REACTION: The Minister for Agriculture, Mr Walsh, yesterday urged the main farm organisations to study the new CAP reform agreement carefully because it was balanced and necessary.
Declaring that it was "a road map for the way ahead" and would bring an end to the farming of subsidies, Mr Walsh said it represented a major shift in policy for the years ahead.
He was speaking after a storm of criticism from the main farm organisations, which claimed that the cuts proposed in milk-marketing supports would drive many dairy farmers out of business.
The Irish Farmers' Association said the 19 per cent cuts in butter supports would cost the average Irish farmer at least €5,000 a year.
"The deal will cut producer milk prices by 21 per cent by 2008, but compensate for only 60 per cent of the cuts suffered, so that, allowing for production costs, dairy farmers would lose over 25 per cent of net profits by the end of the period," said Mr Michael Murphy, chairman of the organisation's dairy committee.
Mr Murphy also stressed that the new quantitative restrictions on butter intervention limiting purchases to 70,000 tonne in 2004, down to 30,000 tonne from 2007, would have a price impact, and no compensatory mechanism to deal with this had been provided in the deal.
"The challenge now is down to the dairy industry and the Irish Dairy Board. It's clear that butter and SMP are not going to pay.
"The industry must get its act together to change their product mix and get into markets that will give dairy farmers a viable income," he added.
Mr Pat O'Rourke, president of the Irish Creamery Milk Suppliers' Association, claimed the dairy sector would lose €113 millon annually, and milk prices would reduce by 6.3 per litre (22p per gallon).
Mr O'Rourke said that, taking account of the level of losses suffered by dairy farmers, the cut in market support, further losses due to intervention ceilings and the loss due to a drop in calf and weanling prices, dairy farmers faced a cut of over 30 per cent in their incomes.
Mr Donal Cashman, president of the Irish Co-operative Organisation Society, noted that the negotiations had achieved about 81 per cent compensation for the additional 4 per cent price cut.
However, he said, it was important to clarify that, overall, the compensation for the 19 per cent price cut was equal to about 58 per cent compensation, not 81 per cent.
He said the deal was a severe disappointment and would be very damaging to the milk sector
The Macra na Feirme national president, Mr Thomas Honner, said the new CAP reform deal had the potential to change the face of Irish and European agriculture.
He said that because it gave member-states so much autonomy on decoupling, there could be a serious distortion of EU markets.
"Because member-states can choose to support specific types of production, similar producers in other member-states could be disadvantaged," he said.
Support for Mr Walsh came from the Irish Cattle and Sheep Farmers' Association which said the deal represented the best possible result for Ireland.
The president of the ICSA, Mr John Deegan, said the Minister had succeeded in negotiating for Ireland an opportunity that would save the vital €1 billion annual support payments for the livestock sector.
He urged farmers to support full decoupling and said it would save them €420 million which the Commission had sought in direct income supports in the original agreement.