BY TOMMY NETHERY

t.nethery@ulsterherald.com

FARMERS are going to be hit with a bill for a staggering £55 million after an announcement by Agriculture Minister David Cairns that the rate of modulation will be increased to 15% by the year 2012.

Modulation is the process by which a percentage of a farmer's Single Farm Payment is siphoned off and re-directed to Northern Ireland's Rural Development Programme. It currently runs at 5%.

The Ulster Farmers' Union claims that the decision to introduce significantly higher rates will infuriate farmers and will affect their ability to compete in the market place.

UFU President Kenneth Sharkey said that the minister had effectively handed farmers a bill for an additional £55 million.

"At a time when so many farm businesses are going through prolonged financial difficulties, it is hard to believe that the minister and his department's solution is to take even more of their income from them," said Mr Sharkey.

"Modulation significantly reduces producers Single Farm Payment, which is such a vital part of their incomes. In effect every pound which is taken from the Single Farm Payment immediately reduces the farmer's profitability by the same amount.

"This decision will compound the financial problems which many farm businesses are facing."

HASTY DECISION

The UFU president added, "This is a very hasty decision, taken without consulting the industry and I believe the minister and his department have rushed through this announcement before a local government is restored.

"They have blatantly ignored the fact that farmers are completely opposed to modulation. Northern Ireland has the regional discretion in the UK to set it's own modulation rates so we could have avoided this scenario.

"We will continue to lobby to protect the Single Farm Payment which plays a vital role in maintaining our farming structure."