Voluntary modulation rates will be lower in Wales than elsewhere in the UK.
They will start at 2.5% in 2008 and peak at 6.5% in 2011 and 2012. The money, which will be additional to that raised by the EU compulsory 5% annual modulation rate, will be used primarily to support agri-environment measures.
The Welsh Assembly government will co-finance voluntary modulation receipts up to a maximum of 45%, and 80% of the total will be allocated to Axis 2 of the Rural Development Plan.
The Welsh RDP, which has a projected spend of £770m, has still to be formally submitted to the European Commission. To be accepted it will need to show the Commission that Wales is committed to a sustainable environment.
Jane Davidson, the Welsh assembly’s sustainability and rural development minister, plans to make an announcement within the next few weeks on the currently suspended processing of applications for the flagship Tir Gofal agri-environment scheme.
Both Welsh farming unions, who oppose in principle the imposition of voluntary modulation, welcomed the decision to set rates lower than those applied in the rest of the UK.
Farmers Union of Wales president Gareth Vaughan claimed the money collected must be used in ways that benefited farming as a whole, and should not whittled away on unnecessary administration and bureaucracy.
“We shall be urging the Welsh Assembly government to ensure that the maximum amount of Pillar 2 money is accessible to all Welsh farmers, and that administration costs are kept to a minimum,” said Mr Vaughan.
NFU Cymru gave the voluntary modulation announcement a “lukewarm” reception and insisted that total rates would still be far too high.
President Dai Davies said that while Welsh voluntary modulation rates were thankfully lower than those faced by farmers in other parts of the UK, they still meant that producers would soon be losing over 10% of their single farm payments.
“It is absolutely essential that all farmers in Wales who have contributed to the modulation pot are able to access modulated money under the various axes of the RDP.
“NFU Cymru will be fighting to ensure fair access to funds for all our producers, as well as ensuring that there is no haemorrhaging of rural development money away from farming.”
Welsh modulation rates:
2007 – 0%
2008 – 2.5%
2009 – 4.2%
2010 – 5.8%
2011 – 6.5%
2012 – 6.5%