MEPs set to release €2bn of rural funding

MEPs are set to agree to release nearly €2 billion in funds to help rural areas after winning a battle with the Council of Ministers over the financing of farm support.

Deputies were keeping back 20% of the nearly €10bn earmarked for rural development projects in 2007 in protest at measures agreed by the Council which, MEPs said, would undermine the single market and the Common Agricultural Policy (CAP).

The dispute goes back to the deal struck by EU leaders in December 2005 on an EU budget for 2007-13. The UK, which then held the presidency of the EU, wanted to shift a bigger share of spending away from traditional direct support to farmers and into rural development, which benefits a wider cross-section of the population in the countryside. Britain won support for governments to have the option to transfer 20% of funding for direct support and market-related measures into rural development programmes, so-calledvoluntary modulation.

But MEPs said that this could mean that some countries would refuse fully to fund the payments, going back on promises made during reforms of the Union’s farm support policy.

Dutch Liberal MEP Jan Mulder, a member of the Parliament’s budget committee, said: "We must have a common market with common policies," adding that this would be undermined if different member states were able to set different levels of support. He said that EU governments and the European Commission had to be "reliable". Mulder explained that a 2003 reform of the CAP had shifted from price support to income support. But farmers were already facing an 8% cut in the level of support. "We did not think [a possible further cut of 20%] was acceptable," he said.

Voluntary modulation was fiercely opposed by MEPs, led by members of the agriculture committee. The entire Parliament has twice rejected voluntary modulation by voting by a very large majority for a report by German centre-right MEP Lutz Goepel condemning the move. But as the Parliament is only consulted on farm policy issues, it had to use its budget-setting powers to block the rural development funds and force the Council to change its stance.

Under a revised proposal prepared by the Commission, only the UK and Portugal will be able to use voluntary modulation. The changes are expected to be approved by Council and the Parliament’s budgets committee next week.

MEPs are set to agree to release nearly €2 billion in funds to help rural areas after winning a battle with the Council of Ministers over the financing of farm support.