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27 February 2009: Smith calls for greater EU support for the Dairy sector

The Minister for Agriculture, Fisheries and Food Brendan Smith TD spoke this week to EU Commissioner Mariann Fischer Boel to emphasise once again his continued concern for the current state of the dairy market and to press for the immediate activation of all forms of market support "to get the sector through this very difficult period". The Minister will meet Commissioner Fisher Boel in Brussels shortly to discuss these issues further.

Emphasising the fact that the outlook for the short term is extremely difficult, the Minister reminded the Commissioner that we are facing an unprecedented situation. Allied to the correction to markets that is now taking place as a result of historically high prices in 2007 and early in 2008, there is the further complication of the credit crunch. These two, in combination, have placed an enormous burden on the dairy sector and have caused a slump in demand as a consequence.

While noting the response to date to support the market, through the early introduction of Private Storage Aid for butter, the commitments made regarding intervention for butter and skimmed milk powder, which open for buying-in next week, and the reinstatement of export refunds in recent weeks, the Minister emphasised that "the levels at which refunds and intervention function will be critical to the speed at which we emerge from the current slump".

Minister Smith said: "We are at a critical period in the market and as supplies come on stream in abundance in the next few months I strongly believe that we need a multiple track approach - a short sharp utilisation of the full range of market management measures - to get the market back to equilibrium". This can be achieved quickly with competitive refunds that lead to the permanent disposal of product. In addition, the continuation of intervention for butter and SMP after the mandatory limits of 30,000 tonnes of butter and 109,000 tonnes of SMP are reached is extremely important but will only be effective if the tendering arrangements remain relatively attractive.

The Minister also urged the Commissioner to avail of the option open to her to introduce support for the use of SMP in animal feed and aid for the production of casein."These schemes would, if appropriately structured and quickly activated, help restore order to the sector that may not recover quickly enough in their absence".

Minister Smith also discussed the dairy market situation with French Agriculture Minister Michel Barnier, who expressed equally strong concern and agreed to support the Minister's initiatives at EU level. Minister Smith said that he would continue working towards securing further support for his initiatives with the aim of improving dairy market supports in the coming weeks.27 February, 2009

Date Released: 27 February 2009