The current cycle of the Common Agricultural Policy (CAP), which began in 2023, has had a "relatively modest" impact on farm incomes, according to Teagasc.

This view came in a submission document from Teagasc on the proposals for the next CAP, which are set to be negotiated over the next year and come into force from 2027 as part of the wider Multiannual Financial Framework (MFF), the EU's seven-year budget.

The Teagasc document noted that CAP budgetary expenditure is a key part of Ireland's national receipts from the wider EU budget.

It also highlighted the likely negative impact that a reduced budget for the CAP would have on Ireland's receipts from the bloc's broader expenditure across for that seven-year period.

The submission document highlighted the importance to Irish agricultural and farm incomes of CAP-funded direct income support payments under Pillar I and Pillar II of the CAP.

The document also noted that this importance varies by region and by farm system.

Impact on farm incomes

The analysis referenced in the Teagasc submission is based on Teagasc National Farm Survey Data as well as administrative data from the Department of Agriculture, Food and the Marine (DAFM).

Teagasc said that the analysis of the last reform cycle, implemented in 2023, found that the impact on farm incomes was relatively modest.

This was in part due to the fact that the budget for the CAP for Ireland was largely stable as compared to the previous planning period, the document said.

According to the submission, the current CAP reform proposals, in addition to proposing changes to how direct income support payments budgets are distributed across the population of Irish farmers, also proposes to reduce the size of the budget for CAP measures that directly support farm incomes.

"This later aspect of the CAP proposals may lead to more significant (negative) impacts on family farm incomes than were assessed as arising from the last CAP reforms," the document says.

Teagasc said that its Agricultural Economics and Farm Survey Department will, with the co-operation of DAFM, undertake detailed economic analysis in support of national policy objectives and to inform the broader community of agri-food stakeholders about the impact of the proposed reforms and any agreed CAP reform proposals.

This work will take place throughout 2026 and 2027, Teagasc said.