Using modulation to green the cap: the UK case

The Agenda 2000 reforms to the Common Agricultural Policy (CAP), agreed in 1999, give significant new discretion to Member States, including the scope for them to apply modulation to direct payments to farmers. Modulation means that up to 20% of payments can be redirected into the CAPʹs accompanying measures, including agri-environment schemes. This paper examines the rationales for applying modulation, and the potential benefits and problems associated with the measure. It examines the case of the UK in particular, and concludes that modulation currently provides a useful means of re-orienting and greening the CAP.