Mary Coughlan (Donegal South West, Fianna Fail)

Modulation, the transfer of funds from CAP Pillar One to Pillar Two was introduced by the Agriculture Council as part of an overall radical mid-term review of the CAP in June 2003. The decision of the Council was to introduce modulation at the rate of 3% in 2005, increasing to 4% in 2006 and 5% in 2007 and every year thereafter to 2012.

There is speculation that the Commission will bring forward proposals in the context of the upcoming health check for an increase in the rate of compulsory modulation. The expected timeframe for the health check is publication of a Commission communication next month with formal legislative proposals in May 2008. Agreement on the overall health check proposals is planned for the latter half of 2008 during the French Presidency of the EU.

I am opposed to an increase in the compulsory modulation rate. My view is that there is a legitimate expectation on the part of farmers concerning single payment rates for the period 2007 to 2013. I believe we should not sacrifice support for Pillar One activities to drive the development of the second pillar. I expressed this view at the recent informal Council of Ministers meeting in September. There is also a net loss to Ireland from modulation as the reduction in direct payments is not fully compensated by the increase in RD allocations.

I will be participating fully in all negotiations on this and other aspects of the health check, when specific proposals emerge. In the meantime, I have been in contact with the Commission and other member states to encourage support for our views on this matter.

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