Brown hints again at subsidy switch
3 December 1999
Brown hints again at subsidy switch
By Alistair Driver
FARMERS are increasingly likely to see a reduction in subsidies in an effort to fund environmental initiatives, agriculture minister Nick Brown has hinted.
Mr Brown suggested that the government may introduce “a modest form of modulation” to raise cash for agri-environment schemes.
He told Farmers Weekly that the idea would be acceptable if it could be used to get more money from the Treasury for rural development initiatives.
Mr Brown also hinted that more funding could be in the pipeline for organic farmers.
“Although I am not a supporter of modulation, I think it would be an acceptable way forward, if it could be used to lever more money into RDR initiatives,” he said.
The government has 
154 million (£101m) from the EU to pay for initiatives under the new Rural Development Regulations.
The regulations were agreed by European agriculture ministers last March in an attempt to broaden farmers roles in sustaining the countryside.
Those initiatives include Environmentally Sensitive Areas and Countryside Stewardship schemes, marketing programmes and a possible early retirement scheme.
He repeated his support for “degressivity” in which direct payments to farmers are reduced on a year-by-year basis.
The reduction would be proportional to the amount of support received and the money saved is redirected into agri-environment schemes.
Mr Brown said he would only support modulation if the money saved from direct payments was matched by the Treasury.
European countries are allowed to cut direct payments by up to 20% but, if modulation is introduced, it is likely to be at much lower levels.
Farmers leaders have warned that farmers in areas dependent on subsidies could face a 1% cut in support payments leading to a 2% cut in income.
One-fifth of farmers receive 80% of subsidies and will suffer accordingly if some of the payments are removed, Mr Brown acknowledged.
He was “pretty confident” that further money would be made available for a successive organic scheme, following further discussions with the Treasury.