MINISTER FOR Agriculture Brendan Smith has said Ireland could not have got a better deal on the Common Agricultural Policy than the one reached by EU ministers in the early hours of Thursday morning.
Mr Smith said the compromise would deliver about €170 million in aid to Irish farmers over the next five years.
"We wouldn't have got better, that's the reality. These negotiations have not been easy, they have been extremely difficult for Ireland," he said after the meeting in Brussels.
Farm organisations in Ireland, however, reacted negatively to the deal.
Ministers agreed to increase milk quotas until they are removed in 2015, reduce direct payments to farmers in order to shift more money into rural development schemes (what the commission calls "modulation") and abolish compulsory "set-aside" so that farmers will now be able to produce on every part of their land.
The package of measures, called the "Cap health check", will take effect in 2009 and last until 2013.
It follows major reforms made to the policy in 2003.
Mr Smith said he expected a mixed reception to the news at home, but that it was "a very good deal for Irish farmers".
"This is enormously positive for the sector and, while there are also some elements in the package that I do not like, such as increased modulation, I have ensured that this will not lead to any loss for Irish farmers."
Milk quotas will go up by 1 per cent every year until 2015, a move opposed by several member states, including France, Germany and the UK.
Although the figure is less than the amount the Government was pushing for, Mr Smith said the market intervention schemes retained for butter and skimmed milk powder could make up part of the deficit.
The percentage of funds being diverted from subsidies to countryside development will rise to 10 per cent by 2013, and while it is not as high as the commission's proposed 13 per cent hike, Ireland had opposed any increase.
However, said Mr Smith, ministers agreed that all the money diverted would be ploughed back into on-farm activities, which would generate a total of €120 million for Irish farmers.
He said the Government would be going back to interested bodies to discuss how to spend the funds.
The EU also agreed to release unspent aid to member states to help out economically or geographically vulnerable sectors.
In Ireland's case, this means about €23 million will flow to Irish farmers, although "the final amount could be significantly higher", he added.
EU agriculture commissioner Mariann Fischer Boel said she was happy with the agreement.
"I'm pleased we managed to find a compromise which preserves all the principles of our original proposal," she said.
"The health check is all about equipping our farmers for the challenges they face in the upcoming years, such as climate change, and freeing them to follow market signals.The changes agreed represent a major step forward for the Cap."
Other measures in the overall package agreed on include bringing forests under the single-payment scheme, exempting the first €5,000 of farmers' subsidies from modulation and scrapping the requirement that 80 per cent of entitlements be used in one calendar year before a transfer without land.
Also written into the agreed text is a commitment by the European Commission and council to review how direct payments are to be made after 2013.
This is an effort to placate newer member states who feel that agricultural aid is divided up unfairly across the 27-member bloc.
Agreement on the various elements of the package was not unanimous but was secured by a qualified majority.