The setting of the exchange rate on 30 September at 0.9093p/euro has been a welcome leg up for the arable sector.
It represents an increase of 15% on the rate set in September 2008 and a increase of 34% since September 2006. We might gripe about wheat prices sub £100 but if sterling hadn’t weakened we could have been looking at prices down in the low 70s.
Several of us who bought euros earlier in the year to protect against a strengthening pound have been comparing notes as contracts ended last week. It has been a worthwhile insurance/risk management exercise as the increased SFP payment due will cover any loss made on currency. Bankers are reporting farmers are already interested in trying to take some cover for their 2010 SFP as the pound keeps hitting new lows.
One common thread has come through the political party conference season: We are going to see severe cuts in public expenditure to pay for the spiralling debt mountain and to cover lower tax revenues. Agriculture will be no exception and will have to take its share along with everybody else.
There still seems plenty of modulated money around with the various Development Agencies, Natural England and the Forestry Commission having budgets to spend before the end of the financial year. One Natural England “insider” even told me that unless there is a dramatic increase in HLS applications before next March they will be “handing budget back in” and it might not be available another year.
We have certainly taken advantage of this window by amending our Countryside Stewardship Scheme agreements, and realising a long-held ambition to convert a barn to a education/meeting room to provide farm visits for school groups, extended bridleway access around the farm and putting 6ha of marginal arable land into a pilot Woodland Birds Project.