Gay Mitchell
Ceist:13 Mr. G. Mitchell asked the Minister for Agriculture and Food the action he intends to take to curb the increase in the volume of butter being sold into intervention; and if he will make a statement on the matter.
Written Answers. - Dairy Products Stock Levels.
Michael Finucane
Ceist:30 Mr. Finucane asked the Minister for Agriculture and Food if the volume of butter used in the baking and ice-cream industries could be increased from 200,000 tonnes to 300,000 tonnes.
Bernard J. Durkan
Ceist:46 Mr. Durkan asked the Minister for Agriculture and Food if he intends, at EC or national level, to initiate measures to reduce intervention stocks of butter and skim milk powders; if he will indicate his proposals in this regard; and if he will make a statement on the matter.
Michael Lowry
Ceist:62 Mr. Lowry asked the Minister for Agriculture and Food if he has any proposals, as President of the EC Council of Agriculture Ministers, to put pressure on the EC Commission to increase export refunds for the export of dairy produce; and if he will make a statement on the matter.
I propose to take Questions Nos. 13, 30, 46 and 62 together.
As a result of the downturn in commodity prices on the world dairy market since late autumn 1989, the EC Commission reintroduced intervention tendering for butter in January 1990. As far as skim milk powder is concerned, intervention purchasing commenced on 1 March by virtue of the EC rules governing such purchases. To date, 99, 135 tonnes of butter and 107,324 tonnes of skim milk powder have been taken off the Community market.
These stock levels must, however, be put in their proper context. As recently as January 1987, Community stocks of butter and skim milk powder stood at 1,252,000 tonnes and 770,000 tonnes respectively. The absence of such stocks overhanging the market means that the market is much more responsive to improvements at Community level in market management measures.
Since the market decline became evident, I have been pressing the Commission for readjustments to the various support measures applicable in the dairy sector in order to restore balance and price stability to the market. A number of such measures have already been taken, including an increase in the level of export refunds for a number of dairy products with effect from 22 February 1990 and increases in the subsidy levels for butter used by the pastry, confectionery and ice-cream industries at both the tenders of 31 May and 14 June. I am hopeful that these increases in subsidy will enable the butter usage under that scheme in 1990 to exceed the level of 274,000 tonnes which was recorded in 1989.
Other market support mechanisms have also been strengthened, including a shortening of the payment period for intervention purchases, the introduction of a new aid scheme for disposal of butter in the form of concentrated butter and an increase in the maximum storage period under the scheme for private storage of butter. The Commission has also recently proposed increases in the aid levels for skim milk powder usage as animal feed and liquid skim milk used for feed on farms.
As some of these measures are only now being implemented their effects have not yet impacted on the market. Nevertheless, there are already indications that the level of intervention intake has diminished. In the two intervention tenders for butter last February, total Community purchases amounted to over 42,000 tonnes whereas purchases at the two most recent tenders came to less than 21,000 tonnes despite the fact that Community butter production would have increased since February.
I am closely monitoring the situation on the dairy markets and will press for further measures at Community level should these prove to be necessary. Our vulnerability to fluctuations in prices for commodity dairy products could, however, be considerably lessened if our dairy industry reduced its dependence on such products by developing a more diversified product portfolio closer to consumer requirements in the marketplace.