce the fixed price ceiling to zero be specified as for 2018 only, to avoid setting a precedent for the longer term. I have previously stated that 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.

In common with the vast majority of EU Member States where dairy production is of significance within the broader agri-food sector, Ireland recognises that the current situation in respect of existing stocks cannot 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.

It is critically important that the release of these stocks is managed in a way that does not de-stabilise the market. I am satisfied to date that the Commission has managed these stocks in a prudent manner.

My Department has and will continue to engage with the Commission, with other Member States, and with national stakeholders on these important issues.