The NFU has welcomed a decision by the Government to modulate CAP at 12 per cent for the next four years calling it a "sensible and pragmatic decision which will help England’s farmers and growers to remain competitive, produce more food and maintain the environment".
NFU Deputy President Meurig Raymond said: "I am delighted that Owen Paterson has decided to keep the rate of modulation below the maximum for the next four years along with a Government review to be launched in 2016 to consider the transfer rate from payments in 2018.
"I appreciate this was not any easy decision for the Secretary of State to make but we are pleased that he has listened to our arguments.
"I would like to thank the EFRA Select Committee and many rural MPs who have supported us in recent days.
The reduced rate of transfer to the Rural Development budget will mean that £224million will be retained in the farming sector over the next four years.
Added Raymond: "This issue has falsely been presented as a fight between farming and the environment. It is not. Even at nine per cent transfer the NFU has demonstrated that we could continue to meet all our on-going commitments to agri-environment programmes and have a surplus to spend on other measures. At 12 per cent there will be additional funds available and we will play our full part in determining how these might best be spent."
The new rate is more than the current rate which is nine per cent but the NFU said that once the decision had been taken at EU level to reduce the UK’s Rural Development budget allocation and once the UK Government's Treasury decided to reduce its contribution, it was difficult to avoid some increase in the rate.
Raymond expressed "deep disappointment" at the decision by the Welsh Assembly Government to introduce a 15 per cent rate.