Dessie Boylan, president, said the proposed 25% cut in milk intervention prices between 2004 and 2008 is a clear breach of the Agenda 2000 Agreement, which is based on a 15% price cut between 2005 and 2007.
“ICOS has estimated that the 25% intervention price cut could reduce the value of the Irish dairy sector by about €400m, whereas the proposed compensation equals about €217m.
“This would expose dairy producer incomes to a reduction of about €183m, equivalent to nearly €7,000 for a producer of 180,000 litres,” he said.
Mr Boylan said the proposals to decouple direct payments also presented serious problems for the sector.
“These proposals break the link with their initial purpose, which is to compensate for price cuts. Mr Boylan said the proposed modulation cuts of 12.5% and 19% represent significant annual cuts in direct payments over the period 2006 to 2012, which will negatively affect farmer’s incomes.
Macra na Feirme president Seamus Phelan said it is opposed in principal to decoupling, as it would lead to payments leaking to individuals who were not actually farming seriously.
“These proposals will suit farmers who want to wind down their farming activity. All supports available through the CAP should go to farmers who are actually producing food,” he said.
Munster Fine Gael MEP John Cushnahan described the proposals as a betrayal of the Agenda 2000 agreement. He said if they were to be implemented in full, the losses to the beef sector would be €300m while the dairy sector would lose €200m.
The Consumer Liaison Panel called on the minister to spell out the full implications of the proposals for the Irish consumer, the taxpayer and for jobs in agriculture.