There will be no new AEOS programme in 2014 despite up to 13,000 farmers coming out of REPS 4 this year.
Early discussions on the Budget proposals suggest that the Minister for Agriculture, Simon Coveney, will not bring in a new environmental package next year, but will wait until the new CAP package comes into effect from January 2015.
The move will anger the farm organisations who have lobbied strongly for a more meaningful environmental scheme to replace REPS.
Minister Coveney and his colleagues, Minister for Finance Michael Noonan and Minister for Public Expenditure Brendan Howlin, met a number of farmer delegations last week as pre-Budget talks stepped up a gear.
However, Minister Coveney is believed to have told party colleagues that a new environmental package was not in his plans for next year. He also ruled out suggestions that the current REPS 4 scheme would be rolled over for a further year.
Minister Coveney has to find €53m in savings for the Budget this year, with €28m to be cut from the Department of Agriculture's current spend and €25m from the capital allocation.
The 13,000 leaving REPS 4 should deliver savings of more than €35m in the Department's overall spend, but it has been suggested that some or all of this total could be carried into next year by delaying REPS payments to farmers.
Talking to the Farming Independent this week, Minister Coveney also raised the possibility of bringing forestry funding back under Pillar II.
Given that the €80m forestry programme is funded exclusively at national level, moving forestry into Pillar II would mean that it could be co-funded on a 50:50 basis by Brussels, and deliver savings of €40m. However, the Government also has the option of lowering their co-funding commitment in Pillar II to as low as 15pc.
Minister Coveney has committed to introducing tax changes to encourage land mobility in the Budget. He reiterated this last week at various meetings with TDs and farm organisations.
Meanwhile, the ICMSA has warned that any move to bring forward the pay-and-file deadline for the self-employed to September 1 would play havoc with cash-flow on farms.
It is understood that an earlier pay-and-file date has been mooted because of the Budget date being moved forward to mid-October.
However, at a meeting with ministers Noonan and Howlin last week, the ICMSA voiced their total opposition to such a move.
ICMSA president John Comer said bringing forward the pay-and-file date would "negatively impact" on farm families, as many depend on their Single Farm Payment (SFP) to pay their tax liabilities.
As the first 50pc of farmers' SFP is not paid until mid-October, bringing forward the tax payment date to September for self-employed people would hit cash-flow on farms.
On the question of land mobility, the ICMSA president called for the 1pc stamp duty rate for transfers to close relatives to be extended. The measure is due to expire at the end of 2014.
Mr Comer also claimed that reductions in the Capital Acquisitions Tax (CAT) thresholds in successive Budgets had been excessive and had worked as a disincentive on land transfers.
"We believe that the retention of 90pc agricultural relief for CAT is absolutely essential to ensure transfer from one generation to the next in a tax efficient manner," Mr Comer said.
"We also firmly hold that farm families should be able to avail of the same tax relief for farm leases as non-related farm persons," he added.