Denis Naughten (Longford-Roscommon, Fine Gael)
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Question 500: To ask the Minister for Agriculture and Food the modulation and national reserve cuts in each of the years 2005 to 2008, inclusive; and if she will make a statement on the matter. [6572/06]

Mary Coughlan (Donegal South West, Fianna Fail)
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The position is that Ireland's financial ceiling under the single payment scheme for 2005 was €1,260 million of which 3%, €37.8 million, had been provisionally set aside to fund the national reserve. EU regulations require that where the sum of individual entitlements exceeds the financial ceiling, a percentage linear reduction must be applied in order to observe the ceiling. In Ireland's case, the cost of funding successful applicants under force majeure and new entrants during the reference period has meant that the sum of individual entitlements has exceeded our national ceiling, requiring a 1.18% linear reduction of all entitlements. This linear reduction will be accommodated within the 3% already deducted for the national reserve. No further reductions will be applied annually to fund the national reserve. However, there will be a claw-back from sales of entitlements in certain circumstances which go towards replenishing the national reserve.

In so far as modulation is concerned, the EU regulations provide that all amounts paid to farmers under the single payment scheme in 2005 must be subject to a 3% reduction. This will rise to 4% in 2006 and 5% annually thereafter. The regulations also provide, however, for a refund of modulated amounts each year in respect of the first €5,000 or less of each farmers' single payment. This will effectively mean that up to 50% of Irish farmers will not be subject to modulation.