A new report predicting an 11.8 per cent decline in agricultural output and a decline of 13 per cent in farm numbers in the next five to seven years has been criticised by the Irish Farmers Association.
Compiled by Trinity College economists Prof Alan Matthews and Dr Janine Dixon, the report, which formed part of the ESRI quarterly economic commentary, predicted farmers would move away from beef, sheep and cereal production.
In the new decoupled era, the report said, farmers would look to other areas of land use such as forestry.
The report predicted the output of cattle would fall by 14.4 per cent, sheep by 15.5 per cent and cereals by 41.5 per cent over the years of the Cap reform package which runs to 2013.
The authors predicted the resources from these sectors would move into the production of pigs, poultry, horses, fruit and vegetables, other crops and forestry.
Their short-term prediction was that over the next two years total agricultural output would fall by 5.6 per cent, and the labour input on farms by 11.8 per cent.
In the longer term the report projected a fall in total agricultural output of 9.4 per cent and a fall in labour input of 12.9 per cent.
However, the economy-wide impact of the changes were predicted as minimal, with a small positive impact on gross domestic product (GDP) of 0.03 per cent.
The authors said this reflected the fact that primary agriculture now contributed less than 2.7 per cent to the Irish GDP.
The broad findings of the report was attacked by IFA president Pádraig Walshe, who said it diminished the importance of agriculture to the economy.
He said the dependence of the rural economy on agriculture continued to be very significant and would be witnessed when a downturn took place in construction.
Deputy Martin Ferris, Sinn Féin's spokesman on agriculture, said the Government needed to promote new strategies that would sustain rural communities through food production and processing.
It should also encourage the introduction of energy crops to sustain farms and provide off-farm employment.