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Dairy Industry

Dáil Éireann Debate, Wednesday - 26 May 2010

Wednesday, 26 May 2010

Questions (226)

Bernard J. Durkan

Question:

238 Deputy Bernard J. Durkan asked the Minister for Agriculture, Fisheries and Food his development programme for the dairy sector over the next five years; the degree to which this relates to progress over the past five years; and if he will make a statement on the matter. [22266/10]

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Written answers

It is clear that the key to future prosperity in the dairy sector lies in increased efficiency and competitiveness. We in Ireland have the potential to significantly grow our milk production and take advantage of the very positive outlook for the dairy sector over the medium to long term. We also enjoy a significant advantage in the form of a grass-based production system, which, as well as keeping costs down, will help to achieve greenhouse gas emissions reduction targets. The exploitation of this advantage will help the sector to operate more efficiently and economically.

In this context there have been a number of initiatives to improve efficiency at farm level. Following the CAP Health Check, I made available €18 million from unspent CAP funds over three years, to encourage participation in Dairy Discussion Groups and promote best practice at farm level in terms of breeding, grassland and financial management. Additionally, the Milk Quota Trading Scheme, which has now completed its fourth year of operation, has been responsible for the efficient transfer of milk quota to active and progressive dairy farmers. Since last year, I have allocated additional quota, agreed under the Health Check, to all active milk producers on a permanent, saleable basis. I have also made provision for the allocation of additional quota to new and recent entrants to dairying on a scale designed to achieve viability from the outset.

On the domestic front, a complete overhaul of the milk quota regime was conducted in 2008, resulting in new regulations coming into effect from 1 April 2008. The new regulations greatly simplify the quota regime and bring the legislative framework into line with modern farming realities. They include the elimination of unnecessary bureaucracy, the provision of greater flexibility in the transfer of quotas, and the introduction of new rules for the operation of Milk Production Partnerships that remove obstacles to partnership formation and encourage new entrants to dairying.

Competitiveness will also be the key for the processing sector, with the focus increasingly on the need for greater collaboration and rationalisation, as well as investment in R&D and new product and process development. As part of the strategy for improving competitiveness at processor level, my Department has provided funding of €114 million towards investment in dairy processing and a total of 19 capital investment projects were approved and awarded Government grant assistance under the Dairy Processing Fund, which will generate an estimated capital spend of €286 million at full production. All of these initiatives are complemented by the valuable work of Teagasc and the funding provided for Research and Development through the Food Institutional Research Measure.

In relation to future policy, the Deputy will be aware that earlier this year, I established the 2020 Committee, comprising senior and respected figures from a range of stakeholders in the agri-food sectors. The group's remit is to make recommendations for a strategy for the agri-food sector, including the dairy sector, for the coming decade. This process is well advanced and I expect its output to help to set a clear way forward for the dairy and other sectors.

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