Dáil Éireann debate -
Thursday, 20 Jun 2002

Vol. 553 No. 4

Written Answers. - Food Processing Sector.

Willie Penrose

Question:

34 Mr. Penrose asked the Minister for Agriculture and Food if his attention has been drawn to concerns expressed by a person (details supplied) that up to 4,000 jobs in the food processing sector and related industries could be lost due to falling farm prices; the steps he is taking to avert such a serious development; and if he will make a statement on the matter. [14039/02]

Minister for Agriculture and Food (Mr. Walsh)

I am aware of the statement to which the Deputy refers. I am acutely conscious of the difficulties that have arisen, particularly in the dairy markets over the past number of months, as a result of a weakening in international demand, and have taken immediate action to address the situation.

Specifically in the dairy sector, I have pressed the EU Commission continuously for decisive action utilising all the market mechanisms available at EU level to stimulate demand. In the past month I have exerted particularly strong pressure on the Commission and I have put a range of proposals to Commissioner Fischler. These included the need to adopt a more aggressive export refunds policy, to prolong intervention for skim milk powder and to encourage greater utilisation of internal supports. I am pleased that the Commission has responded to my proposals by increasing export refunds for cheese by 15%, further increasing SMP and whole milk powder export refunds by 10% and 5% respectively, increasing aid for the manufacture of casein by 52% and agreeing to continue intervention for SMP in excess of the threshold of 109,000 tonnes by means of a tendering system. In relation to this tendering mechanism, I have asked the Commission to ensure that it is used to ensure maximum stability for the skim market on an ongoing basis.

These initiatives, taken in the last few weeks, follow a number of actions taken at EU level since the current market deterioration became evident last November:

Export refunds for skim and whole milk powder were increased on five separate occasions, and together with the latest increase now stand at €715 and €1078 per tonne respectively;

Export refunds for butter were increased twice to their current level of €1750 per tonne; and private storage aid was introduced for both butter and cheese.

In addition, the main internal support measures such as aids for the use of butter in the ice cream and pastry sector and aid for the use of skim powder in animal feed continue to take up significant quantities.

I will continue to closely monitor the market for dairy products in order to ensure that every possible action is taken at community level to stimulate demand so as to safeguard the position of the processing industry and to protect the incomes of dairy farmers.

As far as the beef sector is concerned, cattle prices are reasonably satisfactory at present having regard to the increased premiums payable under Agenda 2000. My Department is making every effort to secure the re-opening of those third country markets, which were closed to Irish and EU beef following the BSE scares of 2000. The Egyptian market re-opened last year and, in recent weeks, a shipment of beef to Egypt has been prepared by one of our major exporters for Egypt. Naturally, I am hopeful that this initial shipment will generate further business in this important market. EU markets are continuing to offer strong demand for Irish beef, which is helping the overall situation. In relation to beef, following the BSE crisis in late 2000, the Government took very decisive and crucial action to deal with the surplus of beef coming on to a weak market during 2001 and to deal with a range of problems associated with the banning of meat and bone meal as a feed. All of this, especially when taken against the background of increasing direct payments negotiated under Agenda 2000, contributed, and continues to contribute, to the maintenance of producer incomes in this sector.