The Minister for Agriculture, Mr Walsh, told EU colleagues yesterday he is "dismayed" by a European Commission paper on budgetary reform which suggests that national governments should bear a quarter of the cost of direct aid to farmers.
Mr Walsh told the EU Council of Agriculture Ministers that this could undermine the foundations of the European Union.
The controversial paper overshadowed a meeting in Luxembourg yesterday called to advance negotiations on reforming the Common Agricultural Policy (CAP) in preparation for EU enlargement to central and eastern Europe.
EU officials now fear the so-called Agenda 2000 proposals, which include cuts of up to 30 per cent in food prices to make EU farm exports competitive on world markets, and which are supposed to be in place by next March, may fall victim to a protracted wrangle over the size of member-states' contributions to the annual budget.
Ireland and France would be worst hit by the proposed move to agricultural "co-financing", the EU jargon for hiving off some of the cost of farm support to national budgets.
In Ireland's case the annual additional cost to taxpayers which the proposed changes would imply is estimated at £150 million. Mr Walsh attacked much of the detail of the Agenda 2000 reforms, telling the Council of Ministers that "major Irish economic interests are at stake here" and that "radical changes" would have to be agreed before any of it would be acceptable to an Irish Government.
But he went much further on the budgetary reform plans, warning that they represented the first step on the road to the dismemberment of the CAP, a policy which had provided the EU with its "cement" for over 40 years.
"The Common Agricultural Policy has been built up over 40 years on three central principles - market unity, Community preference, and common financial responsibility. It has contributed enormously to the solidarity which has been the cement of the Community," Mr Walsh said.
"We should not begin to dismantle what has been achieved in order to provide a partial answer to a problem which goes far beyond the Common Agricultural Policy," he added.
The Minister used the present crisis on the Irish beef market, caused by the Russian economic turmoil, to demonstrate to colleagues the extreme vulnerability of Irish agriculture to external developments and to explain the Government's rejection of "detrimental" reform proposals in the Agenda 2000 package.
Calling for a special EU export refund regime for Russia, Mr Walsh outlined details of the grave crisis facing Irish beef farmers. He said prices were lower than at any time even during the BSE crisis and that a backlog of 40,000 steers on farms was growing at the rate of 10,000 animals a week.