In July 1997, the European Commission first proposed a reform of the Common Agricultural Policy (CAP) relating primarily to the arable, beef and dairy sectors. In March 1999, European Heads of Government agreed a substantial reform package based on, though less radical than, these proposals. In broad terms, these changes will reduce the economic distortion of the CAP by reducing price support and increasing direct payments in compensation. The reforms also introduce discretionary options of cross compliance and modulation. The UK, along with France, has chosen to take up the latter, which involves redirection of a proportion of the direct payments towards Rural Development measures.
This will be an interim evaluation designed to provide an early assessment of the impact in the UK of changes to commodity support prices and direct payments, and of modulation, particularly in relation to the competitiveness of UK agriculture compared with elsewhere in the EU. Its primary focus will be at farm level.