Brussels, 12/09/2005 (Agence Europe) - In Strasbourg on 6 September, the European Parliament approved the decision to transfer EUR 655 million in 2006 from Heading 1a (market expenditure) to Heading 1b (Rural Development) of the EU's budget, in line with the idea of modulating direct aid introduced by the 2003 reform of the Common Agricultural Policy (CAP).
On 15 July, the Council and European Parliament agreed to endorse the proposal requiring a technical adjustment in the current Financial Perspectives (2000-2006, see EUROPE 8992). The transfer of credits will not alter the overall ceiling of the agriculture section of the budget because the change simply moves the amount from one sub-heading to another. The modulation of direct aid will mean a 3% cut in 2005, 4% in 2006 and 5% from 2007-2012 of direct aid payments of over EUR 5000. The savings thus generated will be used to increase funding for rural development. The modulation starts in 2005 but the savings will only become available in the following year.