Ireland could find itself in a central position next January attempting to find a reform of the Common Agricultural Policy (CAP) if farm talks which begin today in Luxembourg break down.
No one was certain last night if the French, whose President, Mr Jacques Chirac, threatened last weekend to veto the Fischler reform package, want an agreement before the opening of World Trade talks in Cancun, Mexico in September.
EU Agriculture Commissioner Dr Franz Fischler's reform package was aimed at reducing the EU's exposure in the World Trade talks by refocusing direct supports to farmers away from production in negotiations led by the United States.
But President Chirac's hard line of last weekend was reinforced yesterday by his Minister of Agriculture, Mr Hervé Gaymard, who reaffirmed his opposition to any cuts in cereal and milk supports by the EU.
This has led to speculation in Luxembourg that the talks, which were adjourned last Thursday until today, will resolve the outstanding issues in hours or will be abandoned.
The Commission has threatened to remove the CAP reform package completely from the table rather than continue negotiations into the Italian presidency of the EU which begins at the end of this month.
This would mean that there would be no reform before the World Trade talks in September next and that it would be almost impossible for Mr Fischler to restart the reform process before January when Ireland takes over the EU presidency.
Commission sources in Brussels last night said it was possible that agreement on a reformed farm package today may not be the ultimate objective of the French, who have been suffering severe trade losses since the second Gulf War because they refused to back the US-led coalition.
"The French may be looking at a bigger trade picture and the possible levers they might use against the US in the WTO," said one source last night.
Meanwhile, the Minister for Agriculture and Food, Mr Walsh, the EU's longest-serving agriculture minister, arrived in Luxembourg last night determined to get the best possible deal for Ireland in the reformed package.
He has been supporting French and Spanish opposition to the size of the cuts in direct and marketing supports on milk and cereals being proposed by Dr Fischler. However, like many of the Agriculture Ministers, Mr Walsh, has conceded that the central plank of the Fischler reform, breaking the link between direct farm supports and production, has been amended sufficiently over the past two weeks of negotiations to merit implementation in consultation with the farm organisations.
Dr Fischler has succeeded in amending his "decoupling" proposal to an acceptable level and has put the onus on national governments to implement their own form of decoupling, involving up to 30 per cent of national production.
The Irish farm organisations have continued to oppose the proposed cuts in butter intervention and other milk price supports unless full compensation is paid in return.
The Irish Farmers Association president, Mr John Dillon, urged Mr Walsh to reject the deal on the basis that no deal is a better deal than a bad one.
The Fine Gael spokesman on agriculture, Mr Billy Timmins, urged the Minister to get the best deal possible for Irish farmers but said the uncertainty which has marked the last year since the CAP reforms were first muted, must be ended to allow farmers plan for the future.