Revised CAP proposals which will severely damage the value of Irish milk quotas are to be put forward in the new year by the EU Agriculture Commissioner, Mr Franz Fischler.
It was learned from Commission sources last night that Mr Fischler has decided the base years for determining the new single payment to farmers when CAP is reformed will be 2000, 2001 and 2002.
These years will form the basis for the single payment which Mr Fischler plans to make to farmers on an annual basis when he brings forward his plan to break the link between production and direct payments.
The reference years will determine at what level the new payments will be pitched and this should create no difficulties for Irish agriculture.
However, the farm organisations are bound to be unhappy with Mr Fischler's plans to change the EU milk quota system.
According to Commission sources, Mr Fischler plans to begin cutting EU export refund and intervention supports for the dairy industry in April 2004.
He also plans, according to well-informed EU sources, to increase the volume of milk which Europe's farmers are allowed to produce.
This would have the impact of devaluing the current quota system under which Ireland's dairy farmers are allowed to produce 1.2 billion gallons annually.
Described as "a licence to produce", interference with the national limits is likely to create severe difficulties for Ireland's 30,000 dairy farmers.
While Ireland's farmers have constantly railed against the milk quota system because it limits production, it increases the value of the milk produced.
The proposals, part of the latest attempt to reform the Common Agricultural Policy ahead of the World Trade Talks, will be opposed by the Irish agriculture sector.
The Government has said the proposals already announced by Mr Fischler go too far too soon in reforming the CAP, which was to have remained in place until 2006.
However, the enlargement of the Union and the stresses which that will place on the EU budget has forced the changes, according to Mr Fischler.
He has said he is also reshaping the CAP to protect it from assault in the world trade negotiations which being next year.