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THE PARLIAMENTARY REVIEW Highlighting best practice 8 | REVIEW OF THE YEAR from arbitrary food production. One of the most controversial measures was the change in the amount that national governments were able to move from Pillar 1 funds (direct payments to farmers) into Pillar 2 funds (rural development schemes), a process known as 'modulation'. At the start of the parliamentary session, Environment Secretary Owen Patterson was reported as favouring imposing a 15% transfer from England's Pillar 1 to Pillar 2 funds – the maximum permitted under the reforms. This angered many farmers, who said it would place them at a disadvantage compared with foreign competitors, and leave them struggling to make ends meet. But Mr Paterson surprised farmers just before Christmas 2013 by announcing that the amount transferred from farmers' direct payments would be 12%. However, this would be reviewed in 2016, and was likely to increase to 15% from 2018. The National Farmers Union (NFU) welcomed the decision, calling it 'sensible and pragmatic'. NFU deputy president (now president) Meurig Raymond said: '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. The reduced rate of transfer to the Rural Development budget will mean that £224 million will be retained in the farming sector over the next four years.' Shortly before Mr Paterson made his announcement, the Environment, Food and Rural Affairs (Efra) Select Committee published its report on the CAP reforms. MPs on the committee said that there was 'much to like in the government's proposals'. However, they cautioned: 'English farmers lag behind their main European competitors in levels of direct payment, leaving them less able to invest and innovate. We therefore recommend that the government maintains the current 9% rate of transfer from the Pillar 1 budget to Pillar 2 and only move to 15% in 2017 if it can demonstrate that additional funds are required and there is a clear benefit from the projects proposed.' In written evidence to the Efra Select Committee's enquiry, the Soil Association, which oversees the UK organic certification scheme, said UK organic farmers were at a 'serious disadvantage' to their counterparts in other EU states because they received the lowest organic support payments. 'The now growing organic market means that more organic produce is likely to have to be imported in the near future,' the association wrote. 'We are urging the UK Government to ensure that English farmers receive payments for the multiple environmental and social benefits delivered by organic farming systems which at least match the average of those paid to organic farmers in all other member states.' Other environmental groups voiced concern about the reformed CAP, saying that many of the environmental dimensions in the original proposals outlined by the European Commission in October 2011 had been diluted. In mid-June 2014, Mr Paterson unveiled more key details about what the new The Soil Association said UK organic farmers are at a disadvantage compared with their counterparts in other EU states because they receive the lowest organic support payments