Franz Fischler Announcing more CAP reform
The production of beef and sheep meat here is expected to fall by 12% because of the new changes to the Common Agricultural Policy. However, prices are expected to rise eventually after an initial decline.
Mr Fischler intends to change the system of paying farmers according to the number of animals produced or acreage planted. Instead, they will be given a single payment per year.
The Minister for Agriculture Joe Walsh, this afternoon released the results of a study about the impact of this move on this country.
The results, which have been widely circulated in recent weeks, show that beef and sheep production will fall by 12% by 2010.
Cattle prices would initially fall by 8% next year but there would be an overall increase of 8% by seven years' time. Sheep prices would fall by 15% initially, but would then rise by 21%.
Aggregate income by 2010 would be 11% higher than if there were no policy change. The reduction in output would be more than offset by a significant cut in input costs - resulting from fewer animals and more extensive production.
The report estimates that the Irish suckler cow herd, which produces beef animals, will decline by 30% - compared to 18% for the rest of the EU.
Beef exports here would fall by 12% by 2010 but its hoped there would be more likelihood of finding EU markets for Irish beef.
Cereal production would fall by 4% here but there would be little effect on prices.
