Irish agriculture minister Joe Walsh announced that all direct payments for cattle, sheep and arable crops will be fully decoupled from production by January 1, 2005.
More than 200 public submissions were considered, along with independent research and the views of individual farmers, the majority of whom supported full decoupling.
Walsh said that in the final analysis, he had based the decision on what he saw as the best interests of Irish agriculture and the development of a sustainable, market-orientated agrifood sector.
The move will leave farmers free to focus more sharply on the market and the demands of the final consumer, he said.
While some reduction in production could be expected, he said he was satisfied that the resulting increase in prices and reduced costs would lead to an increase in farm incomes.
“Farmers will have the cushion of Single Farm Repayments decoupled from production and incomes can be enhanced by more market-orientated production.”
The news was welcomed by Bord Bia, the Irish Food Board. Chairman Philip Lynch said the move would give the Irish beef industry the chance to continue expansion in Europe.
Irish beef exports to the continent were set to increase by 25% this year, with further growth expected from 2004 onwards.
He said: “The decision will lead to improved market transparency, clearer signals to producers and the opportunity for the Irish beef industry to build on its undoubted strengths in the European marketplace.”