Exchange rate dip a boost for support payments

The exchange rate used to calculate farm support payments, announced yesterday, has shown a slight fall of less than a quarter of 1 per cent on last year’s rate.

Set by the European Commission, and based on the average of the European Central Bank rates set over the month of September, the 2018 exchange rate will be €1 = £0.89281, back 0.21 per cent on the year.

The decision affects around 16,400 farmers who have chosen to receive their 2018 basic payment scheme support in sterling.

Speaking yesterday, rural economy secretary Fergus Ewing said that the confirmation of the rate would allow his department to start processing the loan payments which will see producers receive up to 90 per cent of their CAP entitlement under the national BPS loan scheme next month. “When taken with the confirmation of the exchange rate, I hope it will provide farmers and crofters with some degree of certainty that will enable them to plan ahead for the year to come,” said Ewing.

NFU Scotland director of policy, jon ni eh all, said the rate reflected the weakness of sterling which had started after the vote to leave Europe.

“The decrease of 0.21 per cent follows a 5 per cent increase in 2017 which came on top of the 17 per cent increase in the value of the euro seen in 2016,” he said.

Hall said that although a weak sterling was good news for support payments and strengthened the competitiveness of UK exports, the downside was higher priced imported inputs such as fertiliser, animal feed and machinery.

“As recent lending figures showed, farmers and crofters continue to need every pound and euro in what has been an extremely challenging year for all sectors,” said Hall.