The mid-term review of the Common Agricultural Policy was "a policy reform not a policy funeral", the former secretary general of the Department of Agriculture and Food, Mr Michael Dowling has said.
Mr Dowling, head of agri-strategy at Allied Irish Banks, gave an upbeat assessment of the future of farming at a press briefing for journalists.
He said that in the short term farmers could expect to see a greater demand for milk quotas, a greater demand for land but some uncertainty about direct payment levels and entitlements with pressure on the beef market due to more cows being slaughtered.
"The MTR is a policy reform not a policy funeral. Farming has been dealing successfully with policy reform for over 20 years and industry structure has improved over that period and efficiency levels significantly increased," he said. "Aggregate farm income has fallen by 20 per cent; income per farm has risen by 30 per cent in real terms. With policy issues settled, agricultural development decisions are now possible and more rapid restructuring can proceed," he said.
In the longer term he saw the maintenance of current milk and tillage production levels, some drop in beef production, but there would be more flexibility in farming systems, he said.
Mr Dowling, who was the most senior civil servant negotiating the MacSharry reforms in the early 1990's, predicted price increases in beef and lamb and grain prices to follow international trends. He said that while milk prices would fall but by less than the fall in support prices. Milk quota prices would also fall from 2005 but there would be greater freedom to transfer quotas.
Mr Dowling predicted that milk quotas would disappear or become less rigid from 2015, the end of the reform period. However, he expected land values to be maintained with considerably greater scale production.
Mr Dowling said there would be fewer full-time farmers but relatively more part-time farmers in the long term. However, he said, there would be higher individual incomes and less bureaucracy.
He added that farming had been dealing successfully with policy reform for over 20 years and the structure of the industry has improved over that period and efficiency levels have significantly increased.
Aggregate farm income had fallen by 20 per cent; income per farm had risen by 30 per cent in real terms but with policy issues settled, agricultural development decisions are now possible and more rapid restructuring can proceed, he said.
Agriculture, he said, had lagged behind the expansion of the economy but was still a very important sector as it accounted for up to 25 per cent of Irish net foreign earnings.