13 March 2009

2 minute read

Europe

Speaking after the meeting, the Minister said “the Commissioner has a full understanding of the importance of the dairy sector to Ireland and I left her in no doubt about the urgency in providing appropriate levels of support for the sector at this critical time”.

The current dairy market situation is very difficult, with market volatility intensified as a result of the credit crunch. International demand for product is weak and the Minister believes that a combination of increased export refunds for butter and skimmed milk powder as well as the careful and prudent management of the tendering arrangements for butter now that mandatory limits have been reached will be crucial to restoring stable market conditions.

“We need a twin track approach, one that involves swiftly moving large volumes of product into international markets and, at the same time, removing product temporarily from the internal market until such time as there is a recovery across the board. These twin aims can be achieved by providing competitive refunds, at levels that make a real market impact, and simultaneously, storing current product surpluses at prices that provide a realistic and fair return for producers.

Practical, targeted and effective market management measures, implemented in a timely manner, operating over a relatively short timescale will speed the recovery and get the sector through current market difficulties”, said Minister Smith.

The Minister also urged the Commissioner to avail of the option open to her to consider other support mechanisms and in particular, to reduce the threshold 'free at frontier price' for cheese exports in order to make practical use of the available export refund.

Accepting the difficult market situation being experienced at present the Commissioner said that the early introduction of Private Storage Aid for butter, the opening of intervention for butter and skimmed milk powder, together with the reactivation of export refunds had given a boost to the sector and put a floor on the downward spiral which she believed had bottomed out. She fully understood the clear message the Minister had given her and undertook to keep under close review the degree to which market mechanisms should support commercial markets.

Concluding, Minister Smith said “I had a very useful exchange with the Commissioner and will widen and intensify the debate further in the coming weeks with the aim securing a recovery in dairy markets”. The Minister will raise this matter again with his colleagues at the Council of Agriculture and Fisheries Ministers meeting later this month.

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