By Paul Spackman
It's official! The 2009 single farm payment is going to be worth 15% more than last year, at least for those who opted to receive it in sterling.
As Mr Clarke explained in his blog posting last week, the EU Commission fixes the rate at which the SFP is converted from euros into national currencies using the European Central Bank's closing rate on 30 September.
Today that rate finished the day at €1 = £0.90930. Compare that with the rate of €1 = 79p last year and around 68-69p in the years before that, there's a clear bonus for farmers this autumn.
But while some in the national media have quickly jumped on headlines such as "windfall for farmers", others closer to the industry have been understandably more reserved...
Grain values have fallen, milk prices continue to hover perilously close to breakeven for many producers (despite all the talk of long-term optimism) and countless farmers face big investment decisions to comply with new NVZ rules.
It may be a welcome bonus, but it's one that's much needed - especially after the turmoil of recent years.
One interesting angle to the exchange rate debate that's also been brought to my attention is what happens to the money siphoned off by the government through modulation - effectively a fifth of each SFP total this year. This pot of money will have been boosted by the exchange rate changes, yet many of the schemes it is used to fund are fixed payment rates - such as the ELS at £30/ha.
Now, I'm not suggesting any conspiracy theories here, but if more money's going into the pot, and payment rates are fixed every year, it would be interesting to see how the balance is changing!
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At www.smartfarmer.co.uk where watching the exchange rate is an obsession I would highlight the need for farmers to consider fixing their 2010 and perhaps even 2011 single payments.
A recently published currency forecast by Barclays Capital suggested a euro would be buying around 80 pence in 12 months time.
I would agree that over the coming months the pound might face futher pressure and would urge farmers to keep one eye on the exchange rate. Very few farmers fixed last Christmas at parity but plenty fixed at 92 and 93 pence and spent the summer sleeping well in the knowledge their single payment was secure whilst the euro fell to 85 pence in July.
If you want to predict exchange rates you might aswell flip a coin but there is some merit in a business protecting itself from adverse currency movements and farmers are no exception.