The Commission's proposals for a new European Agricultural Fund for Rural Development (EAFRD) will be discussed in the European Parliament over the coming months. Following the CAP reform last year this is now the major focus of policy reform. It will determine the European funding available for rural areas from 2007 onwards so the next year will be crucial for Wales as the decisions on the UK's share of the money and shape of the programme are made.

On the whole the Commission's proposals are to be welcomed if they fulfil the stated aim of simplifying the rules and reducing the bureaucracy. But we must look at the wider implications for Wales and the effect on important schemes such as Tir Gofal, Tir Cynnal and Tir Mynydd.

The allocation that the UK receives has historically been low. Within the current programme for the old 15 EU member states it receives just 3.5% of the budget although it has 12% of the agriculture land. Although it's too simplistic to allocate money on this basis it does seem to be inconsistent and there are calls for the UK's share to be increased to 10%. It's then a question of the bargaining skills of the Welsh Assembly Government to get the best deal for Wales.

The money Wales could get has also been cut by the 'UK rebate' negotiated by Thatcher and kept in place by Blair which New Labour First Minister Rhodri Morgan supported only last week in a reply to a question by Plaid Cymru Assembly Member Alun Ffred Jones.

In addition to the UK's percentage of allocation the amount that Wales could receive is threatened by current attempts to cut the EU's budget. As it stands in the Commission's proposals €13 billion per year will be available for the EAFRD. This is based on an EU budget of 1.24% of the EU's Gross National Income (GNI) but the UK Government is leading a campaign to reduce the budget to 1% EU GNI. This would mean a severe cut in all policy areas, with two that effect Wales - regional funds and the EAFRD - expected to suffer heavily. I would call on the farming unions and everyone involved in rural Wales to oppose this threat of a cut.

And what about the regulation itself?

There certainly needs to be the right balance of support for environmental, social and economic objectives. Issues ranging from the ageing of the population, employment opportunities and adequate childcare all affect rural areas as well as the direct concerns of agriculture.

Although the EU funding must reflect the EU's priorities and objectives these must not be too prescriptive. I think everyone in Wales would agree with the importance of improving the quality of life in rural areas, protecting the environment and ensuring that farming is a sustainable livelihood but we must let the National Assembly and local communities decide how to achieve these aims. There has to be enough flexibility to make sure this happens.

Less favoured area status is also very important for us in Wales, effecting nearly 80% of our land, and we must make sure that any changes to the way this is defined still takes account of the socio-economic factors and geographical factors such as upland farms.

I'm following this issue in the Regional Development Committee and I'm aware of how important this funding is for the future of Welsh agriculture and rural areas. I would like to hear from Western Mail readers involved in all aspects of rural life in Wales today. What do you think of how the current structure of funds is working and what should be done to change it? jievans@europarl.eu.int.

Jill Evans ASE/MEP