The leaders of the UK's farming unions have issued a joint statement condemning UK Government negotiators in Brussels for trying to give member states the power to cut CAP direct payments by up to 20% through a system that would replace voluntary modulation.

As reported in yesterday's Herald, these cuts would be on top of the European Commission's proposal for 30% to be ring-fenced for "greening" and on top of the 10% "compulsory modulation" which the Commission proposes should permanently shift into Pillar 2 envelope.

Modulation is a tax on the subsidy that farmers receive called the Single Farm Payment, and is used to fund environmental and rural development projects.

There are two types of modulations – compulsory EU modulation and voluntary (national) modulation. Voluntary modulation goes towards funds received by Scotland's Pillar 2 Rural Development Programme.

The UK receives the lowest allocation of Pillar 2 funds per hectare of all EU member states due to the reluctance of successive governments to draw down discretionary European funds – in light of the impact this would have on the size of the UK rebate. This is compounded by the on-going use of a historical distribution key by the EC to allocate Pillar 2 funds to member states.

The statement from the four UK farming union presidents said: "UK farmers will be very concerned to hear that UK ministers are seeking to engineer ways to cut direct payments while other governments are looking for ways to increase them to their farmers through reverse modulation.

"We know money is going to be tight in this next CAP and we recognise it is inappropriate to argue for more money to be spent on direct payments at this time. However, the fundamental problem to be addressed here is not the level of support payments to farmers, but the inadequate Pillar 2 allocation the UK receives.

"Government ministers in Westminster have repeatedly said they want 'fairness' in the next CAP; fairness for taxpayers, fairness for the environment and fairness for farmers. The average payment in the UK is already below 90% of the EU average payment and efforts to further reduce payments will only serve to compound the disadvantage."

Wallets Marts sold 337 prime hoggs in Castle Douglas on Tuesday to a top of £92 per head and 219.4p per kg to average 187.2p.

There were also 287 cast sheep forward with ewes selling to £140 for Suffolks and £76.50 for Blackfaces to average £74.02 overall.

Craig Wilson sold 17 prime heifers at Ayr on Tuesday to a top of 218p per kg and an average of 201.5p, while 10 prime beef-bred bullocks peaked at 214p and levelled at 196.8p. Three prime B&W bullocks averaged 162p, while 8 young bulls peaked at 200p (x3) and levelled at 189.5p.

In the rough ring, 55 beef cows averaged 150.3p, while 117 dairy cows levelled at 119.6p.

A small show of 11 dairy cattle maintained recent rates and sold to £1800 (x2) for Holstein Friesian heifers.

The firm went on to sell 477 prime hoggs in Newton Stewart yesterday to a top of £87 per head and 211.7p per kg to average 181.5p, while a prime lamb fetched £100.

The 77 cast sheep forward saw ewes sell to £100 for Suffolks and £73 for Blackfaces.