Ireland's agricultural output will fall by 9.4% and agricultural employment will fall by 12.9% over the next five to seven years, according to a new analysis by two Trinity College economists.
In a review of the impact of the introduction of the single farm payment to replace various EU direct payment schemes, Professor Alan Matthews and Dr Janine Dixon conclude that the CAP reforms will also significantly change the allocation of resources within the agricultural sector.
They say there will be a shift away from cattle, sheep, and cereals in favour of other land use activities including forestry. The result will be a reduction in greenhouse gas emissions.
However the analysis, which is published in the latest ESRI Quarterly Economic Commentary, suggests that the effect on the overall economy will be minimal mainly because agriculture now contributes less than 2.7% to Irish GDP.
