Amid uncertainty over the planned reform of the CAP, the current programme is set to be rolled over for another year.
Agriculture Commissioner Phil Hogan confirmed this week that discussions are now ongoing within the Commission on transitional arrangements as the current CAP programme comes to an end next year.
Commissioner Hogan said he expects the arrangements will be in place for one year and that he is working with the budget commissioner to decide when is the best time to introduce the measures.
Uncertainty over the EU budget has dogged the reform of the CAP for months.
Under plans for the EU's budget for 2021-2027, farmers across Europe would receive around €232bn in direct support, a drop of more than €30bn from the current seven-year budget.
However, Germany, the main contributor to the EU's budget, has now signalled wants to limit EU spending with Sweden, Denmark and the Netherlands supporting Berlin's more cautious spending plans.
Uncertainty over the nature of the UK's departure from the EU is also casting a shadow over discussions on the CAP.
The Department of Agriculture has also noted that its work do date analysing the impact of planned reforms to the CAP do not take account of EU budget changes.
A modelling exercise released by the Department suggested that some 54,000 farmers could see their EU farm payments cut under EU proposals for the next Common Agricultural Policy.
However, the IFA has said the analysis does not show the full impact of the CAP proposals as it omits the impact of the €97m per annum cut which is part of the current EU Commission proposal.
Under EU proposals for the next CAP, payments to farmers are set to be further levelled to reduce the current significant disparities between individual farmers.
Under the proposals, some 54,000 farmers would see their payments cut while 68,000 farmers would receive increased payments.
The Department's analysis also shows that some 716 farmers would be impacted by EU proposals to cap payments above €100,000.
However, IFA President Joe Healy said the Department of Agriculture CAP analysis published today does not show the full impact of the CAP proposals as it omits the impact of the €97m per annum cut which is part of the current EU Commission proposal.
He said this amounts to €678m for the seven years of the CAP programme, before the impact of inflation.
The IFA is calling on the Irish Government to reject the CAP cut and insist that the CAP budget is increased in line with inflation and to compensate farmers for any extra asks on them as part of the new CAP.
However, the Common Agricultural Policy (CAP) budget may now be cut further as it has been reported that Germany, the main contributor to the EU's budget, wants to limit spending to 1pc of economic output.
Sweden, Denmark and the Netherlands support Berlin's more cautious spending plans.
“The Department’s analysis of the CAP proposals focuses on the elements of the proposals which will effectively redistribute money between farmers. The elephant in the room is the size of the overall budget,” Joe Healy said.
“We need to keep the focus on this and not get distracted by a debate on how the money will be distributed. One thing is certain - the smaller the overall budget, the more farmers will lose out,” he said.
“What the Commission has proposed has not been agreed. The Government must direct their energies at building support for a bigger budget,” he said.
“In 1985 the CAP made up over 55% of the overall EU budget (MFF). Under the latest proposals, it will be less than 30%. The EU is effectively raiding the CAP budget for other initiatives. This has to stop. Farmers cannot be expected to do more and more for less and less” he said.