NFU Scotland has broadly welcomed the voluntary modulation rates announced for Scotland which are much lower than had been rumoured.

Cabinet Secretary Richard Lochhead made the announcement on Thursday (31 May).

The rates will be:
• 5% in 2007
• 8% in 2008
• 8.5% in 2009
• 9% in each year from 2010-12 inclusive

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

NFU Scotland president Jim McLaren said: “We have made it very clear to the new Scottish Executive that we expected a rural development programme that will meet the needs of Scotland’s farming businesses and rural communities. 

“Our calculations showed that this could be achieved without swingeing increases in the rate of voluntary modulation, which would have undermined the viability of individual businesses. 

“While the eventual rates of voluntary modulation will be higher than the current 5%, which we believe could still have delivered a meaningful programme, they average out at 8% over the period up until 2013 and are boosted by a significant increase in Scottish Executive funding to £1,113m, compared to £552m in the previous programme.”

The Scottish Rural Development Programme includes a wide range of measures that will benefit farm businesses and the wider rural economy.

They include a commitment to support hill and upland farms in Scotland’s Less Favoured Areas, increased funding for environmental schemes and measures to improve the competitiveness and profitability of farm businesses.

The voluntary modulation rate of 5% in 2007 rising to 9% in 2012 is considerably lower than the rates previously trailed by Scottish Executive officials and the equivalent rates already announced in England and Northern Ireland. 

NFU Scotland had argued for as low a rate as possible that would provide sufficient funding for a meaningful rural development programme without, at the same time, putting farm incomes at risk.