Wednesday, 3 October 2007
Question 100: To ask the Minister for Agriculture, Fisheries and Food if she has discussed with the EU Agriculture Commissioner proposals to increase from 5% per annum compulsory modulation; and if she will make a statement on the matter. [21887/07]
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.
Members on this side of the House acknowledge and support the excellent work in terms of rural development by organisations such as Leader. However, we do not want to see a situation whereby future funding of Leader organisations and rural development groups will be at the expense of Irish farmers. Effectively, this is what is on the table in terms of health check and the CAP review due to commence in 2008. We encourage the Minister not to yield to the EU Commission on this issue. We will support her in every possible way in this regard.
The value of single farm payments, given that agri-inflation is way ahead of ordinary inflation, has diminished significantly. To take further from that would impact significantly on farmers' incomes. I ask that the Minister hold her ground on this issue to ensure rural development is not funded at the expense of agriculture.
I agree with the Deputy on this issue. I have grave reservations in respect of an increase in compulsory modulation and I will hold firm on this. I engaged in bilateral discussions on this with my French counterpart two weeks ago and with the Presidency and a number of other member states to impress upon them Ireland's wish not to proceed in that vein. Many of the new member states would like to see compulsory modulation but I will be holding firm on that issue.
We had a good and constructive discussion on a number of issues. We will continue to be ad idem on many of these issues. I expressed my concerns arising from President Sarkozy's speech and those concerns were also raised by the Taoiseach. We will continue with what we have provided for up to 2013. I agree we must always look at market responses. For example, I would like to see a 3% increase in milk quota because it reflects market needs. We can work very well with the French.