EU gives way to Blair's modulation demands

UK - Compulsory modulation is set to rise under new EU budget proposals, tabled by commission president Jos Manuel Barroso.

The plans are intended to kick-start negotiations on the EU's financial perspectives for 2007-2013, which stalled last June, when Prime Minister Tony Blair refused to make any concessions on the UK's budget rebate unless there was further reform of the CAP.

This was despite an agreement he had already signed in Brussels in 2002 fixing direct payments to farmers until 2013.

In a letter sent to Mr Blair last week, Mr Barroso said this agreement should be "fully respected".

But he also called for "more dynamism" in agricultural spending and suggested a fundamental review of the EU budget.

Specifically, he called for a further shift in farm support away from direct aids and towards rural development.

This should be achieved by increasing the level of compulsory modulation by 1% a year from 2009.

Source: FWi