Rural Development Plan delay likely as voluntary modulation is rejected by Euro-MPs

Euro-MPs have rejected the idea of voluntary national modulation in a move that is likely to delay the new Rural Development Plan for 2007.

Voluntary modulation was included in last December’s EU budget deal at the insistence of the British government, which sees it as essential to raising sufficient funds for its various environmental schemes.

With the UK getting just 2.5% of the EU rural development fund, economists have forecast that, in the absence of match-funding, UK farmers will see up to 20% of their 2007 single farm payments siphoned off to make good the shortfall.

But a meeting of the European parliament’s agriculture committee, in Brussels this week, rejected the EU Commission’s proposals for voluntary modulation.

“Parliament cannot agree to the proposal because it jeopardises the survival of many farms, distorts competition and discriminates against farmers in individual member states,” said a report by MEP Lutz Goepel. “It entails the abandonment and renationalisation of the CAP.”

The report will now pass to the full European parliament on 26 October, which is expected to endorse the committee’s findings and demand that the EU Commission redraft its proposal.

This will delay the introduction of voluntary modulation, rather than derail it altogether, as the European parliament is only being consulted on the issue. But until the parliament’s opinion is delivered, EU farm ministers cannot enact the legislation and this may not be possible until next February or March.

Without the legislation in place, the UK government will not be able to decide on the rate of voluntary modulation for 2007, or whether the same rate will apply to England, Wales, Scotland and Northern Ireland, or whether it will be match funded.

And without these in place, it will not know how much money it will have and will not be able to submit a new Rural Development Plan to Brussels for approval.

“Even once the national plan is submitted, Brussels will have six months to decide whether to approve it,” said NFU chief economist Carmen Suarez.

“The delays will have different consequences for different schemes, but this needs sorting out as soon as possible, otherwise farmers will suffer.”