The agricultural industry has welcomed news that the amount of funding transferred away from direct payments to farmers to environmental schemes will stay below the minimum.
Environment secretary Owen Paterson announced today that the amount of funding transferred will rise from nine to 12 per cent, remaining below the maximum of 15 per cent.
CLA president, Henry Robinson, said: “We are pleased Mr Paterson has listened to the industry and moved 12 per cent from Pillar One to Pillar Two, rather than choosing the maximum figure allowable of 15 per cent.
“He has struck a reasonable balance between supporting the environment and rural development and ensuring that farmers in England get a fair deal.”
Robinson said it was right the government is continuing to recognise - through investing in agri-environment schemes - the great contribution that farmers make to the environment.
He added: “However, it is important to remember there is a great deal of detail still to emerge.”
NFU deputy president Meurig Raymond said: “I am delighted the Environment Secretary has decided to keep the rate of modulation below the maximum for the four years until it is reviewed.”
The move is part of changes to Common Agricultural Policy (CAP) regulations.
A further rise taking the rate of transfer up to 15 per cent will depend on a review in 2016 of the demand for environmental schemes and the competitiveness of English agriculture.
Paterson said the decision marks a significant change to the allocation of CAP payments.
“Even with a smaller overall CAP budget, the government will be spending a bigger share of the budget on the environment than before,” he said.
“Today’s decision will see £3.5 billion invested in the environment and rural development schemes over the next seven years.
During the EU negotiations, the UK pressed for every country to have the freedom to make choices about how it spends its funding.
One of these choices is the option to transfer a proportion of the budget for farmers’ direct payments into the rural development budget.
England’s hill farmers will also benefit from today’s announcement. For the first time, they will receive the same direct payment rate on their upland farmland as their lowland counterparts.
Paterson said: “England’s £15 billion Common Agricultural Policy must deliver real benefits to farming, rural businesses, the countryside and the taxpayer.”
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