Irish farmers' incomes would drop by 15 per cent by 2010 if EU export refunds - subsidies paid on exports to non-EU countries - were removed, predicted Teagasc, the agriculture and food development authority. And Irish farmers, because they export so much of what they produce, would be worse affected than producers in other EU countries.

Teagasc economists say the beef and dairy sectors, which account for 70 per cent of output, would be the major casualties because these sectors benefit most from the subsidies.

They also say that the biggest long-term problem for the Irish beef sector is the presence of BSE. And even if there are no further cases in the EU, the beef market will remain "difficult and volatile" for the next three years, with consumption depressed and pressure on prices. This situation is not helped by the build-up of stocks of meat in EU intervention storage.

The economists say in their 10-year outlook on the agriculture and food industry that reductions of between 21 per cent in the tonnage qualifying for subsidies and 36 per cent in the level of refunds - as happened in the last Uruguay Round of the World Trade Organisation (WTO) agreement - would have a lesser impact on prices and incomes than complete removal. But most economists believe these reduction levels are the minimum that would be acceptable in the next WTO round.