Decoupling offers two bad years before a pick-up
However, three out of ten sucklers would have been culled by then, according to the study commissioned by Agriculture and Food Minister Joe Walsh of the effects decoupling might have on Irish agriculture.
If the Fischler proposals were approved, the Irish suckler herd would decline by 30%. The total EU suckler herd would decline by 18%.
By 2010, Irish beef production would have fallen by 12% and total EU production by 6%.
Irish cattle prices would fall initially (by 8% in 2004 and 5% in 2005), as suckler cows are destocked. As supply falls, prices would then recover, and would be 8% above the unreformed CAP baseline by 2010. EU prices would be 6% above the baseline by 2010.
Irish beef exports would fall by 12% relative to the baseline by 2010. However, there would be an EU market for 95% of these exports.
The predictions are made by the FAPRI-Ireland Partnership of Teagasc, a consortium of Irish Universities, and the Food and Agricultural Policy Research Institute at the University of Missouri in the USA.
They predict that decoupling of sheep direct payments would cut Irish ewe numbers and sheepmeat production. After an initial price decline, sheep prices would increase to a higher level than would be the case without CAP reform.
Having fallen 15% in 2004, sheep prices would recover to 21% above the baseline by 2010. Exports would have fallen by 3%. The findings are subject to various assumptions and qualifications.
Less dramatic effects on the cereals sector are predicted, but there would probably be some reduction in production. Total Irish farm income would decline initially, by 5% in 2004 and 3% in 2005, but would recover to reach 11% above the baseline (no policy change) by 2010.
