Progress: Procedure completed
| Role | Committee | Rapporteur | Shadows |
|---|---|---|---|
| Lead | AGRI |
GOEPEL Lutz ( PPE-DE)
|
Lead committee dossier:
Legal Basis:
EC Treaty (after Amsterdam) EC 037
Legal Basis:
EC Treaty (after Amsterdam) EC 037Events
The present report has been prepared pursuant to Article 7 of Council Regulation (EC) No 378/2007, which provides that before 31 December 2008, the Commission shall submit to the European Parliament and to the Council a report on the application of voluntary modulation, accompanied, if needed, by appropriate proposals.
In the meantime, the Health Check of the Common Agricultural Policy (CAP) has responded to the need to increase funding for rural development by increasing the rate of compulsory modulation . The Member States applying voluntary modulation will gradually replace voluntary modulation by compulsory modulation, thus better aligning modulation rates across the EU.
Main conclusions : the report concludes that voluntary modulation has either been used for a short period (UK) or still has not been implemented as expected under the rural development programmes (Portugal). It is therefore very early to draw any firm conclusions on the impact of voluntary modulation on the economic situation of farms and their competitive position. Other factors (e.g. rising commodity prices, rising input prices, the credit crunch, etc.) have had probably a greater impact on total income from farming than voluntary modulation.
As regard other impacts, it should be noted that, in the UK, a wide range of environmental benefits is expected, mainly through agro-environmental measures where a significant increase in agri-environmental agreements has been observed.
Lastly, the Health Check of the Common Agricultural Policy (CAP) has responded to the need to increase funding for rural development by increasing the rate of compulsory modulation. The Member States applying voluntary modulation will gradually replace voluntary modulation by compulsory modulation, thus better aligning modulation rates across the EU. Therefore, there is no need to come forward with appropriate proposals as suggested in Article 7 of Regulation (EC) No 378/2007.
PURPOSE: to allow the Member States to voluntarily reduce direct payments to farmers, by up to 20%, and to use those amounts to finance rural development programmes.
LEGISLATIVE ACT: Council Regulation (EC) No 378/2007 laying down rules for voluntary modulation of direct payments provided for in Regulation (EC) No 1782/2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers, and amending Regulation (EC) No 1290/2005.
CONTENT: following a political agreement at its meeting on 19 March and following consultation with representatives of the European Parliament the Council adopted, with the abstention of the Latvian delegation, a Regulation laying down rules for voluntary modulation of direct payments under the common agricultural policy (CAP).
The Regulation has been approved following concerns in some Member States that they face difficulties in financing their rural development programmes following the adoption of Regulation (EC) No 1698/2005 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD). In order to support their rural development policies this present Regulation offers them the possibility of voluntarily reducing direct payments to farmers, by up to 20%, and using the funds to financial rural development programmes instead.
The Regulation introduces a legal basis allowing Portugal and the United Kingdom to apply the voluntary modulation scheme. A review of the issue of modulation is foreseen in the framework of the so-called "health check" of the CAP reform in 2008.
The United Kingdom delegation stated that four regions are planning to use voluntary modulation over the 2007-2013 period at less than 20% and that, in England, 80% of the modulation will be devoted to protecting the environment. The European Parliament had suspended 20% of EU 2007 budget appropriations for rural development unless the proposal to extend voluntary modulation to all Member States was withdrawn.
The suspension was lifted on 21 March, following unanimous political agreement on the presidency compromise. This will release 20 % bound appropriations from the reserve and allow the approval and implementation of rural development programmes for the new programming period without delay.
ENTRY INTO FORCE: 12 April 2007.
The European Parliament adopted a resolution drafted by Lutz GOEPEL (EPP-ED, DE) once again rejecting - under the consultation procedure - the Commission proposal for a voluntary modulation scheme under the common agricultural policy. (For details, please refer to the summary dated 24/01/2007.) The proposal was rejected by 89 votes in favour to 584 against with 19 abstentions The legislative resolution (confirming Parliament's rejection of the proposal) was adopted by 572 votes in favour to 65 against with 16 abstentions.
The committee adopted the second report by Lutz GOEPEL (EPP-ED, DE) once again rejecting - under the consultation procedure - the Commission proposal for a voluntary modulation scheme under the common agricultural policy. As the Commission had refused to withdraw the proposal, despite its rejection by Parliament at the November 2006 plenary sitting (see summary dated 13/11/2006), the proposal had been referred back to the committee in line with Parliament's Rules of Procedure.
Members of the committee felt that the grounds which had led them to reject the proposal the first time round (see summary dated 03/10/2006) remained valid. They believed that the Commission should, as part of the 'Health Check' in 2008/2009 for the agricultural sector, submit fresh proposals on the financing of the second pillar, on the basis of comprehensive impact assessments and intensive and early discussions with Parliament. In this connection, the question of a further compulsory modulation stage could then also be debated.
The plenary held a debate on the Commission proposal laying down rules for voluntary modulation of direct payments provided for in Regulation N° 1782/2003 (direct support schemes under the common agricultural policy). In the course of the debate, MEPs outlined the main reasons why the proposal should be rejected, as advocated by the committee responsible (see summary dated 03/10/2006):
the lack of any impact assessment, although the legal act would clearly have a substantial impact on farmers, the danger of discrimination against farmers within the EU, against which the proposal does not contain any precautions, the renationalisation of agricultural policy through the back door, certain aspects of the proposal which are unsatisfactory as far as budgetary and structural policy are concerned (particularly the omission of a co-financing requirement), the failure to involve Parliament in the preparation of such a far-reaching proposal, and the fact that the proposal on voluntary modulation largely prejudges the outcome of the 'Health Check' in 2008/2009 for the field of agriculture without involving Parliament as an equal partner in the discussion process, as provided for in the Interinstitutional Agreement on the Financial Perspective.
The following day, 14 November 2006, the plenary decided by 559 votes to 64, with 16 abstentions, to reject the proposal. As the Commission did not withdraw its proposal, the report was referred back to committee, in line with Parliament's Rules of Procedure.
The committee adopted the report by Lutz GOEPEL (EPP-ED, DE) rejecting - under the consultation procedure - the proposed regulation laying down rules for voluntary modulation of direct payments to farmers under the CAP. Under this scheme, Member States would be able to cut up to 20% of all direct payments and channel the money into rural development programmes instead.
MEPs were opposed to the proposal on the grounds that it would:
- jeopardise the survival of many farms;
- result in large national and regional disparities in the calculation of Community income support, thereby leading to market distortions;
- result in a renationalisation of agricultural policy;
- violate Parliament's rights of participation: under voluntary modulation, Member States could unilaterally, and without the comprehensive involvement of Parliament, increase expenditure in the field of rural development, which is classified as non-compulsory expenditure (over which Parliament has greatest powers under the budgetary procedure). Such a far-reaching change in the budget for non-compulsory expenditure without the involvement of Parliament would be a clear violation of the spirit and the letter of the Interinstitutional Agreement on budgetary discipline and sound financial management.
The Council held a policy debate on voluntary modulation. On 10 July 2006, an initial debate took place in the Special Committee on Agriculture, where the delegations voiced their views on this proposal. Their main concerns related to: the lack of flexibility vis-à-vis the voluntary modulation scheme proposed by the Commission; the need for greater flexibility regarding the specific rates of modulation in a Member State depending on the different regions; the extension dates for notifying rates; and an exemption from the minimum EUR 5000 franchise. Some delegations also expressed their opposition to the need for compliance with the minimum spending rates per axis for these funds.
The policy debate , which was held on 18 July 2006, led to political guidance in order to allow the Special Committee on Agriculture to make progress on this issue with a view to formal adoption by the Council towards the end of 2006, pending the opinion of Parliament.
During the policy debate, several delegations stated their support for the Commission’s proposal but called for greater flexibility on the chosen rate of voluntary modulation as well as voicing the possibility of an annual adjustment. In follow up to the discussion during the initial debate some delegations revisited the issue of applying different rates for regions in the same country. They also raised the matter of the two months deadline within which Member States need to notify the Commission of their chosen rates for modulation. A few delegations reiterated their wish for voluntary modulation to be exempted from the EUR 5000 franchise (a minimum threshold for direct payments below which compulsory modulation does not apply). The possibility that a distortion of competition among the Member States may result from the proposed scheme was also raised.
Commissioner Fischer-Boel reminded the Council of the decision to limit voluntary modulation to direct payments in the first pillar – direct payments and market expenditures – and indicated that the Commission had chosen to align the rules on voluntary modulation with those applicable to existing rules on compulsory modulation. Bearing this in mind the Commissioner stressed that the EUR 5000 franchise applicable to compulsory modulation would also apply to voluntary modulation, as well as the minimum spending rates per axis for rural development. As such, applying a regional application of voluntary modulation would be a departure from the compulsory modulation rules and would, furthermore, be difficult to manage.
On the request to adjust the modulation rate annually, Commissioner Fischer-Boel pointed out that modifying rates upwards or downwards would not be in the best interest of sound financial planning. She reminded the Member States that the provisions on voluntary modulation would be reviewed in the 2008 “Health Check” on CAP reform.
PURPOSE: allowing the Member States to voluntarily reduce the direct payments to farmers, by up to 20%, and to use those amounts to finance rural development programs.
PROPOSED ACT: Council Regulation.
CONTENT: the Commission has presented this draft Regulation in response to a European Council agreement on the financial framework for 2007-2013 whereby Member States are given the option to “modulate” or reduce market expenditure and direct payments by up to 20% on CAP expenditure. The amounts thus gathered may be channelled into rural development programmes rather than being spent on direct payments to farmers. In order to do so the Commission must amend two related Regulations:
- Regulation 1782/2003, establishing common rules for direct support schemes under the CAP . (For a summary of its provisions refer to CNS/2003/0006); and
- Regulation 1290/2005, on the financing of the common agricultural policy (For a summary of its provisions refer to CNS/2004/0164).
To recap, Regulation 1782/2003 introduces the partial decoupling of production-related aid by making payment of such aid conditional on compliance with rules on the environment, animal welfare, hygiene standards and the preservation of the countryside. The Regulation allows for a single farm payment, which (partially) de-couples payment from production. It also seeks to develop the “second pillar” of the CAP relating to rural development through increases in horizontal aid, separate from production activity (“first pillar”). Regulation 1290/2005, on the other hand, sets out the specific requirements and rules on the financing of expenditure falling under the CAP, including on rural development. To do so it sets up two funds: the European Agricultural Guarantee Fund (EAGF) and the European Agricultural Fund for Rural Development (EAFRD).
The present proposal lays down the rules for voluntary modulation of direct payments by setting out how the Member States can apply voluntary modulation and how the money can be used for rural development. A first important principle will be that the money will transit through the Community budget. Thus any decrease in commitment appropriations relating to direct payments or the “first pillar” will result in an equivalent increase in commitment appropriations for rural development or the “second pillar”. The proposal, therefore, has no direct impact on the Community’s budget since it is budgetary neutral.
Voluntary modulation will be aligned, as much as possible, to the provisions for compulsory modulation by applying the same base of direct payments. In other words, a franchise of the first EUR 5000 of direct payment would also apply to such additional reduction as in the case of compulsory modulation involving an additional amount of aid to be returned to the farmers, within ceilings per Member State applying voluntary modulation to be fixed by the Commission. The Member States would be required to communicate the rate of voluntary modulation they wish to apply to the Commission, covering the period 2007-2012 (calendar years for direct payments).
Member States applying for voluntary modulation would receive the corresponding amounts as a second source of Community funding for their rural development programmes, to which all rural development rules would apply. Released funds would be used within the mainstream rural development programmes to allow management programmes by the same management authorities and paying agencies. Lastly, the Commission would be empowered to adopt the implementing rules for integrating voluntary modulation and for its financial management.
For further information concerning the financial implications of this measure, please refer to the financial statement.
PURPOSE: allowing the Member States to voluntarily reduce the direct payments to farmers, by up to 20%, and to use those amounts to finance rural development programs.
PROPOSED ACT: Council Regulation.
CONTENT: the Commission has presented this draft Regulation in response to a European Council agreement on the financial framework for 2007-2013 whereby Member States are given the option to “modulate” or reduce market expenditure and direct payments by up to 20% on CAP expenditure. The amounts thus gathered may be channelled into rural development programmes rather than being spent on direct payments to farmers. In order to do so the Commission must amend two related Regulations:
- Regulation 1782/2003, establishing common rules for direct support schemes under the CAP . (For a summary of its provisions refer to CNS/2003/0006); and
- Regulation 1290/2005, on the financing of the common agricultural policy (For a summary of its provisions refer to CNS/2004/0164).
To recap, Regulation 1782/2003 introduces the partial decoupling of production-related aid by making payment of such aid conditional on compliance with rules on the environment, animal welfare, hygiene standards and the preservation of the countryside. The Regulation allows for a single farm payment, which (partially) de-couples payment from production. It also seeks to develop the “second pillar” of the CAP relating to rural development through increases in horizontal aid, separate from production activity (“first pillar”). Regulation 1290/2005, on the other hand, sets out the specific requirements and rules on the financing of expenditure falling under the CAP, including on rural development. To do so it sets up two funds: the European Agricultural Guarantee Fund (EAGF) and the European Agricultural Fund for Rural Development (EAFRD).
The present proposal lays down the rules for voluntary modulation of direct payments by setting out how the Member States can apply voluntary modulation and how the money can be used for rural development. A first important principle will be that the money will transit through the Community budget. Thus any decrease in commitment appropriations relating to direct payments or the “first pillar” will result in an equivalent increase in commitment appropriations for rural development or the “second pillar”. The proposal, therefore, has no direct impact on the Community’s budget since it is budgetary neutral.
Voluntary modulation will be aligned, as much as possible, to the provisions for compulsory modulation by applying the same base of direct payments. In other words, a franchise of the first EUR 5000 of direct payment would also apply to such additional reduction as in the case of compulsory modulation involving an additional amount of aid to be returned to the farmers, within ceilings per Member State applying voluntary modulation to be fixed by the Commission. The Member States would be required to communicate the rate of voluntary modulation they wish to apply to the Commission, covering the period 2007-2012 (calendar years for direct payments).
Member States applying for voluntary modulation would receive the corresponding amounts as a second source of Community funding for their rural development programmes, to which all rural development rules would apply. Released funds would be used within the mainstream rural development programmes to allow management programmes by the same management authorities and paying agencies. Lastly, the Commission would be empowered to adopt the implementing rules for integrating voluntary modulation and for its financial management.
For further information concerning the financial implications of this measure, please refer to the financial statement.
Documents
- Follow-up document: EUR-Lex
- Follow-up document: COM(2009)0407
- Final act published in Official Journal: Regulation 2007/378
- Final act published in Official Journal: OJ L 095 05.04.2007, p. 0001
- Results of vote in Parliament: Results of vote in Parliament
- Decision by Parliament: T6-0036/2007
- Debate in Parliament: Debate in Parliament
- Committee report tabled for plenary, 1st reading/single reading: A6-0009/2007
- Committee report tabled for plenary, 1st reading/single reading: A6-0009/2007
- Committee draft report: PE382.346
- Debate in Parliament: Debate in Parliament
- Debate in Parliament: Debate in Parliament
- Committee report tabled for plenary, 1st reading/single reading: A6-0315/2006
- Committee report tabled for plenary, 1st reading/single reading: A6-0315/2006
- Committee opinion: PE378.594
- Amendments tabled in committee: PE376.791
- Committee draft report: PE376.612
- Debate in Council: 2745
- Legislative proposal: COM(2006)0241
- Legislative proposal: EUR-Lex
- Legislative proposal published: COM(2006)0241
- Legislative proposal published: EUR-Lex
- Legislative proposal: COM(2006)0241 EUR-Lex
- Committee draft report: PE376.612
- Amendments tabled in committee: PE376.791
- Committee opinion: PE378.594
- Committee report tabled for plenary, 1st reading/single reading: A6-0315/2006
- Committee draft report: PE382.346
- Committee report tabled for plenary, 1st reading/single reading: A6-0009/2007
- Follow-up document: EUR-Lex COM(2009)0407
Activities
- David MARTIN
Plenary Speeches (7)
- 2016/11/22 Explanations of vote
- 2016/11/22 Explanations of vote
- 2016/11/22 Explanations of vote
- 2016/11/22 Explanations of vote
- 2016/11/22 Explanations of vote
- 2016/11/22 Explanations of vote
- 2016/11/22 Explanations of vote
- Catherine STIHLER
Plenary Speeches (6)
- 2016/11/22 Explanations of vote
- 2016/11/22 Explanations of vote
- 2016/11/22 Explanations of vote
- 2016/11/22 Explanations of vote
- 2016/11/22 Explanations of vote
- 2016/11/22 Explanations of vote
- Ilda FIGUEIREDO
Plenary Speeches (5)
- 2016/11/22 Explanations of vote
- 2016/11/22 Explanations of vote
- 2016/11/22 Explanations of vote
- 2016/11/22 Explanations of vote
- 2016/11/22 Support for rural development by the EAFRD – Voluntary modulation of direct payments under the CAP (debate)
- Neil PARISH
Plenary Speeches (5)
- 2016/11/22 Voluntary modulation of direct payments under the CAP (vote)
- 2016/11/22 Voluntary modulation of direct payments under the CAP (vote)
- 2016/11/22 Explanations of vote
- 2016/11/22 Voluntary modulation of direct payments under the CAP (debate)
- 2016/11/22 Support for rural development by the EAFRD – Voluntary modulation of direct payments under the CAP (debate)
- Lars WOHLIN
Plenary Speeches (4)
- 2016/11/22 Explanations of vote
- 2016/11/22 Explanations of vote
- 2016/11/22 Explanations of vote
- 2016/11/22 Explanations of vote
- Jim ALLISTER
Plenary Speeches (3)
- Pedro GUERREIRO
Plenary Speeches (3)
- 2016/11/22 Explanations of vote
- 2016/11/22 Explanations of vote
- 2016/11/22 Explanations of vote
- Mary Lou McDONALD
Plenary Speeches (3)
- 2016/11/22 Explanations of vote
- 2016/11/22 Explanations of vote
- 2016/11/22 Explanations of vote
- Czesław Adam SIEKIERSKI
Plenary Speeches (3)
- Friedrich-Wilhelm GRAEFE zu BARINGDORF
Plenary Speeches (2)
- Jan ANDERSSON
Plenary Speeches (2)
- 2016/11/22 Explanations of vote
- 2016/11/22 Explanations of vote
- Herbert BÖSCH
Plenary Speeches (2)
- Bernadette BOURZAI
Plenary Speeches (2)
- Luis Manuel CAPOULAS SANTOS
Plenary Speeches (2)
- Göran FÄRM
Plenary Speeches (2)
- 2016/11/22 Explanations of vote
- 2016/11/22 Explanations of vote
- Duarte FREITAS
Plenary Speeches (2)
- Lutz GOEPEL
Plenary Speeches (2)
- Hélène GOUDIN
Plenary Speeches (2)
- 2016/11/22 Explanations of vote
- 2016/11/22 Explanations of vote
- Gábor HARANGOZÓ
Plenary Speeches (2)
- Anna HEDH
Plenary Speeches (2)
- 2016/11/22 Explanations of vote
- 2016/11/22 Explanations of vote
- Nils LUNDGREN
Plenary Speeches (2)
- 2016/11/22 Explanations of vote
- 2016/11/22 Explanations of vote
- Jan Tadeusz MASIEL
Plenary Speeches (2)
- Luisa MORGANTINI
Plenary Speeches (2)
- Pierre MOSCOVICI
Plenary Speeches (2)
- Jan MULDER
Plenary Speeches (2)
- James NICHOLSON
Plenary Speeches (2)
- Athanasios PAFILIS
Plenary Speeches (2)
- 2016/11/22 Explanations of vote
- 2016/11/22 Explanations of vote
- Hubert PIRKER
Plenary Speeches (2)
- 2016/11/22 Explanations of vote
- 2016/11/22 Explanations of vote
- Zdzisław Zbigniew PODKAŃSKI
Plenary Speeches (2)
- Luís QUEIRÓ
Plenary Speeches (2)
- 2016/11/22 Explanations of vote
- 2016/11/22 Explanations of vote
- Tokia SAÏFI
Plenary Speeches (2)
- 2016/11/22 Explanations of vote
- 2016/11/22 Explanations of vote
- Manuel dos SANTOS
Plenary Speeches (2)
- 2016/11/22 Explanations of vote
- 2016/11/22 Explanations of vote
- Inger SEGELSTRÖM
Plenary Speeches (2)
- 2016/11/22 Explanations of vote
- 2016/11/22 Explanations of vote
- Kyösti VIRRANKOSKI
Plenary Speeches (2)
- Åsa WESTLUND
Plenary Speeches (2)
- 2016/11/22 Explanations of vote
- 2016/11/22 Explanations of vote
- Andrzej Tomasz ZAPAŁOWSKI
Plenary Speeches (2)
- Elspeth ATTWOOLL
Plenary Speeches (1)
- Katerina BATZELI
Plenary Speeches (1)
- Gerard BATTEN
Plenary Speeches (1)
- Thijs BERMAN
Plenary Speeches (1)
- Mario BORGHEZIO
Plenary Speeches (1)
- 2016/11/22 Explanations of vote
- Philip BRADBOURN
Plenary Speeches (1)
- 2016/11/22 Explanations of vote
- Charlotte CEDERSCHIÖLD
Plenary Speeches (1)
- 2016/11/22 Explanations of vote
- Simon COVENEY
Plenary Speeches (1)
- 2016/11/22 Explanations of vote
- Christofer FJELLNER
Plenary Speeches (1)
- 2016/11/22 Explanations of vote
- Glyn FORD
Plenary Speeches (1)
- 2016/11/22 Explanations of vote
- Bogdan GOLIK
Plenary Speeches (1)
- Bruno GOLLNISCH
Plenary Speeches (1)
- 2016/11/22 Explanations of vote
- Nathalie GRIESBECK
Plenary Speeches (1)
- Marian HARKIN
Plenary Speeches (1)
- Esther HERRANZ GARCÍA
Plenary Speeches (1)
- Gunnar HÖKMARK
Plenary Speeches (1)
- 2016/11/22 Explanations of vote
- Monica Maria IACOB-RIDZI
Plenary Speeches (1)
- Anna IBRISAGIC
Plenary Speeches (1)
- 2016/11/22 Explanations of vote
- Mieczysław Edmund JANOWSKI
Plenary Speeches (1)
- Timothy KIRKHOPE
Plenary Speeches (1)
- 2016/11/22 Explanations of vote
- Eija-Riitta KORHOLA
Plenary Speeches (1)
- 2016/11/22 Explanations of vote
- Wiesław Stefan KUC
Plenary Speeches (1)
- Jean LAMBERT
Plenary Speeches (1)
- 2016/11/22 Explanations of vote
- Kartika Tamara LIOTARD
Plenary Speeches (1)
- Diamanto MANOLAKOU
Plenary Speeches (1)
- 2016/11/22 Explanations of vote
- Jean-Claude MARTINEZ
Plenary Speeches (1)
- 2016/11/22 Explanations of vote
- Andreas MÖLZER
Plenary Speeches (1)
- 2016/11/22 Explanations of vote
- Gérard ONESTA
Plenary Speeches (1)
- Tobias PFLÜGER
Plenary Speeches (1)
- 2016/11/22 Explanations of vote
- Zita PLEŠTINSKÁ
Plenary Speeches (1)
- 2016/11/22 Explanations of vote
- Agnes SCHIERHUBER
Plenary Speeches (1)
- Richard SEEBER
Plenary Speeches (1)
- 2016/11/22 Explanations of vote
- Kathy SINNOTT
Plenary Speeches (1)
- Brian SIMPSON
Plenary Speeches (1)
- Marek SIWIEC
Plenary Speeches (1)
- 2016/11/22 Explanations of vote
- Alyn SMITH
Plenary Speeches (1)
- Struan STEVENSON
Plenary Speeches (1)
- Dimitar STOYANOV
Plenary Speeches (1)
- Timothy Charles Ayrton TANNOCK
Plenary Speeches (1)
- 2016/11/22 Explanations of vote
- Georgios TOUSSAS
Plenary Speeches (1)
- 2016/11/22 Explanations of vote
- Thomas ULMER
Plenary Speeches (1)
- 2016/11/22 Explanations of vote
- Janusz WOJCIECHOWSKI
Plenary Speeches (1)
Votes
Rapport Goepel A6-0315/2006 - proposition législative #
IND/DEM
NI
GUE/NGL
UEN
Verts/ALE
ALDE
PSE2ème Rapport Goepel A6-0009/2007 - proposition Commission #
ITSRapport Goepel A6-0009/2007 - résolution #
History
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