Vol. 553 No. 4
5 Mr. Hayes asked the Minister for Agriculture and Food the measures he intends to put in place to help alleviate the current crisis in the dairy sector, particularly in view of the unprecedented bad weather and falling milk prices. [14158/02]
The international market situation for milk products entered a period of decline in the third quarter of 2001 and this decline has deepened since then. Demand is weak for all products in all markets, primarily due to the economic slowdown in key international economies. In an effort to stimulate renewed demand I have pressed the EU Commission continuously for decisive action, utilising all the market mechanisms available at EU level for this purpose. In the past month I have exerted particularly strong pressure on the Commission and I have put a range of proposals to Commissioner Fischler, including the need to adopt a more aggressive export refunds policy, to prolong intervention for skim milk powder and to encourage greater utilisation of internal supports.
I am pleased that the Commission has responded to my proposals by increasing export refunds for cheese by 15%, further increasing skim milk powder and whole milk powder export refunds by 10% and 5% respectively, increasing aid for the manufacture of casein by 52% and agreeing to continue intervention for skim milk powder in excess of the threshold of 109,000 tonnes by means of a tendering system. In relation to this tendering mechanism, I have asked the Commission to ensure it is used to ensure maximum stability for the skim market on an ongoing basis.
These initiatives, taken in the last few weeks, follow a number of actions taken at EU level since the current market deterioration became evident last November. Export refunds for skim milk powder and whole milk powder were increased on five separate occasions and following the latest increase they stand at €715 and €1,078 per tonne respectively. Export refunds for butter were increased twice to their current level of €1,750 per tonne and private storage aid was introduced for butter and cheese. In addition, the main internal support measures such as aids for the use of butter in the ice cream and pastry sectors and aid for the use of skim milk powder in animal feed continue to take up significant quantities. I am fully aware of the situation and I will continue to closely monitor the market for dairy products to ensure every possible action is taken at community level to stimulate demand and to protect the incomes of dairy farmers.
I thank the Minister for his reply. Milk prices have fallen by more than 10p per gallon since September and all the major co-ops have said they will decrease the price of milk in the coming months. The unprecedented bad weather has led to an emergency situation whereby cows which normally produce up to four gallons of milk per day in June and July are now almost dry. Will the Minister take any immediate action to help these farmers? He must not understand how bad the situation is given that the answer he gave applied to a more overall view. I am talking about the immediate crisis currently facing farmers. It is raining every day, silage cannot be made and farmers have huge problems. I want to know what the Minister is doing for these people as a matter of urgency.
This year has been difficult for the dairy industry since at least last Christmas. I enumerated the various initiatives taken and assistance given in terms of export refunds, intervention, subsidies and so on. Nevertheless, there is over-supply and a surplus. Just last week I spoke again with Commissioner Fischler and got the 109,000 tonnes ceiling on intervention lifted so that additional product could be put into intervention. I met with the dairy executives a few weeks ago. I again met with representatives approximately ten days ago and I am fully conversant with the situation. I accept the Deputy's comment that together with the difficult market situation, the weather is also contributing to the problems. At this time of year, farmers would have cows out but they are currently inside eating silage. They are finding it difficult to make quality silage for the winter. As I am very familiar with the problem, I have taken an unprecedented level of initiatives to try to ameliorate it.
I am not aware of a number of co-ops reducing prices. In fact, one of the co-ops not so far from the Deputy's area, Glanbia, has said it will hold prices for the immediate future, which is good news.
If the Minister accepts the situation is bad, will he not introduce some emergency measures to help the Irish dairy industry? The reality is that his predecessor, former Minister and Deputy, Ivan Yates, introduced a special package of measures to deal with an unprecedented crisis. Some people are on the threshold of financial disaster. The reality is that the dairy industry is the cornerstone of agriculture. Can the Minister convince the bureaucrats in Brussels of Ireland's special position? He must lobby in Brussels on behalf of these people to try to obtain emergency measures.
