Drive for modulation masks Government failure for a fair deal
Latest figures to be released from Brussels show just how bad a deal the UK Government has secured for the Country’s pillar two rural development programmes, the NFU said today.
The numbers confirm that the UK will be allocated the lowest share of funds of all member states on a per hectare basis and will also face significant reductions compared to the current budget.
Speaking at the Cereals event today (Wednesday June 12), NFU President Peter Kendall will say: “Despite all of the rhetoric we have heard from Government about the importance of the pillar two rural development and ministers’ willingness to fight for a fair deal for English farmers, negotiators have come back from Europe with less than we started with.
“The UK will retain the unenviable position of being allocated the lowest share of all member states on a per hectare basis. In the first year of the new programme, we will see our allocation cut by 16 per cent, rising to cuts of 27 per cent in the final year. That’s 22 per cent less over the seven year period compared to rolling on the 2013 budget over that same period. By 2020, UK farmers will see less money coming back to the UK than they contributed across into the pot by way of the compulsory EU modulation transfers in 2013.
“At the same time as UK allocation has decreased, other countries like France, Italy and Ireland have successfully managed to secure special offerings from Brussels. The French got an extra €1 billion, the Italians €1.5billion and even the Finnish managed an extra €600million.What did the UK get? The power to mask these budget cuts by further disadvantaging UK farmers through increased voluntary modulation rates from their current levels of 9 per cent up to a maximum of 15 per cent, with no co-financing requirement. As the former agriculture Minister, Sir Jim Paice, said on the BBC last week in reference to this situation “the issue of a level playing field just will not exist”.
“Defra Ministers persistence in their determination to disadvantage English farmers through maximum voluntary modulation transfers in the next CAP may shore up budgets, but will also greatly exacerbate the difference in payment levels between us and our competitors. A Somerset or Shropshire dairy farmer is already disadvantaged to the tune of €235/ ha compared to a Dutch dairy farmer. I just don’t buy Ministers’ arguments that cutting English farmers payments by more than our competitors will leave us in a better position to compete. It will leave English farmers more vulnerable to the volatility we have seen in markets and weather over the past few years and make their businesses less resilient compared to our European competitors.
“The irony is not lost on me that this Conservative-led Government is actively looking for ways to take money off UK businesses first and will then decide how to spend it second, defying every principle of sound financial management. I want the Government to trust farmers to invest the CAP support that we do receive in a way that helps contribute to jobs and growth, not design costly and complex schemes to deliver that money back to the very same people they have taken the money off in the first place.”
- The UK will be allocated €2.293 billion for the 7 year period 2014-2020. This compares to €2.425 billion for the period 2007-2013. A cut of 5.45%
- Comparing the current programme period with the next programme period does not reflect that over the period the UK allocation of rural development funds has been supplemented by increasing amounts of compulsory EU modulation. By 2013, the rate of compulsory transfers from single farm payments over €5,000 was 10%. This generated €324.97 million to the €418.5million European envelope for rural development.
- The NFU uses the 2013 budget (€418.5million) as the baseline against which to measure the future budget cuts.
- All figures are in 2011 constant prices (i.e. adjusted for inflation)
- All figures reflect the European allocation of funds, which includes compulsory modulation, but not voluntary modulation.
