The Irish Farmers' Association (IFA) has warned that the current CAP reform proposals are unacceptable as negotiations in Brussels over new requirements for farmers are expected to stretch into a third day.

The reforms broadly seek to embed a stronger climate and environmental component into how CAP money is spent, as well as to ensure that the spoils are shared more evenly among smaller farms.

Last year, the overall CAP budget was set by EU leaders at €270 billion, roughly one third of the EU's overall seven-year budget.

Following last July's budget agreements Ireland secured €10.73 billion in CAP payments, a small increase in the previous seven-year budget round, which stood at €10.68 billion.

However, intense negotiations are under way this week between the European Parliament, member states and the Portuguese presidency of the EU to work out how far the overall CAP funds should have to comply with environmental goals and the aim of protecting smaller farms.

At issue are the questions of new eco-schemes which farmers will have to comply with in order to qualify for basic, or direct, payments, and "convergence", or the extent to which smaller farms can catch up with larger ones in terms of their levels of CAP payments.

The European Parliament wants to ensure that 30% of basic payments under the so-called Pillar I of CAP are conditional on farmers carrying out new environmental work.

Member states are pushing for 20%, while the Portuguese presidency has put forward a compromise of 25%.

Meanwhile, the European Parliament is seeking to ensure that 100% of payments under Pillar I comply with the national payment average, in order to redistribute money between larger and small and medium-sized farms, while member states have suggested a target of 75%.

In the last round of CAP reforms the figure stood at 60%. It is understood that France, Spain and Belgium are proposing that 85% of payments converge with the national average.

The current average farm entitlement is €184 per hectare, rising to €260 per hectare once greening entitlements are factored in.

Officials say that 100% "convergence" would see the new entitlement value of €172 per hectare.

IFA President Tim Cullinan said: "This is very serious for Ireland. These new requirements will shift a substantial amount of money. We're saying the Minister [for Agriculture Charlie McConalogue] has to walk out of this tonight. He can't agree to what's on the table. It would be totally unacceptable."

He added: "The problem we have with the budget is that farming is being asked to do a substantial amount of work now on environmental measures, where prior to this it was money to compensate farmers to produce cheap food for the European consumer. The dial has completely changed on this."

Minister McConalogue said: "The key objective from my point of view and from Ireland's point of view is to ensure that farmers' incomes are central to how the next seven years evolved, and indeed that we see farmers' incomes enhanced, so that where farmers will be asked to do more they're also paid more and there are income streams to match that."

The broader rural development fund of Pillar II will be negotiated at a later date.