Brendan Smith (Cavan-Monaghan, Fianna Fail)

For payments in excess of €5,000, additional compulsory modulation at a rate of 2% per year is proposed from 2009 to 2012. This would bring the modulation rate to 13% by 2012. A further 3% modulation is proposed on payments in excess of €100,000, an additional 6% is proposed on payments over €200,000 and an additional 9% is proposed on payments above €300,000.

The objective is to use this funding to finance measures directed at addressing what the Commission has described as the "new challenges" of climate change, risk management, bio-energy and biodiversity. As the proposals stand, all of the additional modulated funds would remain in the member state of modulation and could be allocated to farmer payments under the rural development programme.

In the negotiations to date a wide range of views have been expressed by member states on the Commission's proposal on modulation and it is not clear what finally will be agreed. I have opposed the proposed increases in modulation, together with several of my fellow Ministers for Agriculture. I have concerns about significantly reducing the single farm payment at a time when farmers are still adapting to the impact of decoupling and believe it is needlessly disruptive to change the Rural Development Programme 2007-2013 so soon after its adoption. However, I welcome that the funds released through additional modulation could be used for farm payments in Ireland.

Ireland strongly supports pillar 2 of the Common Agricultural Policy and is providing a high level of national funding for rural development. We already devote a substantial proportion of rural development funds to addressing the new challenges identified by the Commission.

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