21 June 2002

Study shows modulation loses money

CUTTING direct aid payments and redirecting the cash into rural development projects – the process known as modulation – risks losing large sums of taxpayers money from the industry for good.

New research by the Royal Institution of Chartered Surveyors (RICS) shows that money channelled into environmental projects is not always going back to farmers, but is instead used up in more bureaucracy and expensive consultants fees.

"Part of the problem is that the money cannot simply be used to top-up existing schemes, but has to go into new measures, which take a lot of setting up," said one RICS source. "Even with match-funding, which should be a dividend for the industry, farmers still lose out overall."

Research launched

The research, which is due to be launched at a Royal Show business breakfast on July 2, also concludes that farmers may not even gain from the "broad and shallow" approach to rural development preferred by farming organisations.

"If we are not taking up the funds, then that weakens the UKs case should it go back to Brussels and ask for a bigger slice of the rural development budget," added the source. &#42