By FW Staff

FARMERS in the UK are more likely to be able to receive subsidies in Euros next year following changes to EU proposals for a new agrimoney regime in 1999.

Until now, Brussels has said farmers in non-Euro countries may only receive aid in Euros if they can prove they will be no better off than those paid in the national currency. But this would have been impossible to implement, because exchange rates fluctuate daily.

The commission now says Euros can be paid, provided there is no “systematic advantage compared with the use of national currency”. Farmers will probably have to choose which currency they prefer well before annual rates are set, said one UK Government source.

The news will be welcomed by farmer groups who see Euro payments as the key to getting access to cheap inputs and lower-interest rate loans from abroad.

A final decision on whether to allow Euro payments has to be taken by MAFF. But UK farm minister Nick Brown, talking in Luxembourg this week, said that, in principle, it is something he would like to see: “But there is a technical difficulty, namely that we would have to run two computer systems (for IACS payments). Initially this may be more costly than the demand from farmers actually justifies.”

Generally, there was broad political agreement at this weeks farm council on the new agrimoney system for 1999. Support prices and subsidies will be converted into sterling using the daily rate of exchange against the Euro, with compensation paid for any significant revaluations that would reduce farmer returns.

However, problems remain on some details of the “transitional” arrangements for dismantling the so-called “frozen” green rates (for direct income payments) on 1 January, 1999. Some member states want better compensation.

In view of recent currency volatility, most ministers also called for decisions on the final package to be left until as late as possible – the last council of the year on 14-15 December.