20 March 1998

Getting ready for EMU

EUROPEAN Monetary Union still appears to be an abstract concept to many farmers, even though it will become a reality in less than 10 months.

Although the UK will remain outside EMU for now, the banks agricultural chief, John Page, reminded farmers a recent Barclays Bank briefing in Berks that changes would begin in little more than two months from now.

If predictions that the euro would be managed as a strong currency were fulfilled, he said, the industry would discover that 1998 was the bottom of a disastrous economic cycle.

But the euro would soon be used for trade and agricultural payments between the UK and Europe, even before next January.

That would shield payments from currency fluctuations and avoid exchange charges.

Many in the audience remained sceptical about monetary union.

"Will it work?" asked Graham Carr, who farms 324ha (800 acres) in Oxon and Hants. "I dont think people realise how risky it is."

He was unconvinced by Mr Pages suggestion that one of the potential advantages of union would be much reduced financial volatility, now caused by political manipulation of interest rates and speculative runs on currencies.

He was particularly concerned about the undemocratic selection of the six-man committee that would manage the EU Central Bank – effectively the unions Chancellor of the Exchequer. The committees decisions would have a critical effect on UK agriculture.

Others like Robert Holmes, with 260ha (650 acres) of arable and beef at Stokenchurch, were more positive.

"I believe a single currency would provide stability and cut out the trading differentials that cause so many problems." &#42