The decision to break the link between farm production and direct payments by the State will lead to dramatic changes in Irish farming over the next decade, it was predicted yesterday.
The Republic opted for the most radical of the reforms left on offer to it by the EU Commission last July, when the outline of the CAP reform package was agreed in Luxembourg.
The decision was described as "historic" by the Irish Cattle and Sheep Farmers' Association, which was the first Irish farm organisation to support "full decoupling". It said the decision had reflected the preference of farmers, the realities of the marketplace, and the challenge of maintaining sustainable and competitive agriculture.
Irish Farmers' Association president Mr John Dillon said the decision removed the uncertainty that faced farmers, would allow them plan for the future and reflected the groundswell of farming opinion on the issue.
He said the beef industry would have to work towards fulfilling the needs of quality markets in the EU at higher prices.
But the Irish factories represented by IBEC warned the move would cost 1,000 jobs in Irish factories and as many more in the service sector as both production and quality would fall as farmers exited the industry.
Mr Ciarán Fitzgerald of IBEC said the move had dramatically reduced the value of the industry, would stunt investment and had created a policy vacuum as to the sector's future.
Opposition also came from Irish Creamery Milk Suppliers' Association president Mr Pat O'Rourke, who had advocated the retention of the slaughter premium linked to production.
He said that small farms producing young animals, who sold their animals before they were entitled to draw their premiums, had been rewarded for the loss of those premiums by the farmers who purchased the animals. This would no longer happen and they stood to lose millions of euro.
The president of the young farmers' organisation Macra na Feirme, Mr Thomas Honner, welcomed the move as the preferred option for his members.
Mr Tom Hayes, Fine Gael junior spokesman on agriculture, said the fact that subsidies would no longer be linked to the amount of food produced meant that Irish farmers could concentrate on developing high-quality produce.
Decoupling: what is it?
Decoupling, or breaking the link between farm production and EU subsidies, was at the centre of the CAP Reform package agreed in July.
It proposed paying farmers a single annual payment not linked to production based on the average payments they had been paid in the years 2000, 2001, 2002.
In return, farmers must now maintain land in "good agricultural condition" and meet a series of EU standards in relation to the environment, food safety and animal health on the livestock they keep.
An independent report has predicted that, following full decoupling, 10 per cent of Ireland's beef farmers will totally destock their land and dairy farm numbers will drop to 18,000 from the current 26,000 by 2012, but both beef and milk price increases and the need for lesser inputs will maintain farm income.