SNP siphons off part of EU farmers' aid for green plans

Published on Friday 1 June 2007 01:08

SCOTLAND'S farmers are to lose some of their subsidies, the Scottish Executive has announced.

Richard Lochhead, the secretary for rural affairs, set the rate at which cash will be diverted to a general fund at 5 per cent, rising to 9 per cent by 2010.

The money will go into a 1.6 billion package of investment for agriculture, forestry, environment and community projects, MSPs were told. Farmers already have 5 per cent of European Union aid payments withheld through a system of "compulsory modulation".

The funds to be diverted are an additional "voluntary modulation" of 5 per cent, which will remain at that level this year. But this will rise to 8 per cent next year, 8.5 per cent in 2009 and 9 per cent from 2010 to 2012, Mr Lochhead said.

Fears had been expressed that modulation levels might reach 20 per cent in total. Mr Lochhead said: "We have agreed that voluntary modulation should not substitute for expenditure by the government or the European community, but should be in addition to these contributions where essential. Farmers must have confidence that they are able to benefit from the schemes funded by modulation."

Mr Lochhead said he has allocated a further 70 million in funding to avoid higher levels of modulation. But he stressed farmers and land managers must deliver environmental benefits.

He made it clear that the Nationalist government was hamstrung by the tight time-scale on the issue, with the modulation levels to be submitted to Westminster today, which then notifies Brussels by 12 June.

Under EU agricultural reforms, aid is paid in the form of a single payment to each farm, amounting to 400 million a year, rather than the previous array of subsidies.

Modulation sees part of the payment withheld for environmental and other development schemes through the Scottish Rural Development programme for the period 2007-13. The scheme's 1.6 billion of funding comes from the Executive, the European Agriculture Fund for Rural Development and modulation of the single farm payment.

Jim McLaren, president of the National Farmers' Union Scotland, said farmers needed stability: "That is why we have impressed on the Scottish Executive the need to keep rates to the absolute minimum."

But Labour's Rhona Brankin, a former environment minister, voiced anger that MSPs would not have the opportunity to vote on the measures, while

John Scott, the Conservative rural affairs and environment spokesman,

claimed the more voluntary modulation was increased, the more the profitability of farmers was reduced.

Sarah Boyack, a former Labour environment minister, pointed out that neither of the two Green MSPs was in parliament for the debate. "Maybe it's simply because they are embarrassed to be associated with today's... missed opportunity for Scotland's environment," she said.