DEFRA secretary Margaret Beckett has tried to dismiss the idea that the government won’t provide match-funding if the government decides to introduce voluntary modulation to boost rural development spending.

Mrs Beckett told the NFU annual conference that the December 2005 EU budget deal did not mean that voluntary modulation could not be co-financed – it left the decision up to member states.

“I am sure you would like me to give you guarantees today that there will be full co-financing. I am of course talking to the Chancellor and the chief Secretary about the options,” she said.

But she added: “It is worth remembering in this context that in 2002 the government committed to providing match-funding for modulation pound for pound as the new entry level scheme was introduced. Later, in 2004, we could have reduced the rate of match-funding following a change in EU rules. But we chose not to do so.”

Mrs Beckett said she understood farmers concerns that if there was no match-funding it would hit the competitiveness of UK agriculture.

But she stressed that no one wanted voluntary modulation to be any higher than was absolutely necessary.

“The case has to be made on the basis of efficient use of taxpayers’ money to deliver our shared objectives for farming and the public benefits that it can provide. If the industry can make a robust case on this basis, the government will give it serious consideration,” she said.