"We have done it" was the declaration from the European Agriculture Commissioner Janusz Wojciechowski today, as it emerged the EU reached a landmark agreement on the future Common Agriculture Policy (CAP).

The CAP reforms are years in the making, with individual EU member states and the European Parliament struggling to reach a compromise that would satisfy all sides.

Late last month, Minister for Agriculture Charlie McConalogue said that Irish farmers needed this agreement to be reached as time was running short. He also said the "alternative doesn't bear thinking about".

Earlier today, however, the President of the Irish Farmers' Association attended a protest in Brussels opposing the plans.

Tim Cullinan said that a cohort of farmers would be hit by "huge cuts under the CAP".

So, what's in the CAP plans? And why is it causing controversy here?

CAP

The Common Agricultural Policy predates Ireland's membership of the European Union, and has gone through a number of reforms over the years. It has consistently taken up the single largest area of expenditure for the EU Budget.

The CAP is a system of income and market support programmes for the agriculture and rural sectors. Among other measures, it provides direct payments to help sustain individual farms.

In an Oireachtas paper published in 2018, it said the direct payments from CAP "play a critical financial role in maintaining farm incomes in Ireland". However, that report also pointed out there was disparity across different kinds of farms in how much they relied upon the CAP payments.

For three years, negotiators have been locked in talks over the future of the EU Common Agricultural Policy amid calls to mitigate the environmental impact of agriculture across the bloc.

The CAP, worth around a third of the EU's 2021-2027 budget, will spend €387 billion on payments to farmers and support for rural development. The new rules will apply from 2023.

Farming accounts for 10% of EU greenhouse gas emissions, but the 27 EU member states and the European Parliament have squabbled for three years over what to do about it.

Roughly 80% of CAP payments go to 20% of the beneficiaries, mostly big landowners and agro-industrial firms, and the reform is also intended to route more money to smaller farms.

The key parts of the deal include:

Eco-schemes, green standards

The new CAP would require countries to spend 20% of payments to farmers from 2023-2024, and 25% between 2025-2027, on "eco-schemes" that protect the environment, according to a draft agreement seen by Reuters.

The final deal was not published.

Any funds below those limits that are not spent on eco-schemes must be spent on green measures in other areas. Eco-schemes could, for instance, mean restoring wetlands to absorb CO2, or organic farming.

Parliament had wanted a 30% share, while member states' starting point was 20%.

All payments would be tied to minimum environmental rules, such as farmers setting aside at least 4% of arable land for areas where nature can thrive, or rotating crops annually to boost soil health.

Some EU lawmakers said the rules contained loopholes that failed to align farming with the EU's climate targets. Campaigners said the deal lacked a clear definition of an "eco-scheme", thus failing to ensure that money would not go to more polluting farming practices.

National plans

Each country must submit a plan for spending its share of the CAP to the European Commission, which will assess whether it meets legally-binding EU targets.

These could include the bloc's aim to cut net greenhouse gas emissions 55% from 1990 levels by 2030, but are unlikely to include targets that are not yet legally binding, such as halving the use of chemical pesticides by 2030.

Smaller farms

A major goal is to stop the decline of Europe's small farms.

The draft agreement would oblige each EU country to redistribute a minimum 10% of payments to farmers to smaller farms.

Countries could dodge this requirement if they use other methods to distribute the funds fairly - something member states had pushed for in the talks.

Parliament had pushed, unsuccessfully, for an annual cap of €100,000 per beneficiary.

Who counts as a farmer?

The new CAP will limit who is defined as an "active farmer" and can receive subsidies - another attempt to stop large businesses and landowners sucking up money.

Parliament sought a definition that would exclude large-scale processors of agricultural products, and stop funds going to non-agricultural businesses such as waterworks or railway services.

Negotiators had also considered a requirement for countries to hand roughly 3% of farm payments to young farmers, to help attract new talent. A final agreement on this was not confirmed.

Also under discussion were standards for working conditions in farming and a crisis fund in case agricultural markets are disrupted by an emergency such as a pandemic.

What has been the reaction so far?

Before the deal was announced, the Irish Creamery Milk Suppliers Association said that the agreement would make farmers "carry the climate change can" for both consumers and corporations.

The organisation's president, Pat McCormack, said that "putting it mildly" the current CAP Reform has the potential to be a disaster for Irish farmers and the rural economy that rests on them.

With reporting from Reuters