8 November 1996

Green £ revaluation

means support falls

BRUSSELS has confirmed a 2.95% revaluation of the green £, to bring agricultural exchange rates more in line with the real value of sterling. The new rate is fixed at 81p/ecu.

The result is a 2.87% drop in support prices for UK farmers, taking November cereal intervention to £97.42/t. Assuming this is still the rate on Jan 1, and excluding any BSE-related top-ups, beef special premium for 1997 would be £88.04 and suckler cow premium £117.36. Extensification premium for less than 1.4 livestock units/ha would be £29.32 and for less than 1 livestock units/ha, £42.12.

Looking further ahead, milk super-levy would fall to 29.71p/litre next April and cereal area aid for English growers to £259/ha (£105/acre) next summer, again assuming no more green rate changes. Further revaluations are thought unlikely, but that does not rule out the possibility of devaluations should sterling weaken.n