Close to €6m could be cut from Ireland's single farm payment (SFP) allocation this year.
The reduction is due to Ireland exceeding its €1.28bn ceiling for the SFP in 2011.
It has been confirmed that a 0.45pc cut will be applied to all SFP entitlements. This would equate to a reduction of €45 on a payment of €10,000. Discussions on the issue are understood to be underway between Department of Agriculture staff and officials in Brussels.
A Department statement said its aim each year was to ensure that the maximum level of SFP payments was made to Irish farmers and that the full envelope allocated to Ireland for the scheme was spent.
"It should be noted that there is no loss to the state's overall €1.2bn envelope," the Department insisted.
"The Department is pursuing this changed accounting requirement with the Commission services and should this approach result in a favourable response, any sums deducted will be refunded," the statement added.