Scotland Rural Development Programme 2014-2020 - Consultation on Stage 1 Proposals : An Analysis of Responses

12 Modulation (Q28)

12.1 This chapter provides an analysis of responses regarding Section 13 of the consultation document. Current EU arrangements allow for transferring money, up to a maximum of 15%, from the Direct Payments scheme to the SRDP. Scotland currently transfers 14% of its Direct Payments budget in this way. While it was noted that no decision could be made until the budget was known, views were sought on whether the current level of transfer (or modulation) should be maintained:

Question 28: Do you agree or disagree with the proposal to maintain the current level of transfer from Direct Payments to SRDP in the new programme period? Please explain your views.

12.2 Altogether, 98 respondents answered this question (27 individuals and 71 organisations). Of these, 53% indicated agreement, and 39% indicated disagreement. See Table 12.1.

Table 12.1: Summary of responses by respondent type (Q28)

12.3 Respondents answered the question in a number of different ways. A significant minority of those indicating agreement (13 of the 52 respondents) called for the level of modulation to be at least maintained if not increased. Further, with just two exceptions, those disagreeing that the level should be maintained could be categorised into two groups: those calling for modulation to be reduced (4 respondents) and those, similar to many in the 'agree' category, calling for it to be increased (32 respondents). Thus, half of those indicating agreement or disagreement (45 out of 90; 50%) stated a clear preference for modulation to be increased, and a majority (84 out of 90; 93%) supported maintenance or an increase. Private individuals (i.e. those without a declared professional interest in the rural sector) were particularly likely to have responded to this question, indicating support for increased modulation.

Views in support of maintaining or increasing modulation

12.4 Those supporting maintenance or an increase offered very similar reasons and generally argued strongly that this mechanism:

• Was crucial in maximising the funds available for a wide range of rural projects, particularly environmental, biodiversity and social projects
• Had a significant impact on rural communities and the rural economy
• Delivered public benefit as well as value for money for the public purse
• Would be even more important given the likely reduction in overall budget.

Caveats and disagreement with maintaining the current level of modulation

12.5 The following caveats and points of disagreement were noted:

• The importance of recognising the interests of the farming community: It was seen as important that SRDP funds were accessible and fairly distributed in order to gain support from the farming sector for modulation, with ring-fencing for farming projects one option. It was also suggested that those in receipt of Direct Payments may be more reluctant to accept the current level of modulation if LMOs were removed from the next SRDP.
• The impact of modulation on the farming community: It was argued that Direct Payments were an important source of income for farmers and that any increase in modulation would impact negatively on farmers, food production and the associated rural economy. It was also suggested that farmers were best placed to deliver environmental benefits in rural areas.

Other points

12.6 A number of general points were raised by respondents:

• There were calls for the government to seek an increase in EU Pillar 2 funding in order to maximise the funds available for a wide range of rural projects, particularly environmental, biodiversity and social projects.
• Drawing on other EU funds (ERDF^[12] and ESF^[13]) and other tax revenues to contribute to SRDP funds was suggested.
• A small number of respondents specifically stated their opposition to modulation from Pillar 2 to Pillar 1.
• There were a number of comments critical of the current tiered percentage arrangements for modulation which were seen to impact unfairly on small-scale Direct Payment recipients. It was also suggested that the arrangement should take account of disadvantaged areas.
• The figures presented in the consultation paper on amounts modulated under the current scheme were queried by some respondents.