Allister secures clarification from Fischer-Boel on compulsory Modulation consequences
15 August 2008
Statement by Traditional Unionist MEP Jim Allister:-
“The EU’s CAP Health Check proposals, particularly relating to modulation, raised a number of issues of relevance to Northern Ireland upon which I had sought clarification from Mariann Fischer Boel, both in the Agriculture Committee and in correspondence. I have now received a considered response from the Commissioner dealing with these issues.
Two important points emerge:-
1. The phasing out of voluntary modulation by the increase in compulsory modulation, should not result in any increased demands from farmers, above that caused by the whopping 13% demand itself. The concern was that since voluntary modulation was not subject to the 5000€ franchise, its replacement by compulsory modulation, which has such threshold exemption, would produce less money and in consequence the UK and Portugal might face a modulation shortfall. I welcome a pledge from the Commissioner in her letter that, “at the level of farmers in Northern Ireland, the same amount of modulation will be maintained. The fact that compulsory modulation is subject to the 5,000€ franchise while the UK choose not to apply this franchise on the voluntary modulation will not require a further increase in modulation.”
2. The new compulsory modulation is directed specifically at spending on the new challenges of climate change, bio-energy, water management and biodiversity. However, since the approved NI Rural Development Programme is already heavily focused on environmental measures, I was concerned about duplication and failure to adequately acknowledge our heavy emphasis on Axis 2. In her reply the Commissioner has conceded that expenditure foreseen under the current rural development programme could count towards attaining the targets set for the additional compulsory modulation, but this will be determined on “a case by case basis”. What she does not explain is what would then happen with the “spare” money raised under the additional compulsory modulation. It is now the duty of DARD to ensure that on this case by case determination Northern Ireland’s farmers are adequately protected from wasteful expenditure and duplicate demands.
I attach copies of the relevant correspondence.”
Mariann Fischer Boel
Commissioner for Agriculture and Rural Development
EU Commission
Rue Wiertz
B-1049
BRUSSELS
Belgium
27 June 2008
Re. Modulation proposals under CAP Health Check proposals
Dear Commissioner
Can you please clarify the impact an 8% increase in the rate of compulsory modulation is likely to have on various aspects of Rural Development Programmes in Member States.
Firstly, can you confirm if it is the Commission’s proposal that all of the additional 8% modulated monies are to be spent exclusively on what have been termed ‘new environmental priorities’ – renewable energy, tackling climate change, water management and biodiversity?
Secondly, I want clarification in relation to the likely impact of any increase in compulsory modulation upon regions and Member States where additional voluntary modulation already applies, including my own Northern Ireland constituency. This of course includes the 5000 Euro franchise potentially creating difficulties where any increased rate of compulsory modulation is met with a corresponding decrease in voluntary modulation. I would ask you to shed some light on what the Commission’s proposals are in dealing with this situation.
I would point out that feelings are already running high in my constituency among farmers who resent the high proportion of deductions from their direct payments into what they consider to be more elusive notions of rural development. I would add that the franchise would potentially require a further increase in modulated deductions from many farmers’ direct payments itself. Furthermore, if it is the Commission’s assertion that further deductions are required to contribute to new environmental priorities, I very much fear for the competitiveness of farming in Northern Ireland.
Therefore, I would be grateful if you would set out the likely impact of any increase in compulsory modulation for the UK and Portugal, the only Member States to apply voluntary modulation. Finally, I trust you will agree that the Northern Ireland Rural Development Programme, as approved by the Commission in July 2007 adequately deals with environmental measures in terms of the high share of funds allocated to Axis 2, particularly compared with other states which major on Axis 1 allocations. If Northern Ireland as a region received a fair share of the EU Rural Development pot, particularly when comparisons are made with our Republic of Ireland neighbours, the stakes would not be so high.
I look forward to hearing from you at your first convenience.
Yours sincerely
James H Allister QC MEP
Dear Mr Allister,
Thank you for your letter of 9 July 2008 by which you asked for some clarification as regards the impact of the proposals on modulation under the Health Check of the Common Agricultural Policy.
You point out that the Northern Ireland Rural Development programme already deals to a quite large extent with environmental measures. The additional funding is aimed at measures targeted to address the new and ongoing challenges our agriculture has to face, such as climate change, bio-energy. water management and biodiversity. The Commission proposal foresees that an amount equal to that from additional compulsory modulation should be spent on operations related to the new challenges. The respective support must be paid and committed after 1 January 2010. Thereby, some of the expenditure foreseen under the current rural development programmes could already be counted. The extent to which this will be possible has to be determined on a case by case basis.
For Member States like the UK applying voluntary modulation, it is the intention that any increase in compulsory modulation will substitute in the same proportions a decrease in voluntary modulation. Therefore, at the level of farmers in Northern Ireland, the same amount of modulation will be maintained. The fact that compulsory modulation is subject to the 5000 € franchise while the United Kingdom chose not to apply this franchise on the voluntary modulation will not require a further increase in modulation.
It is true that in some regions new modulation amounts could be generated above a certain threshold of payments where all voluntary modulation is substituted and fresh amounts of modulation are generated. However, this threshold is rather high and depends on the rate of voluntary modulation currently being applied. Our estimates show that in this respect the net financial impact of the Flealth Check proposal will be zero in Portugal and in the United Kingdom, except in Wales where roughly 1 EUR million more modulation could be generated.
Finally, as regards the impact of modulation on competitiveness of farming in Northern Ireland, let me stress that modulation is part of a whole package, the aim of which is particularly to improve the competitiveness and sustainability of European agriculture, to allow it to grasp new market opportunities and to prepare it for new challenges. This proposal is therefore consistent with the overall goal of the Commission and the requirements of the Treaties to promote a sustainable and market oriented agricultural sector.
Yours sincerely,
Mariann Fischer Boel
