16 October 1998

Green £ move is welcomed

FURTHER devaluation of the green £ was seen this week, boosting support prices and bringing some much-needed optimism to farmers.

"Another tentative step in the right direction," says the NFU of the Oct 11 change which, by altering the rate at which Brussels payments are converted in to sterling, boosted a range of support prices by 1.3%. It follows last weeks change – the first in nearly three years – which gave a 1.75% fillip to payments.

"This will go some way to alleviating the economic pressure on our farmers," said NFU president Ben Gill. "But our real need is for a further cut in interest rates and a corresponding drop in the strength of sterling."

Grain traders have welcomed the changes, with intervention barley now at £83.91/t delivered to store for November.

Devaluation news also raisesthe likelihood of safety-net intervention beef buying, with sterling prices now effectively lower when converted to ecus.