UNCERTAINTY PREVAILS over what exchange rate will be used to convert this year‘s single farm payment from euros into sterling.
The issue is vital, because if the pound strengthens against the euro by just one penny, farmers would receive £3/ha less in subsidy.
It had been expected that the average rate for December 2004 would be used, which would have given UK farmers about 70p for every euro‘s-worth of SFP.
But it is unlikely that the EU will base the calculation on a past month.
According to NFU economist Carmen Suarez, the most likely option for this year is to use the June average exchange rate.
“The commission could then use the June rate every year thereafter, or revert to the December rate for future years.”
The NFU is pressing for a speedy decision to help farmers with their budgeting.