Green £ rejig on the cards
UK FARMERS could soon be hit by another green £ revaluation, following Chancellor Gordon Browns consumer-friendly budget, leading to lower support payments.
Sterling slipped into revaluation territory (at over 3 marks to the £) towards the end of last week. By Wednesday, the green £ gap had widened to 6.363% – well over the 5% allowed before revaluations are triggered. If this is maintained for about two months, then a revaluation to halve the gap would be triggered – leading to cuts in intervention prices and area aid.
The Home-Grown Cereals Authority estimates a minimum revaluation, equivalent to a 5% gap, would wipe £2.25 off grain support (to £85.54t for May delivery) and £6.36 off area aid for 1998/99 to (£248.28/ha). Milk prices could come down another 0.5p/litre, though livestock headage payments would not be affected as these take the green rate prevailing at the start of the year. *