The Minister for Agriculture and Food, Mr Walsh, has announced that all payments to farmers from the EU are to be decoupled.
Minister Walsh has opted for full decoupling of livestock and arable premia payments from 2005 meaning that subsidies will no longer be linked to the amount of food farmers produce.
The Minister said that he had given careful consideration to the 200 or sosubmissions which were received under the public consultative processwhich he initiated last July.
A recent independent analysis, conducted by Teagasc economists attached to the Food and Agricultural Policy Research Unit, showed the highest level of farm income would be achieved by full decoupling.
The study showed full decoupling, combined with some changes in agricultural trade policies under the World Trade Organisation (WTO) talks, would lead to a 10 per cent increase in aggregate farm income in 2012.
Today's announcement has been welcomed by the Irish Cattle and Sheep Farmers' Association.
The ICSA vice president Joe Kilmartin said, "the Minister has made the right decision — a decision which reflects the preference of farmers, the realities of the marketplace and the challenge of maintaining a sustainable and competitive agriculture into the future."
Mr Kilmartin said that he is, "delighted and proud that ICSA's longstanding policy for full decoupling has finally been adopted".