Farmers welcome cut in modulation to 12pc as Defra listens to NFU concerns

Three different rates of modulation will apply to farmers in mainland Britain following Defra's change of heart.

The decision to set a 12pc rate for the first four years from 2014 rather than the 15pc was welcomed by the National Farmers' Union, which urged MPs to persuade Defra secretary Owen Paterson not to impose the maximum rate.

He had wanted to cut farm direct support payments in England by the 15pc maximum allowed by Europe, so-called pillar 1 to the rural and environmental pot, pillar 2. The NFU had argued that the government's environmental objectives could be met by nine per cent.

However, the NFU deputy president, Meurig Raymond was angry that farming in Wales would be disadvantaged and would have the highest rate of modulation in Europe. Welsh farmer, Mr Raymond, who farms about 3,500 acres with twin brother Mansel in Pembrokeshire, added: 'I must also express my deep disappointment at the decision by the Welsh Assembly Government to introduce a 15pc rate.'

To add to the confusion, Scotland will have a 9.5pc modulation rate. In Germany, it has been set at 4.5pc and in France at three per cent.

Mr Raymond, in a less than thinly-disguised criticism of a sustained campaigned by wildlife groups, said: 'This issue has falsely been presented as a fight between farming and the environment. It is not. Even at nine per cent transfer the NFU has demonstrated that we could continue to meet all our on-going commitments to agri-environment programmes and have a surplus to spend on other measures. At 12pc there will be additional funds available and we will play our full part in determining how these might best be spent.'

The CAP Coalition for a Fair Deal for English Farmers - which includes the NFU, the CLA, TFA and 35 other agricultural organisations - welcomed Defra's decision.

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Jeremy Walker, chairman of the Tenant Farmers' Association, said that it showed that Defra's ministers were prepared to listen.

In the latest edition of the NFU's journal, British Farmer and Grower, Mr Paterson was pictured on the front page watching a rugby match, saying 'Come on chaps! The less we have, the better we'll compete' as England's three-man scrum faced an eight-strong pack of European players.