A European Commission proposal that would have allowed Member States to divert some Common Agricultural Policy (CAP) direct farm payments to rural development spending was almost unanimously rejected by the European Parliament with 89 votes in favour, 584 votes against and 19 abstentions. The Commission must now decide if it will withdrawal the proposal.
The Commission proposal for a voluntary modulation scheme would allow 20% of direct payments to be diverted to rural development projects, at the discretion of each Member State. The report, authored by Lutz Goeppel (EPP-ED, DE), warned that such a transfer could create distortions in competition between farmers from various Member States, and could also lead to a "re-nationalisation" of the CAP. Agriculture Commissioner, Mariann Fischer Boel said in the debate on 13 February: "It is no big surprise that you have reconfirmed the views that were expressed last autumn and once again called on the Commission to withdraw its proposal. I know and I understand Parliament's concerns about voluntary modulation. My position is no secret to you, and a repetition of your arguments and of my arguments is not necessary, but we have to face reality". Turning to solutions other than voluntary modulation, "I would have preferred to ensure sufficient funding in our rural development policy, but the European Summit decided otherwise. One thing is very clear to me: the European Parliament's concerns do not fall on deaf ears. Although the Council has reaffirmed its wish to maintain its proposal, efforts are currently being made to accommodate your concerns. There have been concerns that voluntary modulation would unravel the common agricultural policy, but, as it stands now, all of the indicators are that voluntary modulation will only be used in a very limited number of Member States to boost their own rural development programmes". New chairman of the Agriculture Committee Neil Parish (EPP-ED, UK) said that Parliament "dislikes the voluntary modulation intensely, so we are waiting for a new proposal to come forward. I think the best way we can deal with this is to get on with it, to reject it again and for you to come forward with a proposal very quickly, because we are all interested in rural development but we are also interested in a level playing field". Parish added that "this is not voluntary modulation to all those farmers that lose their payments. Perhaps we should actually offer it to them and say 'will you voluntarily lose 20 % of your payment?' I suspect not many of them would come forward and say 'yes'. So, this is very much compulsory modulation, but probably only done to two Member States, the United Kingdom and Portugal".