Brussels, 06/03/2007 (Agence Europe) - The German presidency is still optimistic about getting the EU member states to agree, at the Agriculture Council of 19 March, on the controversial issue of optional 'modulation' of direct farm aid (see EUROPE 9365). The presidency will be leaving no stone unturned in its attempts to satisfy the European Parliament's demands. By a thumping majority on 14 February 2007, the EP rejected the plan to allow countries to transfer up to 20% of farm aid to rural development programmes if they so desire (see EUROPE 9366 on the EP vote).
Germany's Farm Minister, Horst Seehofer, held a video conference on Tuesday 6 March with Lutz Goepel (CDU), the European Parliament rapporteur on the issue, Jan Mulder (ALDE, the Netherlands) and Herbert Bosch (PES, Austria) in an attempt to resolve the dispute over optional modulation of aid and, most importantly, to get the EP to lift its reservations and release the remaining 20% of rural development aid available for 2007. The provisionally confiscated money runs the risk of being cancelled and holding back the implementation of rural development programmes in the member states. Seehofer is all the more determined to get the funding released because Germany is one of the member states that has made the most progress in drawing up its national strategy for implementing rural development aid.
Various sources suggest that MEPs have rejected the German presidency's initial draft compromise aiming to strike a fairer deal for farmers (statements of intention on co-funding, impact studies and the like). To avoid inter-institutional wrangling and the danger of the 20% rural development credits being cancelled, Seehofer is reported to have said at the video conference that he would be able to fully meet EP demands, agreeing to ask the European Commission to withdraw its proposal and giving the UK and Portugal the option of introducing optional modulation, as they have been requesting. A statement to this effect may soon be submitted to MEPs in order to get the EP's budgetary committee to release the confiscated funding. Seehofer's suggestion still has to be examined by the EU Council of Ministers, however, and will have to be accepted by the Commission which, despite the well-known problems with the optional modulation idea decided by the European Council in December 2005, has thus far signalled that it was continuing with its proposal. Optional modulation is highly charged politically and it cannot be ruled out that the European Council will be looking at the issue at the 8-9 March summit.
At the meeting of the Special Agriculture Committee (SAC) on Monday 5 March, the German presidency briefed member states on the EP's main demands. The EP wants an increase in compulsory modulation (which came into force in 2005) which would filter down into the equivalent reduction in the rate of optional modulation. 11 member states, however, including France, Austria, Ireland, Spain, Belgium and Luxembourg, are opposing the request (accepted by the Commission) on the basis that no decisions can be made ahead of the 2008 and 2009 review of the Common Agricultural Policy (CAP).
Most of the other EP demands are backed by the SAC, namely a review of the entire modulation system during the 2008 and 2009 review of the CAP; and a statement by countries deciding to make use of the optional modulation to not cut aid by the 20% maximum in all rural regions. If things go according to plan, the SAC will be discussing the issue again on 12 March ahead of the potentially decisive meeting of EU farm ministers on 19 March. (lc)