DEFRA’s announcement on the rates for voluntary modulation has left England’s farmers feeling shocked and worried.

DEFRA secretary David Milliband announced on Thursday (29 March) that voluntary modulation would be set at 12% for 2007, rising to 13% in 2009 and 14% in 2010, 2011 and 2012.

This will be on top of the compulsory EU modulation rate of 5%.

The NFU said it was relieved that after months of strong pressure the government had to co-finance agri-environmental schemes by 40%. Without this, the modulation rate would have been at its maximum of 20%
But NFU President Peter Kendall said:  “The difference between 14% in England and zero almost everywhere else is huge. This reinforces my urgent plea to the European Commission to address this differential in the CAP Health Check in 2008. We cannot allow this to persist until 2013.”

George Dunn, chief executive of the Tenant Farmers Association said: “It is particularly galling that DEFRA ministers have made this decision since we are meant to be operating with other EU Member States within a common framework.  DEFRA’s decision means that English farmers will be penalised more heavily than others throughout Europe.

“Even within the UK, English farmers will be at a competitive disadvantage. DEFRA will claim that the money will be recycled within the farming community through its suite of rural development schemes. However, these schemes are increasingly difficult to get into and are not cost-free to the farmer. 

“Participants in the Higher Level Stewardship Scheme, for example, are finding that in many cases the cost of being within the Scheme outweighs the benefits of the payments received.”

But Dr Helen Phillips, Natural England’s chief executive, welcomed the announcement: “Natural England has consistently called for increased funding for green farming schemes.

“As a result of the government’s successful negotiations in Europe and its commitment to the protection and enhancement of our natural environment, the financial future for England’s Environmental Stewardship scheme is now on a secure footing.”

But the Royal Society for the Protection of Birds was more sceptical. Dr Sue Armstrong Brown, Head of Countryside Conservation at the RSPB, said: “The money the government has pledged today has been hard-won, but is still too little when you think of all that it must pay for.

“It has been dressed up as a large sum but is dwarfed by the scale of restoration and conservation work crucial to tackling climate change and flooding, landscape improvements and all the work needed to meet 2010 targets for reversing wildlife declines.”

“Now there will be a dash for cash by farmers and hundreds of them could be disappointed. The Treasury should realise this is not just another subsidy for farmers. It is much more than that; it is money to improve the countryside now and for the long term.”

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