7 November 1997

UK-runmodulation is not ruled out by MAFF mandarins

By Tony McDougal

FARM minister Jack Cunningham has not ruled out a domestic modulation policy which would create a national payment ceiling for UK farmers.

Senior MAFF civil servants said that although the minister was opposed to policies which threatened the competitiveness of UK agriculture, a policy of modulation controlled by Whitehall was far more favourable to one run by Brussels.

Giving evidence to the Commons agriculture committee, as part of its investigation of the EU CAP reform proposals, Andy Lebrecht, head of MAFFs European division, said the EU Commissions forward budget had not taken account of savings that modulation would bring. So, if the policy was adopted the ceilings would be at a higher rather than lower rate, he suggested.

Responding to a statement by the Central Association of Agricultural Valuers (CAAV), which estimated the commissions ceiling would be set at £170,000 in direct payments, Mr Lebrecht said no figures had yet been published.

Kate Timms, head of MAFFs agriculture, crops and commodities directorate, said government believed the Agenda 2000 proposals had not gone far enough in reducing reliance on commodity support, adding that the UK was deeply unhappy about the proposed maintenance of the milk quota regime. "We will fight for an end date for compensatory support," she said.

Select committee members argued that the UK was still not doing enough to reduce support and drive down prices, but Mr Lebrecht said that if the Agenda 2000 package was adopted, consumers in the UK would be £1bn a year better off due to cheaper dairy and cereal prices.

Lack of details

MPs were concerned about the lack of details over environmental support and cash for the rural economy. Judy Allfrey, head of MAFFs conservation and rural development division, said there were vague references to "green" hill livestock compensatory allowances, which could lead to all less favoured area farmers having to follow basic environmentally sensitive area requirements.

Miss Timms added that it was unlikely the CAP reform package would lead to a massive loss of jobs in agriculture even though the Transport and General Workers Union has claimed 5400 people lost their jobs following the 1992 MacSharry reforms.

"The fall-out in labour was due to the introduction of compulsory 15% set-aside in 1992. The decline in payments to farmers will have some impact on farm incomes but I dont see the same fall-out this time," she said.