Jackie Cahill (Tipperary, Fianna Fail)
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26. To ask the Minister for Agriculture, Food and the Marine the latest developments regarding skimmed milk powder, SMP, intervention at EU level; the data on sales; the EU Commission's plans for SMP intervention tendering in 2019; and his views in relation to same. [41475/18]

Michael Creed (Cork North West, Fine Gael)
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As the Deputy is aware, the Irish dairy market, in line with broader EU and international trends, is currently in a much improved position compared to the period 2014 - 2016. Of course, we remain vigilant in monitoring the market and emerging trends, particularly after the challenges of this season faced by Irish farmers.

The issue of intervention stocks overhanging the dairy market remains a cause for concern, arising from the significant recourse to this market measure for skimmed milk powder across the EU since September 2015.

Figures from the European Commission show that there were approximately 245,000 tonnes of skimmed milk powder in public intervention stocks at the end of September 2018 ,effectively overhanging the EU skimmed milk powder market. This figure represents a substantial reduction of over 145,000 tonnes in the quantity of SMP in public intervention stocks across the EU over the course of this year.

In relation to the sale of intervention stocks, the Commission has agreed to accept bids as part of recent tender processes, for approximately 43,000 tonnes of SMP at a price of €123/100kg since August.

An additional recent development in terms of the strategy adopted for reducing the overhang of SMP stocks in public intervention has been to amend Implementing Regulation 2016/2080 “as regards the periods for the submission tenders”, which will result in approximately doubled frequency of tenders for sale of product in intervention which provides for “two partial invitations to tender per month”.

Regarding the Commission’s general approach, my Department and I engaged at Council of Ministers meetings and directly with the Commission on recent measures to prevent further stockpiling of skimmed milk powder into 2019 without due justification, including the Commission's proposal to reduce the fixed-price ceiling to zero which it had previously introduced for 2018.

This proposal is for 2019 only and it is essential that this should not mark a fundamental or permanent change in the mechanism for intervention for dairy products agreed by Member States in the Council Regulation in 2013. The intervention mechanism is an essential tool which puts a floor under SMP prices and the importance of its availability to the Commission as a means to deal with extreme price volatility and any other market crisis must be acknowledged.

I have clearly stated previously, at Council of Ministers meetings and elsewhere, that it is imperative that the Commission remains vigilant in monitoring the market and that it has contingencies in place in the event of market volatility re-emerging in relevant markets, particularly the raw milk, butter and skimmed milk powder markets. However, in common with the vast majority of EU member states where dairy production is of significance, I recognise that the current position of existing stocks cannot be allowed to persist indefinitely.

Given the Commission's status among the world’s biggest players on the skimmed milk powder market, and as such its capacity to affect market sentiment, the Commission should act prudently and responsibly in the disposal of stocks. I am satisfied to date that the Commission has managed those stocks in a prudent manner.

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