The IFA has presented a number of major changes to its CAP reform proposals to the Department of Agriculture.
The farm organisation now wants Single Farm Payments (SFP) to be significantly altered for farmers whose productivity levels have changed substantially since the last reference period 12 years ago.
The proposal looks for steeper cuts to SFPs for farmers who have reduced output during the intervening period.
At the same time, it supports a marked increase in the SFP entitlement for farmers who can show that their output has increased significantly since 2001.
The IFA believes that measurements such as labour units and stocking rates should be used as objective criteria to distinguish between active and inactive farmers.
"This means that a farmer with a high payment, who is no longer active, would see a greater reduction in their payment than one who has continued high levels of production over the past decade," said IFA president, John Bryan.
"A farmer with a low payment, who has built up their activity since the last CAP reform, would see a higher and quicker increase in their payment than those who have continued at the same low level of activity.
"In this way, we can limit losses to active farmers and limit gains to those who are not producing," added Mr Bryan, who was speaking at the organisation's AGM in Dublin last week.
The latest proposal was tabled at a meeting between IFA officials and the Minister for Agriculture, Simon Coveney.
Originally, the IFA resisted all proposals from the EU to flatten payments and create more even distribution of Ireland's €1.3bn CAP envelope.
However, the stance was generating opposition from farmers with lower SFPs who stood to gain more than €300m under the EU's proposals.
The latest move by the farm body will help neutralise this opposition and galvanise more support by addressing the issue of why payments should vary from under €20/ha to over €1,500/ha.
Analysis by the Department of Agriculture shows that the number of farmers that have significantly changed their level of production since 2002 is in the low single-digit figures.
Mr Coveney addressed IFA council members at the AGM and received a lot of criticism for his cuts to the Suckler Cow Welfare Scheme.
However, he defended the cuts on the basis that 2012 was always going to be the last year for the scheme and that he had protected payments to the average-sized suckler farmer.