and EU agriculture commissioner Phil Hogan has sanctioned a temporary reintroduction of cuts to milk production in the EU in response to falling prices in the dairy sector.

Under a proposal agreed at a meeting of EU agriculture ministers in Brussels, the European Commission will allow member states to curb milk production on a temporary and voluntary basis, but it stressed that this did not signal a return to EU milk quotas which were abolished last year.

Response

While the Government was strongly against any changes to milk supply as a response to the crisis in dairy prices, Minister for Agriculture

Simon Coveney

said he welcomed the fact the new measure would be voluntary and not draw on EU funding.

"[They] do not constitute a return to quotas and both the commission and the presidency were crystal clear on this point," he said, adding that he did not expect Ireland to participate in the scheme.

The move to allow member states to cut milk production comes amid intense pressure from France, which has called on the European Commission to intervene to tackle the slide in milk prices.

Farmers across the EU have seen a sharp fall in milk prices, partly due to the abolition of quotas last year.

Speaking from Brussels, Irish Farmers' Association chairman Jer Bergin said Mr Coveney must reject the notion that progressive Irish and European dairy farmers are the main cause of the dairy market imbalance. He said the downturn was due to a multitude of global demand – China, Russia, low oil prices – and supply factors, which have coincided with the end of milk quotas.

With the cost of production in Ireland put at 25 cent a litre before labour costs, many farmers are now only breaking even on milk.

Ireland, Britain, Denmark and the Netherlands were among those who opposed any changes to milk supply as an answer to the price crisis.

Other measures agreed yesterday include the doubling of the intervention ceilings for skimmed milk powder and butter.