NORTHERN IRELAND producers will enjoy a small reduction in the rate of modulation next year after the decision by agriculture minister Ian Pearson not to impose any extra cuts to single farm payments in 2005.

As a result, they will only face the 3% compulsory EU deduction, compared with the 3.5% national voluntary cut they have paid this year. Those earning less than €5000 (£3500) in direct payments will also be exempt from EU modulation, benefiting about 40% of NI farmers.

But post-2005 modulation rates will be racked up, with national cuts of 4.5% imposed in 2006, on top of the 4% EU element. According to Mr Pearson, this is necessary in order to take full advantage of an extra 9m of match funding on offer from the Treasury for rural development, on top of the £8.8m already available.

“It is clear to me that the correct strategic choice for Northern Ireland is to seize this golden opportunity,” he said. “The primary focus of modulation expenditure will continue to be the agri-environment programme.”

Substantial sums would be devoted to the farm woodland programme, and flexibility would be retained to use modulation monies for food quality, animal welfare and meeting standards, should opportunities arise.

In addition, Mr Pearson offered to keep the level of modulation under review, so that the 4.5% could be raised or lowered in 2007 depending on the uptake of the various schemes on offer and exchange rates.

The Ulster Farmers’ Union, which has consistently opposed any additional modulation, urged the department of agriculture to make future schemes as widely available as possible.

“Farmers view modulation as a top slice off their single farm payment,” said UFU president Campbell Tweed. “It is critical now that modulated funding is available to all farmers in an accessible way.”