The Commission is proposing to introduce a system of modulation and degressivity over the period 2006 to 2012. Farmers receiving less than €5,000 in direct payments would not be affected. That proposed threshold would be far too low. In my response I stated clearly it was unrealistic for any farmer receiving €5,000 in direct payments to be exposed to reductions. Farmers in receipt of between €5,000 and €50,000 a year in direct payments would have their direct payments in excess of €5,000 reduced by 12.5% and farmers receiving over €50,000 a year would have their payments in excess of €50,000 reduced by 19% by 2012. That would be a gradual reduction up to the 2012. This money would then be used for other purposes. The first 6% of these reductions would be transferred to rural development, through various Leader programmes and the remainder would be used to meet future EU financing needs.