Dáil Éireann Debate, Tuesday - 3 October 2017
75. Deputy Jackie Cahill asked the Minister for Agriculture, Food and the Marine the detail of the European Commission's plans on 360,000 tonnes of SMP for intervention; and if he will make a statement on the matter. [41678/17]
Amharc ar fhreagraThe Irish dairy market, following on from broader EU and International trends, is currently in a much improved position compared to the relatively recent past. Raw milk prices remain in the region of 35/36c/l, which is around 2-3% ahead of the EU average and over 50% ahead of where they were this time last year. Peak production months have passed in Ireland and by end September more than 80% of the average dairy farmer’s annual production has been completed. This combination of good prices and stronger supply means that 2017 can be expected to be a very good year for Irish dairy farmers in terms of market returns for their raw milk. Butter prices are at all time highs and you cannot look at the SMP situation in isolation from the overall market picture, which is generally very positive compared to recent past.
Whilst dairy markets are currently broadly stable, the Deputy will be aware that between mid-2014 and end-2016 dairy markets experienced significant difficulties. This was due to a combination of factors including increased global supply, the effects of the Russian ban on the import of EU agrifood products and reduced global demand, notably for dairy products in China.
During that phase of volatility, the European Commission, both prompted and supported by Ireland, among other Member States, responded to these difficulties through the deployment of support measures, including intervention provided for under the CAP.
Ireland welcomed the measures adopted by the Commission during this period. Key among these measures was the buying of skimmed milk powder, SMP, into intervention. Ireland's industry placed some 36,000 tonnes of product into intervention between September 2015 and the end of 2016. During this period, the European Commission, supported by Ireland and other Member States, raised the volume thresholds for fixed-price intervention for SMP on a number of occasions. Currently, there are over 350,000 tonnes of SMP in intervention across the EU.
The increased volume thresholds for SMP of 350,000 tonnes and a commitment to avoid market disruption when releasing product have had a stabilising effect on the market in late 2016 and early 2017.
The process of tendering for release of product back onto the market commenced in December 2016. There was a single tendering round in December 2016 and multiple tendering rounds throughout 2017 thus far. On each occasion the Commission has adopted a cautious approach. The tendering events since December, by and large, have seen the vast majority of tenders rejected on the basis of what were deemed insufficient offers, often significantly below the market price for the stock. This approach has been supported unanimously by Member States, including Ireland.
It is critically important that the release of these stocks is managed in a way that does not destabilise the market. I am satisfied to date that the Commission has managed these stocks in a prudent and sensible manner.
