The number of people imprisoned in Ireland has increased by almost 3%, the justice minister said.
There were 16,155 prison committals last year, the vast majority of which were men.
The cost of incarceration also increased to almost €69,000 per inmate. The prison service said this was because less space was available.
Minister Frances Fitzgerald said: “Despite a small increase of 2.7% in the total committals to prison, the overall daily average number of prisoners in custody has continued to fall.
“The overall daily average number of prisoners in custody in 2014 was 3,915 compared to 4,158 in 2013, a decrease of 5.8%.”
The prison service said the rise in the numbers in custody was due to more people refusing to pay court-ordered fines – opting instead for short sentences.
The minister announced a review of drugs and alcohol policies and services in prison.
A survey conducted by the Probation Service and published in 2012 found that the number of adult offenders on probation supervision who had misused drugs and/or alcohol stood at 89%.
Ms Fitzgerald said: “We know too well of the devastating impact of the misuse and abuse of alcohol and drugs.
“Too many lives, too many opportunities are broken by addiction and resultant high-risk behaviour. Tackling drugs in prison and among offenders on probation must be a top priority.
“Enforcement is one approach which we are pursuing. But improved addition services for offenders are also vital.”
The minister reaffirmed her commitment to eliminate, in so far as possible, the option of imprisonment as a sanction for non-payment of fines.
She said legislation should reduce the number of committals. The system will be in place from October this year.
“My view on penal policy is simple: I believe that serious and repeat offenders must continue to be imprisoned. There is a societal imperative underpinning this goal,” Ms Fitzgerald added.
“But I equally recognise the proven potential of supervised community sanctions to reduce reoffending, thereby reducing crime.
“We therefore need a balanced and co-ordinated approach to offender management, recognising the need for a continuum of sanctions and services. Inter-agency working is critical.”