Farmers were badly affected last year by poor weather and the downturn in dairy markets, but significant progress was made on food safety and farming reforms, according to the Department of Agriculture.
Publishing his department's annual report for 2002, the Minister for Agriculture, Mr Walsh, noted the slowdown in the international economy generally and said it had been a difficult year for the farming sector as well.
But Mr Walsh said a series of Government schemes had alleviated the worst impact of the adverse weather and market conditions.
Total public expenditure on the agri-food sector in 2002 was over €2.9 billion. Farmers received over half of this money through direct payments, which totalled €1.64 billion or an average of €13,000 each, the Department said.
Mr Walsh said that 2002 for the farming sector had been "highly significant" in an international context. It was marked by the start of the mid-term review of the Agenda 2000 agreement and saw the introduction of proposals by the EU Commissioner Mr Franz Fischler.
"The Common Agricultural Policy has now been reshaped making it more relevant to modern society and securing its future," the Minister said. "The agreement will strengthen the European Union's negotiating position in the forthcoming World Trade Organisation negotiations."
On the foot-and-mouth threat, Mr Walsh said an independent economic evaluation published in March had highlighted "in very stark terms" the extent of the threat, not only to the agriculture sector, but to the economy in general. The report said widespread outbreaks of foot-and-mouth could have reduced GDP by €5.6 billion, or almost 6 per cent.
The Minister also said measures to ensure food safety were further strengthened during 2002 - particularly with the introduction of animal-traceability schemes.
On the beef and dairy sectors, he said Irish beef would have to "move up the value chain" within the EU and gain a greater spread of markets. "Quality of products must be both encouraged and rewarded," he said.
The Irish Farmers' Association is expected to comment on the report later today.