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Minister Smith welcomes agreement by the Council of Agriculture and Fisheries Ministers on Milk Package

The Minister for Agriculture, Fisheries and Food, Brendan Smith TD today attended the Council of Agriculture and Fisheries Ministers in Luxembourg where the main subject of discussion concentrated on the dairy sector. Speaking after the meeting the Minister said, "The meeting discussed a series of measures that should, once and for all, contribute to increasing stability in the EU dairy market".

Based on a quarterly report presented by Commissioner Fisher Boel, there was a generally positive debate on the trends now emerging in the dairy market. Emphasising the fragile nature of the market Minister Smith urged continued vigilance, particularly in regard to the disposal of butter and skimmed milk powder from intervention stocks. "While it is now evident that the dairy market has turned the corner and price movements are upwards, it is absolutely vital that we allow prices to recover on a sustained basis before releasing stock". The Minister was satisfied with the assurances given by the Commissioner in this respect.

Member States accepted that the Health Check decisions taken last year on the abolition of milk quotas should not be changed.  In the meantime Ministers agreed in principle to a new quota buy-back arrangement that could result in a potential increase in super levy should there be a significant level of take up. Minister Smith made it clear that this measure was not a practical choice for Ireland and insisted that the measure should remain optional rather than compulsory, as some had argued.

Ministers also agreed in principle to extend the regulatory framework to enable the Commission to take urgent measures in the dairy sector when internal market prices significantly rise or fall. "This change will allow the Community to act quickly on the dairy sector if and when the need arises" according to Minister Smith.

The Minister welcomed the agreement on a €280 million dairy fund as a means of providing direct support to dairy farmers which he had called for at the meeting and which had been a request of the Group of 21 Member States who met last Monday in Vienna, which he attended. Minister Smith stressed the need for flexibility on the manner in which this fund will be administered by Member States. Detailed discussions will take place on this aspect over the coming weeks and the Minister expressed the strong view that these detailed arrangements be finalised quickly.

Concluding, Minister Smith said that the dairy sector and the serious difficulties facing dairy farmers, had received unprecedented attention by the Council of Ministers for the past year and that the package now agreed, encompassing the continuation of intervention for butter and skimmed milk powder and the continuation of Private Storage Aid for butter until August 2011 if necessary, represented a widespread set of measures that should enhance the capability of commercial markets to withstand any further turbulence. Further detailed consideration of medium to long term strategies is currently being addressed by a High Level Group, which will report in June next year.

Date Released: 19 October 2009