The UFU spoke to EU Commission officials this week by video-conference as the proposals were launched. Keeping modulation to a minimum was our top priority.
CAP Health Check: Modulation is the key issue in the Health Check proposals. To fund 'new challenges' such as climate change, the EU Commission proposes to raise extra money by increasing compulsory EU modulation (13% by 2012). The UFU has always opposed modulation and will continue to do so; it is a top slice off your Single Farm Payment. Higher EU modulation would be made even worse in Northern Ireland by the fact that we have also had additional modulation imposed on us to fund the rural development programme. The UFU's objective will be to ensure modulation is kept to a minimum and that Northern Ireland modulation rates are no higher than every other country in Europe.
Some moves are being made to simplify bureaucracy and that is a good thing. Set-aside is to be removed, Single Farm Payment entitlements will be simplified, and several unnecessary cross compliance obligations will be removed. Northern Ireland can retain its existing Single Farm Payment model until 2013 and that will be our objective.
The EU Commission is also keen to do away with market management tools such as cereals intervention. This may be an easy policy decision to consider if global market prices are strong, but if prices drop the EU agriculture sector could be left very exposed. The UFU says market volatility needs to be avoided. In the dairy sector the merits of increasing milk quota further at a time when world markets are under pressure is questionable (the proposal is to increase milk quotas by 1% annually between 2009 and 2013).
With the EU budget under review next year, Mariann Fischer-Boel is keen to make the CAP more justifiable to the tax payer and that is a crucial issue to preserve the Single Farm Payment. To that end she has included new proposals that would see a greater level of modulation applied to farmers receiving very large SFP's (an extra 3% modulation above 100,000 Euro; 6% modulation above 200,000 Euro and 9% above 300,000 Euro). She also urged Member States to move to a flatter rate SFP system beyond 2013.
The UFU will now conduct a consultation with our membership on the detail of the Health Check proposals. A final decision is expected from EU Ministers in November.