Reform of the Common Agricultural Policy (CAP) has had a slightly positive impact on the Irish economy, a study has found.

In an examination of the 2003 mid-term review of the CAP, Prof Alan Matthews and Dr Janine Dixon of Trinity College Dublin found that, due to its diminishing size, reform of the agricultural sector had a small upward effect on the economy, equal to 0.03 per cent of Gross Domestic Product (GDP).

The study projects that agricultural output will fall by 5.6 per cent in the coming two years, with labour input falling by 11.8 per cent.

The reforms undertaken as part of the mid-term review will boost farm incomes by 3.5 per cent in the short run, but have a neutral impact in the longer-term, the report finds. It also predicts that reforms will result in greenhouse gas emissions by up to 15 per cent in the long-term.