Austin Deasy
Ceist:13 Mr. Deasy asked the Minister for Agriculture and Food the reason for the decrease in the price of milk; and the measures he is taking to rectify the problem.
Ceisteanna — Questions. Oral Answers. - Milk Prices.
Prices in international markets for dairy products improved significantly in 1988 and remained buoyant throughout most of 1989. The recovery of the world dairy market in 1988 and 1989 was a direct result of the actions taken by the EC in reforming its milk regime through the imposition of quotas on milk production, restrictions on intervention intake and the elimination of intervention stocks. However, world market prices started to weaken in August 1989 and the decline has continued into 1990. There are a number of factors involved in the decline, the primary one being the fall in butter consumption worldwide. The reason for the decrease in the price of milk is the weakening of the world price for dairy produce. Producer returns have started to feel the effect of the downturn in the commodity markets just as they benefited from the exceptional market buoyancy in the past two years.
I approached the Commission in early January seeking stronger market management measures to alleviate the problem and action on a number of fronts has since been taken. Recently I again requested that the Commission improve their internal disposal schemes, which I believe could do much to assist balance in the market. I am hopeful that further action in that regard will be taken. The successful outcome of the recent EC price negotiations of course, should also help firm up the market.
In the longer term, of course, the protection of dairy farmer incomes and job security will depend on action by the industry itself in regard to rationalisation, product mix and the effective promotion and marketing of its products.
Is the Minister aware that dairy farmers have taken a colossal drop in their income in the past year?
Yes, from a record level.
Does the Minister expect that the situation will improve? Can he give the dairy farmer any hope of an improvement?
I would want to see that trend stopped. Because of that, I approached the Commission and had detailed negotiations with them at the beginning of the Presidency. They took a number of actions then. I will not be satisfied until they take other actions, where necessary. I can give the Deputy some indications of what they have done. They increased the export refunds for butter, butter oil and buttermilk powder, they reintroduced intervention, which did not exist previously, with a total of 88,000 tonnes of butter and 51,276 tonnes of skimmed milk powder.
At a very low level.
They did this in response——
Let us hear the Minister's reply.
They introduced a new aids scheme for disposal of concentrated butter and restored the maximumn APS storage period. I have also been in communication with the Commission recently. As I have indicated already, there are other possibilities they can pursue. I have pointed out what they should be.
The price of the gallon of milk has dropped in some cases by as much as 20p or 25p. Can the Minister hold out any hope for dairy farmers that this price drop will be reversed?
The Deputy knows that dairy farming is still a very profitable enterprise. What is happening — I regret this as much as anybody else — is that the level of profit is not what it was, at the record level, last year. Having said that, I can hold out hope that the actions which are open to us to take will help the situation. There was also the reduction in intervention delays from 120 days to 45 days. That was significant.
If it is passed on.
I hope it is.
It is not happening in the beef trade.
I want to assure the House, and Deputy Deasy in particular — because I know he has demonstrated his commitment in this area — that, not only during the continuing Presidency but subsequently I will continue to press for action to maintain a stable level in this market.
A brief question, Deputy Connor, please. I want to get on to a Private Notice Question.
In relation to the fall in milk prices, would the Minister now agree that the distribution of the additional milk quota has proved to be disastrous, especially for small producers who have suffered most from what has happened? Can the Minister comment on the status of the new hygiene regulations for the dairy industry that will impose much hardship on many small producers? In view of the collapse in price can he say whether there will be any lessening or any increase in grants to help farmers to implement the new hygiene regulations?
I do not see any connection between the allocation of quotas for the small producers and the young producers. That has had no effect on the market. In fact, I was very glad to be able to do that.
Live in the real world, for goodness sake.
Am I now being criticised for actually providing an extra quota for small producers and young producers?
The Minister distributed it unfairly and inequitably.
Deputy Connor asked questions. He should be good enough to listen courteously to the reply.
With the greatest respect, facts should be placed before us.
We are dealing with a different element of the facts apparently.