Euro rate gives windfall for farmers
FARMERS will reap a “bonus harvest” of payments from Europe as a result of sterling's dramatic collapse in value, it was confirmed last night.Single farm payments will be worth about 15pc more than last year and will boost the industry's income in England and Wales by an estimated �350m, said leading Norfolk consultant David Bolton.
FARMERS will reap a “bonus harvest” of payments from Europe as a result of sterling's dramatic collapse in value, it was confirmed last night.
Single farm payments will be worth about 15pc more than last year and will boost the industry's income in England and Wales by an estimated �350m, said leading Norfolk consultant David Bolton.
The euro's value was fixed yesterday by the European Commission at 90.93p. This is used by the Rural Payments Agency to calculate the precise amount owed to farmers from December 1.
Mr Bolton said: “It is a very welcome and unexpected fillip at an otherwise tense time. The tensions are because of drought in the east, low potato values and grain prices and further concern about how much damage is going to be done to the sugar beet crop trying to get it out.”
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“It has been a gamble but in the event everybody has done well,” he added. It was just five weeks ago that the euro was worth 87p, so it has moved significantly to farmers' advantage over a very short timescale.
Mr Bolton, who is based at Bridgham, near Thetford, said that a year ago the euro rate for single farm payments was 79p. “As a result there has been a significant increase in the value of single farm payments since last year.” And two years ago, the rate was 69.6p while it was 67.7p in 2006, he said.
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Under the single farm payment scheme in England and Wales, all claims are subject to “modulation” or deductions at the rate of 19pc for the forthcoming year.
The Treasury also benefits because it retains this 19pc - up from 18pc last year - of the value of payments, said Mr Bolton.
But if sterling started to appreciate against the euro, then farmers could be hurt as the value of payments would be cut, he warned.
“We have got the prospect of rampant inflation to come and horrible demands on our cash. I don't see the pound stiffening materially for quite a while,” warned Mr Bolton.