Dáil Éireann Debate, Thursday - 27 October 2016
161. Deputy Bernard J. Durkan asked the Minister for Agriculture, Food and the Marine the degree to which he remains satisfied regarding the availability of opportunities for dairy exports in the future; and if he will make a statement on the matter. [32480/16]
View answerI am well aware of the challenges faced by producers in the dairy sector. The last 18 months have been somewhat challenging particularly in the dairy and pigmeat sectors due to a number of factors. These factors contributing to global price volatility in 2015 and 2016 included the Russian Ban and the softening of Chinese demand on one side, coupled with increased production among key global producers including the EU on the supply side.
The UK Brexit referendum is obviously foremost in our minds too and in Government it is very much our number one priority. It is essential that we retain our national competitiveness as much as we possibly can while mitigating the effects of a possible disruptive exit by Britain from the EU. The effects on our agri-food sector are already been felt by exporters hugely affected by the strengthening sterling rate against the Euro lately. I am listening closely to what exporters have to say and as recently as Thursday last I chaired a meeting of a Stakeholder Forum for the agri-food sector which I established to focus on Brexit related issues. This will continue to be my priority in the immediate future.
One of my priorities now, particularly in the context of Brexit is to further increase the market opportunity for Irish food and drink internationally. We are after all an exporting nation with 90% of our food produce leaving the island. It is for this reason I led a major trade mission to four Asian Countries in September and why I will be leading another one to Algeria and Morocco next month. It is only through further increasing our footprint internationally that we will help to mitigate the effects of Brexit and develop our agri-food sector to realise its full potential.
There are a number of other initiatives at industry, national and EU level aimed at mitigating market volatility in the dairy sector. The EU Commission has responded to these difficulties through the deployment of support measures provided for under the CAP. Market difficulties continued into the middle of 2016 and the Commission presented a further package of measures at the Agri-Fish Council in July. The main component is a fund of €500 million, which is in turn comprised of two elements.
The first is a €150 million EU-wide measure that will compensate farmers for reducing their milk output in the final quarter of 2016 compared to the same period in 2015 (at a rate of 14c/kg). In Phase 1 over 99% of available resources in terms of finances and tonnages were applied for. In Ireland, this amounted to approximately 74.2 million kilos from approaching 4,500 producers. If fully utilised, this will be worth over €10m to Irish dairy producers. Phase 2 of the scheme saw approaching 570 Irish suppliers apply for over 6 million kilos of reduction. At EU level, Phase 2 of the scheme was highly oversubscribed, with approaching 100 million kilos worth of proposed reductions made for the approximate 12 million kilos remaining after Phase 1.
The second element of the EU July 2016 package is a €350 million fund that will be allocated to Member States in the form of national envelopes, which Member States can use in accordance with their domestic circumstances. As part of Budget 2017 I announced a new low cost loan fund for the livestock, including in particular dairy, as well as tillage sectors which will utilise Ireland's €11.1M allocation, in conjunction with national funds, to leverage a greater fund in the region of €150M to provide such a low cost loan model for Irish farmers.
The long-term fundamentals of the global dairy market are strong but there have been significant challenges this year. I am confident that the Irish and EU dairy sector is well placed to gain from the opportunity presented by expanding global demand whilst simultaneously addressing the aforementioned challenges with a particular focus on the challenges of price volatility.
