I propose to take Questions Nos. 143 and 428 together.
The proposal for the introduction of further modulation of direct payments is one of a series of proposals which was put forward by the Commission with a view to facilitating agreement on the next financial perspective for the period 2007- 2013. The negotiations broke down at the European Council in June and the UK Presidency is aiming to conclude an agreement next month. The effect of the Commission's proposal, if agreed, would be to reduce direct payments to farmers by 1% per annum, beginning in 2009, to provide additional funding for rural development. The Irish position in the negotiations, as decided by the Government, is that the decision of the European Council in October 2002 on the budgetary allocations to the Common Agricultural Policy in respect of direct payments and market supports should be fully respected and that adequate funding for rural development should be provided separately.