Irish farmers say proposals contained in the latest review of the EU's Common Agricultural Policy will cost farm income in the State up to €100 million per year.
The review, outlined by Agriculture Commissioner Mariann Fischer Boel today, targets subsidies paid to large farms and questions whether agricultural support schemes have passed their sell-by date.
Ms Fischer Boel's plan seeks to reduce handouts to larger farms, with bigger percentage cuts for higher overall annual subsidies.
She also wants to increase the compulsory modulation levy from its current level of 5 per cent to 13 per cent by 2013.
The levy is the percentage of the subsidies which is diverted into rural development and agri-environmental schemes.
The Irish Farmers Association says the proposed increase in the levy would hit Irish farmers hard and cost up to €100 million annually.
IFA president Padraig Walshe said: "While the Commission is suggesting that part of this cut-back in funding of the EU Single Payment could be recycled to some farmers, this is far from clear, and such rural development and agri-environment measures are likely to impose additional costs on farmers."
"In addition to the cut in the Single Payment due to the increase in the modulation levy, many farmers most dependent on the Single Payment for their incomes, particularly cattle and sheep farmers, would also lose out from the proposal to switch from the current individual farmer payment, based on his past level of production, to an average payment across all the land of the country," he said.
The Commission's review of CAP, also known as the "health check", contains suggestions for limiting the EU's safety-net intervention storage system for cereals, apart from wheat.
"We need to look at whether we need to adjust the CAP for an EU of 27 [countries] and a rapidly changing world. The changes I propose will make a real difference for farmers, consumers and taxpayers," Ms Fischer Boel said.