The reform of European farm subsidies will force Irish farmers to be less reliant on them,
European agriculture has been in limbo for the last few months while the most dramatic reform in the history of the Common Agricultural Policy was being hammered out.
The Fischler reforms were eventually agreed on June 26th. These reforms will mean that in the future, farmers will be more market-driven rather than reliant on payments from Brussels.
Dr Fischler achieved this by offering a system of continuing direct payments based on farm production for the past three years.
Decoupling, as it has become known, means a break in the link between what farmers produce and the direct aid, or "cheques in the post", they receive.
The cheques will continue to come but will not be related to the number of animals farmed or the amount of tillage sown. Earliest indications from Ireland's 136,500 farmers is that the majority support full decoupling on the basis that it will end bureaucracy and allow farmers to work their land the way they want.
It is a major decision for the farmers who own nearly 4.5 million hectares of the State's 6.9 million hectares of land. Last year, they received €1.6 billion worth of cheques in direct payments from the EU and the Irish taxpayer before they received a penny for the produce they sold.
Those cheques were worth, on average, €13,000 to each farmer; 36 per cent of that payout went to the top 20 per cent of producers in the sector. Ten per cent went to the bottom 20 per cent.
Those payments will be protected in the new regime but if the farmers opt for full decoupling, they will have to keep their lands in a good agricultural state.
Farmers who want to scale back their operations are delighted with the option. The majority of farmers are over 55-years-old and many welcome the opportunity to cut back on their workload.
While the Irish Farmers Association had opposed full decoupling and wanted farmers to retain 50 per cent of current production to qualify for the single payment, it too is beginning to see the benefits.
The main benefit will be the end to form-filling.
A single annual payment will be made to qualifying farmers for the 40 schemes which are currently available.
The only sector which will really suffer in the reform will be the dairy producers, now down to 26,500 players. However, they received a guarantee that the milk-quota system will remain in place until 2014/2015. Dairy farmers will also receive compensation in the form of a payment for their dairy cows.
Dr Fischler achieved his agreement by allowing member-states to decide for themselves whether they would opt for full or partial decoupling.
While the full legal text of the agreement has yet to be finalised in Brussels, the Minister for Agriculture, Mr Walsh, is giving members of the public an opportunity to voice their opinion on whether Ireland goes for full decoupling.
He recently told an Oireachtas Committee on Agriculture that the decoupling issue was not just a matter for farmers, because it would have an impact on jobs, the environment and many other areas of life in Ireland.
A report compiled by Teagasc and the Food and Agricultural Policy Research Institute on the impact of full decoupling on agriculture here found the number of beef-producing cows would fall by 30 per cent and beef-production would fall by 12 per cent by the year 2010.
Initially, it predicted a fall in cattle prices of up to 8 per cent in the first year of the agreement but prices would recover and increase by 8 per cent by 2010.
The impact would be similar in the sheep area, with a predicted decline of 12 per cent in ewe numbers and output by 2010, the report said.
However, following an initial fall in value, the prices would recover and increase by 21 per cent by 2010.
It also predicted a 4 per cent decrease in cereal production here if full decoupling was achieved and that 10 per cent of farmers might destock and leave their lands fallow.
Another report from the Food and Agricultural Policy Research Institute predicted a decline in dairy farmer numbers to 15,000 by 2012 as a result of Common Agricultural Policy reform and pressures from the World Trade Agreement.
However, the Department of Agriculture said the impact predicted in that study had been lessened in the negotiations and the sector stands to lose only €14 million a year.
It is already talking up the opportunities the reforms will bring to Irish agriculture and to the processing sector if farmers and processors are willing to be more flexible and meet the challenges and chase the new markets which will arise.
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