At the Council on 27 January, I pointed out that modulation is inequitable in that its impact on different sectors varies, depending on the extent to which direct payments feature in the different support regimes. Those sectors where direct payments do not apply are not affected at all, whereas beef and sheepmeat, which are heavily dependent on direct payments, will be affected most severely. I also drew attention to the complete inadequacy of the €5,000 exemption threshold, a level which would catch farmers on quite low incomes. Direct payments are an absolutely essential element of farm incomes, amounting to €1.6 billion per annum and account for 69% of Irish farm incomes. Any reduction in these payments would impinge directly and significantly on farmers' incomes.