EU Commission almost powerless to head of voluntary modulation

The EU Commission is almost powerless to head off voluntary modulation, despite the policy being clearly rejected by the European parliament and deeply unpopular within the commission’s own ranks.


Addressing this week’s Agra Informa Rural Development conference in London, Dirk Ahner, deputy director general of the EU’s agriculture directorate, said the commission had been formally requested by EU farm ministers to introduce voluntary modulation, and this it had to honour.


His comments came on the same day that the European parliament in Strasbourg called for 20% voluntary modulation to be scrapped. The measure, which only the UK is planning to use, will jeopardise the survival of many farmers, lead to distortions of competition and result in the renationalisation of the CAP, MEPs argued.


Dr Ahner said the commission would review its proposals, though it was hard to see how it could accommodate such fundamental objections. He would not be able to withdraw voluntary modulation as the parliament wanted.


As such, the dossier would be returned to parliament for a final opinion. According to Dr Ahner, this would not be until the spring of 2007, after which farm ministers would be able to adopt voluntary modulation.


DEFRA head of rural development Jill Wordley said she deeply regretted these delays, as they meant the UK would not be able to submit its new rural development programme (RDP) to Brussels for approval until well into 2007.


Dismal allocations


But, given the dismal allocation of funds to the UK from the EU, voluntary modulation was essential if DEFRA and the devolved administrations were to have any chance of meeting their rural development objectives.


DEFRA was pressing Brussels hard to be allowed to set different rates of voluntary modulation in the various regions of the UK. But until these outcomes were known, the Treasury would not be able to decide on co-funding. “This uncertainty is as unwelcome as it is inevitable,” she said.


Ms Wordley added that DEFRA would soon be isssuing details of its contingency plans, to bridge the gap between the current RDP and the new RDP. “We want to be able to keep the agri-environment schemes open, though it is likely this will have to be on a provisional basis,” she said.


Theodor Buhner of the German ministry of agriculture, confirmed that Germany would not be using voluntary modulation, especially given the cuts to single farm payments that farmers will be suffering anyway due to the cost of taking Romania and Bulgaria into the EU next year.









MODULATION RATES SET TO RISE

Increasing compulsory EU modulation from 5% will be considered as part of the 2008 “health check” of CAP reform, Dr Ahner told the conference, though he would not be drawn on what level it should be raised to. President of the European Landowners’ Association Mark Thomasin-Foster suggested a doubling to 10% to make good some of the shortfall in funding arising from last year’s EU budget deal.


Further transfers of funds from Pillar 1 to Pillar 2 are favoured by Brussels, as rural development provides the tools to modernise rural economies, can be tailored to meet local needs, is well regarded by taxpayers and is WTO compatible.