Jimmy Deenihan
Question:7 Mr. Deenihan asked the Minister for Agriculture and Food her proposals to assist with milk prices; and if she will make a statement on the matter. [24450/04]
View answerWednesday, 13 October 2004
Questions (6)
Oral answers (7 contributions)
The price paid to farmers for milk is a commercial matter between milk producers and the purchaser. A combination of the international market for dairy products, the product mix and efficiency of the processor, as well as the overall operation of the EU price support mechanisms determines price.
This year has been a relatively good one for the dairy industry with milk prices in Ireland remaining steady. There has been strong demand for dairy products on the EU and international markets and while there have been reductions in export refund levels, this reflects the improved level of demand for EU exports. I hope the current period of strong markets for dairy products will continue into the future. For my part, I will carefully monitor market developments to ensure that all EU market management mechanisms available are utilised in the best interests of all involved the dairy industry in Ireland. At the same time, it is essential that the industry achieves the maximum degree of efficiency along the producing and processing chain.
I join my colleagues in congratulating the Minister on her appointment. I am sure she will be effective in the Department of Agriculture and Food over the next two years.
There is a great deal of concern, which I am sure the Minister's colleague shares, regarding the price of manufactured milk and liquid milk. The price of liquid milk has been greatly affected by imports from Northern Ireland. Approximately 15% of our liquid milk now comes from Northern Ireland and that is suppressing the price of milk here. The suppliers of liquid milk are deeply concerned about this.
The Minister may be aware we use approximately 100 million gallons of liquid milk and approximately 1 billion gallons of manufactured milk. As the Fischler proposals factor in, export refunds have been reduced and intervention prices for skimmed milk have been considerably reduced. There is a fear that the price of milk could reduce considerably. The average price for liquid milk is 92 cent per gallon. I am sure Members will remember that 20 years ago liquid milk cost £1.08 per gallon. While much of the policy in this area is decided by Europe there are many things that can be done here in terms of marketing and encouraging manufacturers to make more use of and diversify from milk constituents. Does the Minister foresee the Department having a direct input in that regard? Does the Minister have a plan to offer more options to manufacturers so they can keep the price of milk up?
There are concerns. Change leads to trepidation in all industries and the diary industry is no exception. We are satisfied that the dip in prices, 0.6%, is small given the change that has taken place. My predecessor, Deputy Walsh, involved the dairy industry in the Prospectus report where we looked at greater efficiencies, reducing costs and the most effective ways to get a return on investment. The Minister met everyone involved in the sector and the findings have been discussed. The implementation of the findings in the report will be of importance in ensuring this valuable sector will be in a competitive position to deal with the change taking place. We will analyse the effects that change will have in combination with the changes in the Commission. At the moment we are satisfied that things are going well this year for the dairy industry but we are keeping an open mind on the matter.
Is the Minister prepared to encourage consumption of milk? The liquid milk trade is under pressure. If we compare the price of a litre of milk and a litre of water, which costs nothing to produce, a major effort is being made to sell water.
Will the Minister make every effort at the world trade negotiations to ensure products are produced on the same basis? I was on a farm in the United States where steroids were clearly being used and production was massively increased. Deputy Browne, the Minister of State, was with me and it was clear that we are not competing on an equal basis.
The Minister of State might have a greater insight about what the Deputy was doing in the United States but obviously his sojourn was productive. There are issues of grave concern that have been regularly discussed. There are degrees of acceptance of beef production practice all over the world. It will be difficult to deal with those issues but we will do our utmost to ensure that we form an alliance on the question. Sometimes these affairs are outside the national remit, they are European issues, but we will strenuously argue the case when it comes to market fairness.
The dairy industry has had a good run in recent years. The concerns relate to efficiency and effectiveness. The Deputy asked how we could increase consumption of liquid milk. Some of the creameries are looking at marketing. At the ploughing championships we saw the research that is being done to encourage young people to drink milk. In my previous role we were anxious to ensure milk was part of the school diet. It is easier said than done with all of the competition but a number of the creameries have looked at the potential and taken on board new ideas to be proactive in the market.
I laughed when the Deputy said how much it costs to produce a pint of milk. It must cost at least twice as much to produce a good pint of quality water — new water schemes cost several million euro. It is important, however, that we encourage young people to move away from obesity resulting from soft drink consumption, among other things. As Deputy Deenihan said, it is incumbent on people in the trade to ensure they get that market share, and that must be supported from all perspectives, including the health value of liquid milk.
I draw to the Minister's attention a substantial difference between the prices of different brands of milk — it can be up to 15 cent in the supermarket. That could be investigated under a different heading.
I know exactly what the Deputy means. It is terrible to be a woman who goes to the shop and knows what is going on in the country.