There has been a dramatic drop in the number of ewe premiums being claimed in the Republic since the outbreak of foot-and-mouth.
Latest figures show that the number of applications for ewe premiums fell from 4.49 million in 2001, the year before the outbreak, to 3.8 million this year.
The loss of 600,000 breeding ewes from the Irish national flock between the 2000 and 2002 has puzzled the experts and dramatically increased the number of lambs being imported from Northern Ireland.
The sharp decline in claims for premiums occurred in 2001, when lamb prices began to climb because British farmers could not export because of the disease.
Applications in that year for the £19 (€24) subsidy dropped from 4.49 million to 4.23 million and coincided with the introduction of a strict law requiring every sheep in the Republic to be tagged.
The number of applications fell again in 2002, when the Department of Agriculture and Food received claims for 3.88 million breeding animals.
Teagasc's chief sheep adviser, Mr Gerry Scully, said he believed the decline in the number of animals was policy-driven, and he predicted that numbers would continue to drop because of decoupling, whereby there is no longer a link between direct payments and production. He predicted that many of the State's 35,000 sheep farmers who were older and working in difficult lands in the west would choose to get out of the business.
He said that of the 35,000 farmers still working sheep flocks, 13,000 had fewer than 50 breeding ewes, and he expected such farmers would look closely at their operations in light of the new policies.
He conceded that the drop in the number of applications for premiums between 2000 and 2003 could not be explained by the new environmental regulations which forced sheep farmers to take their ewes off mountains and commonages to avoid degeneration of land.
The most precise check carried out by the Department on the ewe subsidy scheme was in the Cooley Peninsula during the food-and-mouth outbreak in March 2001, when the movement of all animals in the area was banned.
The Department found irregularities in relation to claims on 100 of the 275 farms where animals were culled, and 17 farmers in the area had claimed for 2,000 ewes that did not exist.
The Department's investigators identified 51 farmers who were responsible for nearly 90 per cent of the false claims.
However, in the previous three years when Department officials checked 106 of the 275 flocks involved, having given farmers the requisite 48 hours' notice, they found that all animals being claimed for were on the farms.
A follow-up investigation after the Cooley scandal uncovered irregularities on 4,000 other sheep farms across the State.