Details of the Commission's draft proposal on the CAP health check were leaked in Brussels recently. While most of the key details are generally in line with the proposal that was published in November, proposed changes to modulation and SFP payments differ slightly from those in November.
The draft proposal has now entered the Internal Commission review process and is due for formal publication on May 20.
Single Farm Payment (SFP) and Modulation
Modulation and SFP payment reductions - The draft proposes that the rate of compulsory modulation should be increased from the current 5% four times by 2% between 2009 and 2012, reaching 13% in 2012. In addition, the draft suggests a further reduction of 11% for individual SFP payments over €100,000, 14% over €200,000 and 17% over €300,000 by 2012.
Those additional funds will be transferred to Pillar II (rural development) and will be used to focus on the following four new challenges: climate change mitigation, renewable energies, water management and biodiversity (see below).
Decoupling - The draft suggests immediate removal of the coupled payments for durum wheat, hops, seeds, hemp, dried fodder, protein crop, olive oil and nuts. The €45/ha premium for energy crops should also be abolished. The current rate for rice, potato starch and long life fibre will be halved within 2 years. Furthermore, the Commission foresees a transition period for certain livestock products.
SFP model - The draft proposal suggests Member States to adjust their SFP from historic models towards regional models.
Rural Development
National envelope - A greater flexibility should be given to Member States in the use of their national envelope. Member States should be able to cut up to 10% of their 'pot of money' for the SFP and use those funds to support a number of purposes aiming at targeting specific types of farming with extra environmental benefits, improving quality and marketing, avoiding land abandonment and providing risk management.
Market Instrument
Set-aside - The draft suggests that the current rate of 10% compulsory set-aside for all arable producers should be abolished.
Intervention - The draft proposes to end the public intervention for durum wheat and rice, and set it at zero for feed grains (maize, barley and sorghum). Only common wheat would still be subject to intervention.
Milk quotas - To phase out milk quotas, the draft proposes a 2% increase from April 2008 followed by a 1% increase for four years starting in 2010. | 
