The European Union brokered a sweeping reform of its subsidy-laden Common Agricultural Policy today, but farm ministers were divided on the implications of the deal with both pro-reformists and conservatives claiming success.
EU Agricultural Commissioner Dr Franz Fischler said the agreement would revive the mired Doha round of World Trade Organisation (WTO) talks.
Dr Fischler said: "We're sending out a message to the world that we have a more trade-friendly policy. We are saying goodbye to a policy that used to distort trade,"
"This is the biggest change to the Common Agricultural Policy since it was incorporated. . . . It will give stability and security to farmers in the next decade," the Minister for Agriculture and Food, Mr Joe Walsh, said.
But the Irish Farmers' Association president, Mr John Dillon, was less interested in the deal's historic significance, describing it as "a savage blow".
He said the deal is good news for the USA, Australia, New Zealand and South Africa but that Irish dairy farmers in particular will be severely affected.
"The dairying cut is very, very serious . . . dairy supports will be almost totally eliminated by 2008," Mr Dillon said. He said the implications for beef farmers could not be clearly determined but that the effect in the sector would not be as significant.
He has called a meeting of the Association's national council for Monday to decide on a strategy "to salvage something" from the deal and is urging farmers to contact their local TDs to vent their disapproval.
He warned: "If there's anything that can be done we will do it. Minister Walsh will feel the heat".
Mr Pat O'Rourke, president of the Irish Creamery Milk Suppliers' Association criticised Minster Walsh for failing "to defend Ireland's vital interest in the dairy sector".
He said: "This is a sell-out . . . as it will mean a cut of at least one-third of dairy farmers' incomes".
But Mr John Deegan president of the Irish Cattle and Sheep Farmers' Association said the deal "represents the best possible result for Ireland".
Macra na Feirme national president Mr Thomas Honner spoke cautiously about the new deal, echoing concerns about dairy farmers.
He urged Minister Walsh to consult with the farming social partners and move quickly on plans to formalise all important decoupling arrangements. Decoupling is the replacement of production subsidies with direct payments to farmers calculated on income.
"For the last year farmers have been postponing business decisions in anticipation of this reform. We must avoid a further period of second guessing-we need certainty so that farmers can plan ahead," Mr Honner said.
The deal abolishes most production subsidies in favour of more direct payments to farmers and will have huge ramifications for the global trade in agricultural produce.
The €44 billion CAP - half the whole EU budget - and is seen as one the most potent interventions in global trade by any state or bloc.
With 10 states due to join the EU next year, it has been understood for some time that the current system is unsustainable. The need for agreement had gained further urgency as a new round of international talks aimed at liberalising global markets begins in September.
Mr Fischler had expressed concern that failure to agree on CAP reforms would jeopardise the prospect of the United States and Japan giving ground at the World Trade Organisation (WTO) talks, in Cancun, Mexico.
Agreement came this morning when Mr Fischler agreed to water down a key element of his plan - the breaking of the link between subsidy and production - which has been blamed for causing the wine lakes and butter mountains of previous years.
"The decision that has been taken is the beginning of a new era. On the basis of these rules, the CAP will be very different," Mr Fischler said.
But his decision not to cut prices for key cereals such as wheat, barley and maize but cut a third off prices for dairy produce favoured France - the largest monetary beneficiary from CAP - over Ireland - the largest per capita beneficiary, with more than twice the EU average in CAP subsidies.
Comhlámh, the organisation which campaigns for more equitable trade between developed and developing countries, gave a muted welcome to the news: "The CAP deal will bring a little relief to developing countries, but not nearly as much as it might had Commissioner Fischler's plan not been watered down by EU farm ministers, including Joe Walsh".