Modulation (European Union)


As part of its Agenda 2000 reforms, and effective 1 January 2000, EU member-countries may reduce direct aid to producers in cases where:
  • the labour employed in a farm falls below a threshold set by national authorities;
  • the overall prosperity of the holding is above a certain limit;
  • and, the total payments granted under support programs exceed a limit set by national authorities.
The savings that result and those from cross-compliance or econ-conditionality may be used by the member countries to supplement EU funding for early retirement measures, payments for less favoured areas and areas subject to environmental restrictions, agri-environmental provisions, afforestation and rural development.
Modulation is an essential element of the EU Commission's Mid-term Review proposals. Funds acquired from the reduction of payments to farms will be allocated to rural development under the MTR.