Section A: The budget for the Rual Development Programme 2007-2013
- How much will be made available for rural development support in England under the RDPE for 2007 - 2013?
- How is the total budget of £3.9 billion constructed?
- How much will my region receive for economic and social rural development activity under Axes 1 and 3?
- How were the regional allocation criteria for Axis 1 and 3 determined?
- The regional allocations for the RDAs under Axes 1 and 3 do not add up to the same amount as the total budgets for Axes 1 and 3. Why is this?
- How will Axis 2 money be divided between the regions?
- How much money is available for agri-environment schemes, including Environmental Stewardship? Is this more or less than the last Programme?
- Is there enough funding for the Higher Level Scheme (HLS)?
- What is modulation?
- How long has the UK used voluntary modulation?
- What will the rates of voluntary modulation be?
- How much money will be raised from voluntary modulation receipts?
- Will voluntary modulation funds be co-financed with domestic money?
- Will the UK be operating a single rate of voluntary modulation at the Member State level?
- What are Scotland, Wales and Northern Ireland doing with VM?
- Will VM receipts have to be applied across all three Axes of the Rural Development Regulation?
- Is an impact assessment required for VM?
- What was the UK's allocation of EU rural development funding?
- How is the overall allocation constructed?
- How was the UK's allocation of European funding determined?
- How do EU State Aid rules apply to RDPE?
1. How much will be made available for rural development support in England under the RDPE for 2007 - 2013?
- Approximately £3.9 billion over the 7-year period. This is more than double the amount of money available for the last programme (2000-2006) and firmly underlines the Government's commitment to rural areas.
2. How is the total budget of £3.9 billion constructed?
- In broad terms, £750 million represents England's share of the UK's EU rural development allocation from the European Agricultural Fund for Rural Development (EAFRD). This part of the budget will be co-financed with approximately £850 million of national funding.
- The total amount of voluntary modulation receipts we expect to raise over the 7-year period is approximately £1.45 billion, and this will be co-financed with approximately a further £740 million of national funds.
- Cornwall and the Isles of Scilly will receive an additional £55 million in support of the EU's 'Convergence' Objective.
- The tables below show funding for the new programme by source and by Axis:
- The regional allocations (i.e. the funding that will be delivered b2y the RDAs) for the 7 years of the Programme for Axis 1 EAFRD, Axis 1 voluntary modulation, Axis 3 EAFRD and Axis 3 voluntary modulation are as shown below:
- In view of the strategic priorities for Axis 1, with a focus on raising the competitiveness of the agriculture sector, Ministers concluded that allocation based on the proportion of agricultural labour per region was the most suitable method for the distribution of funds between regions. Ministers further concluded that there was a need to take account of the additional needs of farming in upland areas, so a weighting based upon proportion of land designated as Severely Disadvantaged has been applied.
- The Axis 1 VM receipts shown in the table above will be used to assist the livestock industry in tackling some of the particular challenges it faces by supporting the following three main objectives:
- to bring about improvements in the competitiveness of each individual livestock sector to help them compete in the marketplace;
- to assist farmers in meeting their changing responsibilities and facilitate improved animal health and welfare; and
- to provide support for farmers in enhancing the efficiency and effectiveness of on-farm management of nutrients.
- Ministers decided that the Axis 1 VM regional allocation should be based on numbers of livestock (using standard livestock units), but with a weighting towards the density of dairy cattle because of the particular burdens that nutrient management issues will cause for the dairy industry.
- The Axis 1 VM regional allocations are lower than for Axis 3 VM. This is because approximately £47m has been set aside from the Axis 1 VM budget to support the establishment the perennial energy crops miscanthus and short rotation coppice, under the national Energy Crops Scheme delivered by Natural England.
- For Axis 3 (including Axis 3 VM), Ministers decided that the regional allocation should be balanced between rural population criteria and weighting towards economically lagging areas. This reflects the focus of Axis 3 on encouraging diversification and improving the quality of life.
- This is because, according to EU Rural Development Regulation rules, certain elements of other aspects of the Rural Development Programme for England also need to be programmed against Axes 1 and 3. The Energy Crops Scheme, which will provide around £47 million for new perennial energy crops, is funded under an Axis 1 measure. Certain Higher Level Stewardship options related to the historic environment are funded under an Axis 3 measure. This has not affected the allocations made to the RDAs.
- The measures under Axis 2 (agri-environment, forestry, uplands and energy crops support) will continue to be operated as national schemes without formal regional budgets.
- Agri-environment spend will increase from about £1 billion under the previous programme to about £3 billion in the new programme. This will enable Entry Level Stewardship (ELS) to remain open to all farmers.
- The Higher Level scheme is particularly important in relation to meeting our Sites of Special Scientific Interest (SSSI), biodiversity and water quality targets. The scheme is competitive and applications have to meet specific criteria to be accepted.
- The funding available takes account of the outcomes which the scheme is designed to achieve and should allow us to enter into enough good quality agreements to meet the objectives we are seeking.
- Modulation is the transfer of EU Common Agricultural Policy (CAP) funds from payments to farmers (Pillar 1 of the CAP) to agri-environment and other rural development schemes (Pillar 2 of the CAP).
- Voluntary modulation has been permitted by European rules since 1999, up to a rate of 20%.
- Using voluntary modulation in England since 2001 has enabled us to devote additional resources to agri-environment schemes..
- The rate for Single Payment Scheme (SPS) and other direct payments will be 12% for 2007, 13% for 2008 and then 14% for 2009 to 2012. Under European rules, receipts modulated in one year from direct payments are made available for use on rural development funds in the subsequent year i.e. receipts generated in 2007 will be spent in 2008.
- The total amount of voluntary modulation receipts we expect to raise over the 7-year period will be approximately £1.45 billion, which will be co-financed with around £740 million of exchequer funding.
- This is around £95 million more that originally expected. The details were provided in a Commission Decision published in October 2007; previous figures were estimates. In addition, £101 million of ‘old’ voluntary modulation receipts raised in 2006 will be available and this will be co-financed with £94 million.
- Most of it will. Around 80% of all voluntary modulation raised will be spent under Axis 2 (land management measures, aimed at improving the environment and countryside) and will be co-financed with national exchequer money at the rate of 40%. So, for every £60 of VM spent under Axis 2, the Government will contribute a further £40.
- No - different rates will apply in each part of the UK. These arrangements reflect the fact that each part of the UK has its own regional rural development programme with differing priorities and funding requirements. This was one of the amendments that the UK secured to the Voluntary Modulation Regulation during the negotiations.
- Decisions in the other regions of the UK will be taken by devolved ministers in line with devolution arrangements. Northern Ireland has announced its rates of voluntary modulation, which will rise from 5% in 2007 to 9% by 2011. In Scotland, the rates will be 5% in 2007, 8% in 2008, 8.5% in 2009, and 9% from 2010 to 2012. Wales will not be using VM in 2007. The rates for 2008 to 2012 will be 2.5%, 4.2%, 5.8% and 6.5% for 2011 to 2012. One of our successes in the EU negotiations was obtaining the flexibility to set appropriate VM rates at the regional level, in line with devolution.
- Yes - the new Voluntary Modulation regulation requires us to spend the VM receipts at the same minimum proportions as the EAFRD: that is at least 10% on Axis 1, 25% on Axis 2, 10% on Axis 3 and at least 5% of the funds delivered through the Leader approach.
- Yes. The European Council Regulation for Voluntary Modulation requires Member States to communicate formally to the European Commission the rates of voluntary modulation that will apply during the period 2007-2012, and to conduct an assessment to gauge the impact of the application of voluntary modulation. The document which fulfils these regulatory requirements was submitted to the European Commission on 12 June 2007. An accompanying Q&A is also available.
- The UK's rural development allocation for the 7-year period is €1,909,575,420 - approximately £1.3bn.
- This overall EAFRD allocation is constructed from a number of separate elements:
- A share of the €18.91 billion allocated to EU15 Member States from the replacement to the guarantee element of the current European Agricultural Guidance and Guarantee Fund (EAGGF).
- Receipts arising from the compulsory modulation of direct payments under Pillar 1 of the CAP, which are distributed to the older EU15 Member States in accordance with the 2003 CAP Reform agreement.
- Transfers from the Structural Funds part of the EU budget, which reflects the mainstreaming of Leader and Convergence funding (which replaces the Objective 1 programme) into rural development support
- The EAFRD element reflects the budget allocated to rural development by the December 2005 European Council, including the small Leader transfer, and it reflects historic EU expenditure from before 2000 on rural development schemes. This was the basis used for allocating funds from the Guarantee element of the European Agricultural Guidance and Guarantee Fund during 2000-2006, both to the UK and within the UK.
- The Compulsory Modulation breakdown reflects the current respective percentage share of Pillar 1 direct payments across the four UK regions (e.g. Scotland has 16% of the direct payments budget, and so receives 16% of the compulsory modulation receipts). This helps to ensure that, as far as possible, receipts are returned to the UK region from which they were generated.
- The Convergence allocation is based upon the relative historic budget share from the EAGGF element of Objective 1 budgets for 2000 - 2006 of the three remaining regions eligible for Convergence funding during 2007- 2013 (Cornwall and the Isles of Scilly, Highlands and Island of Scotland, West Wales and the Valleys). Northern Ireland no longer qualifies for Convergence status so its share of this element of the budget is zero.
- Unlike the previous RDR, Rural Development Programmes approved for the 2007-2013 programming period are required to include detail of how funding will comply with EU State Aids rules. Chapter 9 of the RDPE Programme Document sets out the rules that will be applied and is based on the type investment RDPE deliverers are expected to make under each of the RDR measures utilised in England. The table was not required to include activity in the agricultural sector where the Rural Development Regulation sets permitted levels of aid intensity.
- With the wide ranging activity proposed under Axis 1 and 3, the position on State Aid coverage is complex – particularly for Axis 1 where funding is also made available for forestry and food activity. A guidance note [PDF] (116 KB) has been compiled that attempts to set out the position as clearly as possible.
| RDPE 2007- 2013: 7- year Budgets by funding source | |
| £m | |
| European Money | 2,305 |
| Of which: | |
| EU funds from the EAFRD | 749 |
| Old Voluntary Modulation Receipts | 101 |
| New Voluntary Modulation Receipts | 1,455 |
| Exchequer Money | 1,682 |
| Of which: | |
| Exchequer Co-Financing of EAFRD Funds & State Aid | 850 |
| Old Voluntary Modulation Exchequer Co-financing | 94 |
| Exchequer Co-Financing for new VM receipts | 738 |
| Total | 3,987 |
| RDPE 2007- 2013: 7- year Budgets by policy area | |
| £m | |
| Axis 1 | 298 |
| Axis 2 | 3,286 |
| Axis 3 | 348 |
| Cornwall | 55 |
| Total | 3,987 |
Note: All figures are approximate and depend upon exchange rates.
3. How much will my region receive for economic and social rural development activity under Axes 1 and 3?
|
Axis |
1 |
Axis |
1 VM |
Axis |
3 |
Axis 3 |
VM |
|
Region |
% share |
Budget |
% share |
Budget |
% share |
Budget |
% share |
Budget |
Total |
North East |
5.8% |
£8.20m |
6.3% |
£6.76m |
11.4% |
£16.13m |
11.4% |
£16.59m |
£47.69m |
North West |
14.2% |
£20.09m |
17.0% |
£18.38m |
12.7% |
£17.97m |
12.7% |
£18.49m |
£74.92m |
Yorkshire and the Humber |
13.5% |
£19.10m |
12% |
£12.89m |
11.8% |
£16.69m |
11.8% |
£16.45m |
£65.86m |
East Midlands |
11.2% |
£15.79m |
11.4% |
£12.25m |
11.3% |
£15.99m |
11.3% |
£16.45m |
£60.53m |
West Midlands |
12.5% |
£17.68m |
15.2% |
£16.34m |
7.3% |
£10.33m |
7.3% |
£10.63m |
£54.97m |
East of England |
12.0% |
£16.98m |
7.0% |
£7.52m |
14.4% |
£20.36m |
14.4% |
£20.96m |
£65.82m |
South East + London |
13.5% |
£19.10m |
8.0% |
£8.59m |
12.8% |
£18.11m |
12.8% |
£18.64m |
£64.43m |
South West |
17.3% |
£24.47m |
23.1% |
£24.83m |
18.3% |
£25.88m |
18.3% |
£26.64m |
£101.83 |
England Total |
100% |
£141.46m |
100% |
£107.56m |
100% |
£141.46m |
100% |
£145.56m |
£536.06m |
4. How were the regional allocation criteria for Axis 1 and 3 determined?
5. The regional allocations for the RDAs under Axes 1 and 3 do not add up to the same amount as the total budgets for Axes 1 and 3. Why is this?
6. How will Axis 2 money be divided between the regions?
7. How much money is available for agri-environment schemes, including Environmental Stewardship? Is this more or less than the last Programme?
8. Is there enough funding for the Higher Level Scheme (HLS)?
Voluntary Modulation (VM)
9. What is modulation?
10. How long has the UK used voluntary modulation?
11. What will the rates of voluntary modulation be?
12. How much money will be raised from voluntary modulation receipts?
13. Will voluntary modulation funds be co-financed with domestic money?
14. Will the UK be operating a single rate of voluntary modulation at the Member State level?
15. What are Scotland, Wales and Northern Ireland doing with VM?
16. Will VM receipts have to be applied across all three Axes of the Rural Development Regulation?
17. Is an impact assessment required for VM?
UK Allocation from the European Agriculture Fund for Rural Development (EAFRD)
18. What was the UK's allocation of EU rural development funding?
19. How is the overall allocation constructed?
20. How was the UK's allocation of European funding determined?
|
EAFRD |
Compulsory Modulation |
Convergence |
England |
53% |
66% |
32% |
Scotland |
23% |
16% |
15% |
Wales |
13% |
9% |
53% |
Northern Ireland |
11% |
9% |
0% |
Total |
100% |
100% |
100% |
State Aids
21. How do EU State Aid rules apply to the RDPE?
Page last modified:
29 October, 2008
Page published: 21 July, 2005