Despite the increase in modulation rates, NFU Scotland has broadly
welcomed the main thrust of today’s announcement by Cabinet
Secretary, Richard Lochhead on rural development spending for the
period up until 2013.
The Scottish Rural Development Programme includes a wide
range of measures that will benefit farm businesses and the wider
rural economy - in particular a commitment to support for hill
and upland farms in Scotland's Less Favoured Areas, increased funding
for environmental schemes and measures to improve the competitiveness
and profitability of farm businesses.
The voluntary modulation rate of 5% in 2007 rising to 9% in 2012 is considerably
lower than the rates previously trailed by Scottish Executive officials
and the equivalent rates already announced in England and Northern Ireland.
NFU Scotland has argued for as low a rate as possible that will provide
sufficient funding for a meaningful rural development programme without,
at the same time, putting farm incomes at risk. A £1,598m programme
is almost double the £811m spent over the previous 7 years and contains
measures that will help farm businesses, the environment and rural communities.
Reacting to the announcement, NFU Scotland President Jim McLaren said:
“We have made it very clear to the new Scottish Executive that we
expected a rural development programme that will meet the needs of Scotland's
farming businesses and rural communities. Our calculations showed that this
could be achieved without swingeing increases in the rate of voluntary modulation,
which would have undermined the viability of individual businesses. While
the eventual rates of voluntary modulation will be higher than the current
5%, which we believe could still have delivered a meaningful programme,
they average out at 8% over the period up until 2013 and are boosted by
a significant increase in Scottish Executive funding to £1,113m, compared
to £552m in the previous programme.
“At this time the thing that farmers need most of all is stability.
That is why we have been impressing on the Scottish Executive the need to
keep modulation rates to the absolute minimum required. While an average
modulation rate of 8% will put pressure on farm incomes, the programme includes
a number of measures, such as farm restructuring, co-operation and animal
health and welfare, that will help businesses adapt to the last CAP reform
by cutting costs and adding value to what they produce. We also welcome
the inclusion of a young farmers scheme, which will help bring new blood
into the industry. Additional funding will allow more farmers and crofters
into agri-environmnent schemes and the continuing commitment to supporting
the Less Favoured Areas has addressed our top priority.”
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