CAP health check agreement branded ‘a nasty fudge’ by NFU


Higher rates of compulsory modulation, a gradual increase in milk quotas and an opportunity for member states to re-direct direct payments to certain groups of farmers have been agreed by EU farm ministers.





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Those are some of the key elements of the package of measures ministers agreed on Thursday morning (20 November), as they wrapped up the so-called “health check” of the CAP.


On modulation, there was a considerable watering down of EU agriculture commissioner Mariann Fischer Boel’s original proposal to move more funds from direct payments into separate rural development measures.







WHAT WAS AGREED




  • Compulsory EU modulation increased from 5% to 10%


  • Progressive modulation applied at 4% on SFPs over €300,000


  • Increases in EU modulation matched by cuts in national modulation


  • Milk quota to increase by 1% a year for each of the next five years


  • This increase to be “front-loaded” in Italy


  •  Article 68 – up to 10% of a member state’s SFP may be “top sliced” and used to support farming systems with environmental benefits, support dairy, beef or sheep farmers in disadvantaged regions, pay for food quality and marketing initiatives and help financed crop insurance programmes and animal disease funds


  • Only 3.5% of these monies may be used in trade distorting ways


  • Intervention for bread-making wheat to be limited to 3m tonnes, then subject to a new tendering system


  • Full-decoupling to be extended to all crops and most livestock, with the exception of suckler cows and sheep in member states which are still using these partially coupled supports


  • Set-aside to go for good.


  • End to the energy crop premium


After around 18 hours of negotiation, it was finally decided that compulsory EU modulation will increase from the current 5% to 10% by 2012 – short of the 13% the commission wanted.


But there will be a further element of “progressive modulation”, taking extra money from farmers who receive larger single farm payments.


This means that those receiving over €300,000 will have another 4% removed.


While this will discriminate against the largest farmers, many in the UK will not feel the effects, as any increase in EU modulation must be offset by a reduction in national voluntary modulation.


English farmers already have 17% EU and national modulation. At its maximum, the new EU rate will be 14%.


On milk quota, the EU Commission succeeded in defending its original aim – to increase volumes by 1% a year for each of the next five years, to ensure a “soft landing” when quotas are removed altogether in 2015.


But it was agreed that Italy could increase its quota by 5% in one go in 2009.


The other most controversial issue was the so-called Article 68 measure, which allows member states to “top slice” up to 10% from direct payments and put the money into national envelopes.


These can then be used in a variety of ways, for example targeted at farmers in vulnerable regions or used to help pay for things like crop insurance schemes or animal disease funds.


Speaking to Farmers Weekly from the NFU’s Brussels office, NFU president Peter Kendall described the deal as “another fudge, with a nasty sting in the tail for English farmers with regard set-aside replacements”.


This was because one of the changes agreed will see establishment and maintenance of habitats become one of the cross compliance conditions, giving DEFRA the chance to make environmental set-aside compulsory.


He was also concerned that Article 68 will allow DEFRA to top slice 10% off SFPs and use the money for environmental payments.


DEFRA secretary Hilary Benn said the package was a mixed deal, which extended decoupling and simplified the rules for farm payments, but left dairy farmers open to distortions in competition.