Secretary of State for Environment, Owen Paterson, has announced that 12% of CAP funds for England will be transferred from farmers’ pillar 1 direct payments to pillar 2 rural development.
The NFU believes this is a sensible and pragmatic decision which will help England’s farmers and growers to remain competitive, produce more food and maintain the environment.
NFU Deputy President Meurig Raymond said: “I am delighted that Owen Paterson has decided to keep the rate of modulation below the maximum for the next four years along with a Government review to be launched in 2016 to consider the transfer rate from payments in 2018. I appreciate this was not any easy decision for the Secretary of State to make but we are pleased that he has listened to our arguments.
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“I would like to thank the EFRA Select Committee and many rural MPs who have supported us in recent days.
“The reduced rate of transfer to the Rural Development budget will mean that £224million will be retained in the farming sector over the next four years.
Extract from the written parliamentary statement by The Secretary of State for Environment, Food and Rural Affairs
- 12% will be transferred from farmers’ pillar 1 direct payments to pillar 2 rural development. This money will improve the environment, grow the rural economy and create jobs.
- A review will be held in 2016 into the demand for agri-environment schemes and the competitiveness of English agriculture. This is with the intention of moving to a 15% transfer rate from pillar 1 direct payments to support the final two years of the pillar 2 rural development programme.
- 5% of the new rural development programme funding will be allocated to the Local Enterprise Partnerships (LEPs) through the Growth Programme. In total 13% of rural development funds will be spent on growth-focused schemes, including LEADER and farming competitiveness. I will ensure that there is a meaningful role for LEPs to help deliver growth through all of these elements of the programme.
- The new CAP Greening requirements will be implemented through the basic measures set out in the EU Regulation. We will work with interested groups on how we apply the Ecological Focus Area options to deliver real benefits for pollinators without adding complexity.
- We will help upland farmers by equalising the upland and lowland direct payment rates. We will take a decision about the moorland rate in spring 2014. This will allow us to carry out further modelling of the impact on upland farms.
- We will keep the implementation of direct payments as simple as possible by applying the minimum reduction on basic payments over €150,000 and keeping rules on the new active farmer test to a minimum.
“This issue has falsely been presented as a fight between farming and the environment. It is not. Even at nine per cent transfer the NFU has demonstrated that we could continue to meet all our on-going commitments to agri-environment programmes and have a surplus to spend on other measures. At 12 per cent there will be additional funds available and we will play our full part in determining how these might best be spent.
“The decision to review the rate from 2018 onwards is the right one, and one we have consistently pressed for. If by then there are valuable programmes in the rural development programme, including the new Environmental Land Management Scheme, and there is clear evidence of demand, the NFU would certainly not oppose an increase in the modulation rate.
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“Of course, the 12 per cent rate is higher than the current rate of nine per cent and more than most of our closest competitors, but the NFU acknowledges that once the decision had been taken at EU level to reduce the UK’s Rural Development budget allocation and once our own Treasury decided to reduce its contribution, it was difficult to avoid some increase in the rate. I must also express my deep disappointment at the decision by the Welsh Assembly Government to introduce a 15 per cent rate.
“The NFU strongly believes that voluntary action by farmers is generally a more effective way of meeting specific challenges. For this reason we have committed to promoting action that will encourage pollinators and improve water quality. We have pledged ourselves to ensuring these initiatives produce positive results.
“The NFU is well aware that there was strong pressure from other parts of government to transferring some of the CAP budget outside the farming sector to the so called “growth agenda”. This would have been wrong on many levels and we are pleased that Owen Paterson has largely resisted this move.
“The NFU remains convinced that the CAP Reform agreed in Europe this year was a missed opportunity and a step in the wrong direction. I am, however, pleased to state that Owen Paterson has made a number of decisions which have made the best of what was otherwise a bad job. This is the case for the modulation rate, but also the rolling on the existing payment entitlements, avoiding gold-plating of greening by implementing the standard EU measures, minimising distortions by applying scale back at the minimum level, avoiding the capping of payments, and streamlining the system of direct payments by not implementing any of the optional aid schemes in England. The NFU and Defra have both tried to find an alternative to the madness of the three crop rule, but unfortunately the European Commission has resisted attempts to implement an alternative approach that would work on the ground. We also look forward to continuing discussions with Defra to ensure that farmers in the moorland regions of England are treated fairly.”
The announcement on CAP was also welcomed by the CAP Coalition for a Fair Deal for English Farmers - which includes the NFU, the CLA, TFA and 35 other agricultural organisations.
CLA President Henry Robinson said: “We are pleased Mr Paterson has listened to the industry and moved 12 percent from Pillar One to Pillar Two rather than choosing the maximum figure allowable of 15 percent. He has struck a reasonable balance between supporting the environment and rural development and ensuring that farmers in England get a fair deal.”
TFA National Chairman Jeremy Walker said: “Today's announcement shows the benefit of industry lobbying and also shows that DEFRA Ministers are willing to listen to reasoned argument.”