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Dairy Industry.

Dáil Éireann Debate, Thursday - 29 April 2010

Thursday, 29 April 2010

Ceisteanna (63)

Jack Wall

Ceist:

54 Deputy Jack Wall asked the Minister for Agriculture, Fisheries and Food his policy to prevent a repeat of 2009 in the dairy sector; and if he will make a statement on the matter. [16929/10]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Minister for Agriculture, Fisheries and Food)

Over the past few years the international dairy industry has witnessed extremes of volatility in product prices on an unprecedented scale. During 2007 dairy prices reached record high levels during the international commodity price boom. In 2008 world dairy markets returned to far lower levels primarily due to a collapse in demand caused by the global economic downturn. The slump continued into 2009 before gradually improving later in the year. I continually pressed the Commission to take all appropriate actions to deal with the dairy market situation and the implementation of a range of support measures helped to stabilise the market. The dairy market situation has improved considerably since last Autumn and more recently has shown signs of a robust recovery with increased commodity prices on world and EU markets, and a consequent rise in milk prices.

I am committed to a strong and adequately resourced CAP after 2013 and I believe there is a continued role for existing market measures. The experience of the dairy sector in the past year reinforces this view. Furthermore, there is also a need for new measures which could assist in managing market volatility, and the Commission High Level Group on Milk is currently considering this issue. The Group was tasked with examining medium and long term ways of stabilising dairy farmers incomes and improving market transparency and will deliver a report by the end of June 2010.

Ultimately, the market is the source of income and to maximise profit the focus must be on competitiveness, efficiency and innovation. This was the aim of the Dairy Investment Fund which my Department provided funding of €114 million towards in 2007. This fund aided a total of 19 dairy processing investment projects, which will generate an estimated capital spend of €286 million at full production. The purpose of the Fund is to increase the efficiency of the main dairy outputs by supporting the upgrading of plant and buildings. This will assist operators in capturing new business in global markets and in developing new valued added products.

At producer level I have introduced measures to assist dairy farmers maximise their efficiency and competitiveness. Various initiatives have been taken in relation to the operation of the milk quota regime to improve efficiency of production. Furthermore, in July 2009 I announced proposals for the spending of more than €200 million on new investment measures in Irish agriculture as part of a revised Rural Development programme. These included the allocation from unspent Single Payment Scheme funds of €6 million per annum for the next three years to a scheme to encourage significant improvement in efficiency on dairy farms.

This Dairy Efficiency Programme is now up and running, and is helping dairy farmers to adopt best practice in the running of their enterprises by focussing on efficient grassland management, better breeding practices and improved financial management. This is being achieved through increased participation in discussion groups, and I am confident that the initiative can double the rate of involvement in such groups and make a significant contribution to helping the sector to deal with the challenges and the enormous opportunities that it is presented with. In addition, €45 million has been earmarked for an investment support scheme aimed at helping young dairy farmers to adjust to expanding dairy opportunities and make their commercial operations more cost effective.

It is important to remember that the medium term prospects for global dairy markets are good. Growth in wealth and population is forecast to stimulate strong levels of demand for dairy products and returns will improve to all parts of the sector. The Government is committed to ensuring that the Irish dairy sector reaches its full potential. One of the major challenges in the medium term will be to ensure that Irish farming and the agri-food sector is at the heart of an evolving high-value food market, which is focused on quality and innovation. This is at the core of Government strategy which sets out a series of actions to develop a competitive, innovative and consumer focused agri food sector.

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