With the CAP budget and future framework up for review, it’s time to take real stock of where we stand so that at least the debate can be properly informed.

While Teagasc has given the figures for Ireland, I had never seen how reliant other EU countries were on direct payments.

Just last week, all these figures were pulled together by the Paris-based organisation the Organisation for Economic Co-operation & Development (OECD).

They split the analysis into cereal farms and ruminant farms. In most of Europe, by far the predominant ruminant form of farming is dairying so the results are, in my view, distorted in the case of Ireland and Britain which have a large, specialised beef sector. The same but to a lesser extent applies to France.

But what is truly striking about the analysis is the dependence on direct payments in the cereals sector, not just in Ireland but across Europe.

Before the move to payment convergence that began in 2014, the margins in EU cereal production were razor thin.

For instance, in Ireland the income from actual market prices was €22m, with direct payments €77m, but with the convergence towards a flat area payment, the total income from producing cereals will fall as area payments to cereal growers fall.

On the other hand, the ruminant sector, which essentially means dairying in much of Europe, gets much more of its income from the market returns with direct payments accounting for only, on average, about one-eighth, or approximately 12% of total income compared with over 70% on the cereal farms.

Because of its large beef and sheep sectors, Ireland is more dependent on direct payments, where in the ruminant sector they account for about one-sixth or 16% of total income, but in The Netherlands the direct payments account for little more than 1% of total ruminant income.

It’s clear from these figures and the analysis that the original 35% reduction in cereal guaranteed prices under the MacSharry and Fischler reforms had a fundamental effect on EU cereal profitability. The application of further agri-chemical and environmental restrictions impose further penalties. Dairying by contrast was able to adapt to world market prices and trading conditions much more effectively.

The core question now is what future does Europe want for its cereal and indeed protein sector. Given the extraordinary dependence on direct payments, policymakers are going to have to carefully consider the implications of a further erosion of supports.