Brussels, 19/03/2007 (Agence Europe) - On Monday 19 March, European agriculture ministers reached a unanimous decision in favour of a political agreement (with Latvia's abstention) on implementation of voluntary modulation of direct aid from 2007 (EUROPE 9386). This agreement complies with the compromise concocted by the German presidency for satisfying the European Parliament, which criticised the initial proposal resulting from the decision from the European Council of December 2005 on the financial framework for 2007-13. Contrary to the initial text, which should have affected all member states, the Council's compromise text only affects the United Kingdom and Portugal over possibilities for using voluntary modulation (this involves reducing agricultural payments by 20% for transferring these funds to rural development funds). The regulation is still expected to be formally adopted by the Council of EU ministers. In the meantime, the EP is expected to release part of the 20% funding for rural development funds for 2007 on Wednesday 21 March. It had put this in reserve at the beginning of the year to encourage member states and the Commission to withdraw the initial draft on voluntary modulation.
In practice, the new regulation allows the United Kingdom to continue to apply voluntary modulation according to its own criteria: different modulation rates according to the region and without derogations for the first €5,000 in direct aid per farm. Voluntary modulation will also be used by Portugal where rural development funds are paid without national co-financing. In a declaration, the Council and Commission agreed for modulation to be examined during the “bill of health” for the CAP in 2008-09. Voluntary modulation is being added to compulsory modulation that has existed since 2005 (and which currently stands at 5% of direct aid). (lc)