The umbrella body for Irish co-operatives has estimated that the Irish agricultural sector will lose £80 million as a result of the euro revaluation, more than twice the estimate put on the loss by the Irish Farmers' Association.

Mr Martin Varley, director of policy development at the Irish Co-operative Society, called for full compensation for the lowering of supports in the agriculture and food sectors because of the "green pound" revaluation.

He said that while the conversion to the euro had positive elements, the green pound revaluation which occurred on January 1st would reduce the pound value of intervention, export refunds and other EU supports for the milk, beef and other sectors.

"Despite Irish requests for full compensation for these reductions, the EU Commission has refused to provide it and this situation must be reviewed in the early months of 1999," he said.

He said the value of the pound/ euro rate, at 78.7564p, was more than 5 per cent below the frozen green rate of 82.9498p to the euro, which had applied to direct payments up to December 31st last.

"The revaluation will reduce the value of direct payments relating to arable aid, beef and ewe premia, farm retirement, REPS and forestry with effect from January 1st," said Mr Varley.

The EU Commission will provide full compensation for the losses incurred by farmers in 1999 but compensation of only twothirds and one-third will be provided in 2000 and 2001 respectively, with no compensation for 2002 onwards.

Mr Varley said it was vital that this issue be urgently reviewed to ensure that full compensation be provided for all years as the combined reduction from market and direct payments could equal £80 million, which is equal to roughly 4 per cent of farm income.

He said the future performance of the euro vis-a-vis other currencies would be an important factor in determining returns from markets outside the euro zone. In this respect, a future decision by sterling to join would be welcome.