NEWS RELEASE
Date: 29 March 2007
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£3.9 billion for the English countryside
A £3.9 billion budget for the new Rural Development Programme for England 2007 to 2013 has been agreed. This is more than double the budget available for the previous programme which ran from 2000-2006. This programme will implement the European Rural Development Regulation - also known as the Second Pillar of the Common Agricultural Policy.
£3.3 billion of the total budget will be allocated to agri-environment and other land management schemes. This funding will help farmers manage the land more sustainably and deliver important environmental outcomes on biodiversity, landscape and access, water quality and climate change. Some £600 million will also be made available to make agriculture and forestry more competitive and sustainable and to enhance opportunity in rural areas.
The rate of voluntary modulation (the transfer of funds from farming subsidies in the first pillar of the CAP to rural development schemes) required to underpin this budget will be 12% for 2007, rising to 13% for 2008, and 14% for the years 2009-2012.
80% of the money raised through voluntary modulation will fund agri-environment schemes and will be co-financed by the UK Government at a rate of 40%. This means that for every £60 raised for agri-environment schemes through voluntary modulation, the Government will contribute a further £40 from national funds. Based on current plans, this decision to co-finance voluntary modulation will result in a net total increase to overall CAP spending in England of some £725 million by end 2013.
Making the announcement today Environment Secretary David Miliband said:
"For many in the countryside looking after the environment is a way of life. I hope that the near £4 billion funding, more than double the previous budget, secured today will help all concerned build on the significant achievements already made and continue to make the English countryside a thriving community for those who live and work there as well as a beautiful place to visit.
"Funding an ambitious programme of this size is made possible through continued use of voluntary modulation and significant co-financing from the Defra budget. Shifting funding from farm subsidies to payments for environmental services - green farming - is consistent with the Government's long term vision for the reform of the Common Agricultural Policy ".
The agri-environment schemes in particular will help Defra to achieve Public Service Agreement (PSA) targets on farmland birds and sites of special scientific interest (SSSIs) as well as delivering wider biodiversity benefits and important elements of natural resource protection and sustainable landscape management.
This will also build on the popularity of the Entry Level scheme with farmers and provide increased funding for the more restricted Higher Level scheme, which is targeted at areas of particular importance and sensitivity.
Taken together, the schemes will protect and enhance the most valuable parts of our countryside while making a further contribution to reform of support for farmers under the EU's Common Agricultural Policy.
Notes to editors
• The new Rural Development Programme for England implements the European Rural Development Regulation (EC) No 1698/2005.
• This regulation requires member states to prepare and submit 7-year programmes for rural development support which aim to deliver important social, economic and environmental outcomes for farmers and rural areas. In the UK , England , Scotland Wales and Northern Ireland will all be submitting separate programmes.
• The next Rural Development Programme in England will be jointly funded by the EU, through the European Agricultural Fund for Rural Development (EAFRD), and the UK Government.
• Since 2001, the UK has made use of European Regulations which allow member states to transfer funds from pillar 1 of the CAP to pillar 2 at their discretion - so called voluntary modulation.
• The old legal basis for voluntary modulation expired in 2006. The European Council agreed provisions for a new voluntary modulation regulation in December 2005, but agreement on this new mechanism was only reached last Monday in European Agriculture Council following a lengthy procedure with the European Parliament. This new regulation no longer requires voluntary modulation funds to be co-financed, but leaves it to member states to decide whether or not to provide co-financing and at what rate.
• The total budget of approximately £3.9 billion is constructed from:
• England 's share of the UK allocation of EU money from the European Agricultural Fund for Rural Development (EAFRD) of approximately £750 million ;
• Exchequer co-financing of approximately £850 million which is provided as counterpart to the EAFRD allocation, this includes some state-aid funded;
• Approximately £1.4 billion which will be generated under the new voluntary modulation regulation during 2007-2013. 80% of this will be allocated to agri-environment schemes and will be co-financed with national funds at a rate of 40%, resulting in approximately £700 million of exchequer expenditure.
• Approximately £100 million will be generated under the old voluntary modulation regulation (this equates to 6% of SPS 2006 payments) and under the old rules will be co-financed with approximately £100 million of national money.
• For further information, please see: www.defra.gov.uk/erdp/rdp07_13/index.htm
End
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Page published: 29 March 2007