Fillip for subsidies
THE seventh green £ devaluation since the beginning of February has lifted farm support and subsidy payments by another 0.4% this week.
The latest change has been caused by the market rate of sterling falling below the artificial green rate (used to convert Brussels subsidies from ecus into national currencies) during the 10 day "reference period". Closing the gap means that 1ecu is now worth about 84p instead of 83p last week. (See page 23 for exact rate.)
The effect has been to raise the whole raft of support prices, area aid payments, import taxes and export subsidies in the UK, to the advantage of the whole industry. For example, the April grain intervention price now stands at £114.93, about 50p up on the week.
At the current rate, English cereal growers would receive £268/ha (£108/acre) in area aid for the 1995 harvest and £339/ha (£137/acre) in set-aside payments.
At the start of this season, ten devaluations ago, the projected area aid stood at just £246/ha (£99/acre) and set-aside at £311/ha (£126/acre). Then, the April intervention price was valued at less than £105/t.
Taking the analysis further back, had there been no green £ devaluations since "Golden Wednesday" in September 1992, cereal growers would be looking at area aid of £211/ha (£85/acre), set-aside of £267/ha (£108/acre) and an April intervention price of just over £90/t.