An analysis of the impact proposed EU CAP reforms - due to be published tomorrow - will have on Irish agriculture is broadly in line with the views published by the Commission itself last week.
The report, compiled by the Food and Agriculture Policy Research Institute, confirms that the breaking of the link between production and direct payments will lead to an overall drop in production.
However, lower production, especially in the beef sector, will trigger a rise in price for producers as the EU's beef herds will shrink by an estimated 11 per cent by 2009.
The estimate that Ireland would lose around 150,000 of its beef-producing cows by 2009 has been confirmed in the FAPRI report. This will also create serious problems for the Irish beef-processing industry.
A report compiled for the Irish Meat Association by Brendan Kearney and Associates late last year said that decoupling, as proposed, would "have a dramatic negative impact on the beef sector in terms of output and exports". It estimated that gross indigenous production of cattle and beef would decline from 656,000 tonnes to 457,000 tonnes, a reduction of 31 per cent.
"The decline in the value of production would be even greater, at €445 million or 32 per cent, due to the higher quality and value of the suckler beef production lost, as compared with beef from the dairy herd."
The report also said that a 40 per cent decline in the suckler herd would lead to a 20 per cent reduction in the number of animals, with a somewhat greater decline in beef production and in the value of output.
While the Commission's impact studies did not deal with sheepmeat, the Irish Meat Association's study said that decoupling would dramatically reduce the number of mountain sheep in the country.
It pointed out that sheep production has been in decline since 1998, with a fall in the national flock from 4.89 million breeding ewes to 4.26 million in 2001 and output declining from 4.05 million to 3.45 million lambs over the same period. It said that the proposal would also have a negative impact on sheep production and processing and could lead to a drop in exports of 25 per cent, with a corresponding decline in the value of exports and employment in sheepmeat-processing.
Ireland is expected to join France and Germany in opposing the decoupling proposal from Dr Franz Fischler, the EU Commissioner, who will announce his proposals on Wednesday.
Last Friday, the French Minister of Agriculture, Mr Hervé Gaymard, said that the reforms being put forward by Dr Fischler would "create more problems that they would resolve".
He predicted that Dr Fischler's plan to break the links between production and direct payments, linking these with good environmental and other practices and increasing payments for rural development, would run into trouble at the World Trade Organisation talks.
Dr Fischler's plan also envisages redirecting payments from 2007, introducing a new farm audit system, new rural development measures to boost quality production, food safety and animal welfare and having one single payment annually.