The plan, which could see farmers' incomes cut by a fifth over six years, was debated by the EU's agriculture ministers yesterday in Brussels for the first time since being unveiled last week.
Minister Joe Walsh is to set up a consultative group to look at the effects of the proposals, which aim to change the way Europe's farmers qualify for subsidies of about 4 billion euro a year, or half the cost of running the EU.
He said the cuts would cost Irish farmers 136m euro a year. "It would result in a serious reduction in output and consequent dramatic job losses in the processing sector."
The money is to be diverted instead into rural development, but Mr Walsh questioned whether farmers would benefit.
The plan proposes giving a annual fixed sum to farmers rather than giving them a direct payment based on the number of cattle they have.
But Mr Walsh was not sure European taxpayers would tolerate this for long. "People will question the morality of paying people to do nothing in the medium or longer term," he said.
Mr Walsh told his fellow ministers he would fight to ensure any changes to CAP did not negatively affect Irish agriculture or the food industry. His stance was echoed by Spain, Portugal, Greece and Italy and the biggest beneficiary of CAP, France.
But some of Europe's paymasters Germany, Sweden, Netherlands, Britain, Austria and Finland are lined up to try and push through the reforms, which will be negotiated over the next nine to 12 months.
Farming groups are equally split, with the Irish Farmers Organisation and the ICMSA adamant that there should be no change in the present system until the end of this phase of CAP in 2007.
They warn that paying farmers on the basis of the land they own rather than the number of cattle will mean they will give up rearing beef, and this will put processing factories out of business.
Following yesterday's meeting IFA president John Dillon said: "Minister Walsh has to reject this out of hand." Mr Dillon is to visit the farm organisations in a number of countries over the next few months to lobby for support.
However, the Irish Cattle and Sheep Association says that the IFA's concerns are unfounded. Their president, Charlie Reilly, said that for the first time CAP would favour producers, with positive, knock-on effects for the consumer.
The ministers will meet again in October and there will be a three-day meeting in November when the EU presidency, Denmark, will try to get some agreement before negotiations are completed with the candidate countries.
However, Mr Walsh said he believed the debate will continue for at least a year.