Irish and European taxpayers would probably be unhappy with a system where they would pay farmers to do nothing, the Minister for Agriculture and Food, Mr Walsh, said yesterday.
Speaking at the publication of the Department's 2001 annual report, Mr Walsh said this was one of the key arguments he had already advanced against the CAP reform proposals made by the European Commission.
He stressed that there was a long way to go in the negotiations on the Fischler proposals, which propose breaking the link between production and farm supports.
The Minister said he was uneasy with a situation where farmers would not receive aids for producing livestock because this would most certainly lead to a fall in production, which would impact on the food-processing sector.
But Mr Walsh, who is leading Ireland's opposition to the package, said it was far too early to predict job losses of 19,000 people in the sector, a figure put forward earlier in the week by the Irish Farmers' Association.
The Minister, who said last year was a very difficult one for farmers because of BSE and foot-and-mouth disease, said his Department was carefully monitoring the current weather situation.
He said Teagasc had carried out two reports for the Department on weather-related problems which were causing difficulties for farms on heavier soils.
However, 95 per cent of the first cut of silage had already been harvested, and people were getting their hay in this year because they had the machinery to do so.
The Department had secured a number of derogations relating to setaside land to assist cereal farmers, and the Farm Assist Scheme had been amended to allow farmers make claims based on this year's income rather than last year's.
"I know that average rainfall has been higher this year than in previous years, but I am confident that with Teagasc advice and good farming practices, the problems can be overcome," he said.
Despite the problems of last year, he said, aggregate farm income rose by 4.2 per cent, and the average farmer's income, adjusted for inflation, increased by 7.8 per cent.
The latest estimate of the damage to the economy caused by the foot-and-mouth disease outbreak was 0.20 per cent of GDP.
Exchequer costs amounted to €107 million, but this was offset by agriculture-related benefits of around €107 million.
The tourism sector had lost a potential increase in revenue of €210 million.
He said that despite the challenges posed by BSE during 2001, the sector was supported by the purchase-for-destruction scheme and a special purchase scheme which cost the national exchequer €200 million.
Direct payments increased to their highest ever level and stood at €1.4 billion, he said. Sixty per cent of the average income from the farm now came in the form of direct payments.
Mr Walsh promised that the review of the Rural Environment Protection Scheme sought by the farm organisations would be completed by the end of the year.
He also said that there had been no approach yet from the Minister for Finance, Mr McCreevy, for cuts in the Department, but he expected that the negotiations on this would begin in September.