Modulation rates rise is a misguided idea
Modulation rates rise is a misguided idea
By Andrew Shirley
POLICY commission proposals to increase modulation rates have been criticised as "misguided" by one national firm of farm business consultants.
The mechanism, which diverts a percentage of IACS payments (3% for the 2002-03 season) towards agri-environmental schemes, is a key component of the commissions recent farming and food report. It recommends the rate rises to 10% by 2004 and 20% from 2007.
Christopher Monk, head of Strutt & Parkers farming department, says the move would lead to an unnecessary waste of taxpayers money through increased administration costs. "We believe one-quarter of the money ploughed into the Countryside Stewardship Scheme, for example, is spent on administration. This compares with only 4% for the existing IACS scheme."
A system of environmental cross-compliance would be more appropriate, says Mr Monk, because it would force farmers to achieve certain environmental objectives to qualify for subsidies. "Those that fail to meet their requirements would be penalised in the same way as IACS fraud."
Farmers organisations have also backed cross-compliance over an increase in modulation. NFU vice-president Michael Paske is concerned about the way modulation cash is being handled by the England Rural Development Programme. "Were not clear how much of this money is currently going into their schemes."
Commission chairman Donald Curry appears to share Mr Paskes concerns. "We agree the existing stewardship schemes are too complicated and confusing. The report makes it crystal clear that they are not what we suggest new resources are spent on."
If this is the case, Mr Monk says the government may as well support cross-compliance. "It could be administered by the Rural Payments Agency and form part of the existing IACS paperwork. Far fewer people would be needed to run it."
But David Bolton, East Anglian partner of farm business consultancy Andersons, disagrees. "The idea is impractical. It smells of bureaucracy and over-policing.
"Many people would be needed just to check that farmers are complying. The unique nature of the countryside could be destroyed if everybody was doing the same thing just to get their IACS money." *