Written Answers. - Common Agricultural Policy.

Jimmy Deenihan

Question:

54 Mr. Deenihan asked the Minister for Agriculture and Food the effect that the agreed Fischler proposals will have on the income of dairy farmers; and if he will make a statement on the matter. [18899/03]

Under the mid-term review of the Common Agricultural Policy, additional cuts in the intervention price support amount to approximately 4% when compared to the Agenda 2000 agreement. This adjustment is compensated by way of direct payment to dairy farmers which amounts to about 80% of that reduction. That compensation amounts to almost 5 cent per gallon of the 6 cent per gallon intervention price cut.

As regards the impact on producer incomes this depends on the extent to which the reduction in price supports is reflected in the price of milk. If the reduction was fully reflected in the milk price then the additional 4% cut would involve a reduction totalling approximately €14 million, when the 80% compensation is taken into account. The extent to which milk prices will reflect the reduction in support price levels is dependent on a number of factors, in particular the level of prices on the market, and the type and range of products produced and marketed, and the extent to which the milk processors and the industry generally, relies on intervention as an outlet.