As regards modulation, the rate has been reduced from 6% to 5% when fully operational. The €5,000 franchise or exemption will ensure that almost half of Irish farmers will not be affected by modulation. My objective in ensuring that modulated funds are retained in Ireland for agriculture-based rural development measures has also largely been achieved. Up to 85% of funds modulated in Ireland will stay in the agriculture sector here and will be distributed by my Department. The outcome was a major improvement on the original proposal, where the combined effect of modulation and degression, would have resulted in €464 million being siphoned off direct payments over the period 2006-12.