Tuesday, November 28, 2006

Parliament throws out modulation plan

The European Parliament has thrown out a plan agreed at the 2005 summit of EU heads of government to allow the transfer of funds from Pillar 1 expenditure on farm subidies to Pillar 2 rural development to be increased up to a maximum of 20 per cent. Only the UK was planning to use the full amount, given that it receives low levels of rural development funding and wants to find money for its ambitious agri-environmental schemes. The Parliament can only delay the eventual decision, as it is not part of the co-decision procedure.

The motion was carried by 599 votes to 64. The Parliament believes that such a high rate of voluntary modulation would jeopardise subsidies to farmers and would also repersent a further step towards renationalisation of the CAP with farmers in different member states receiving differing amounts of cash. The Commission itself would prefer a higher rate of compulsory modulation to a range of voluntary rates.

Because of the summit deal the EU will receive on average 30 per cent less funding for rural development between 2007-13 compared with the current funding period. The Commission asked for €88.75m but this was cut by more than 20 per cent to €69.76m. This will be partly offeset by compulsory modulation, but this was intended to provide additional funds for rural development, not offset cuts made in a budget deal.

Spending more money on rural development compared with traditional farm subsidies is seen as a way of building a more diversified, dynamic and yet environmentally friendly rural economy in Europe.


fh_clarke said...


This is not a comment about this article but a query about a previous post of yours relating to cross-border milk quota trading.

I am wondering where I could find some more information about this case, do you know the ECJ case number?

The reason I ask is becasue I chose this topic for a European Intergration essay I must write as part of my final year economics degree program at Bath University.

Any help with the topic would be much appreciated.

This is the first time I've read your blog but it will not be the last. I am planning a career in the dairy industry after graduation and your clear concise writings on agricultural issues is a breath of fresh air.

Many thanks

Francis Clarke

Wyn Grant said...

Please let me have an E mail address and I will respond to your query