26 June 1998

Hopes for strong euro

UK cereal growers must hope the European single currency due to be launched next January is a success, says Bill Hall, ADASs head of management consultancy services.

The importance of sterling to farm profitability means the UK probably has a much bigger interest than other EU countries in seeing the new currency succeed, says Mr Hall.

"The alternative is that the euro is perceived as a weak currency and the £ could strengthen further. If it does, the price of cereals could fall even more. We need a successful single currency. Without it we will all have headaches." The prospect of other countries joining the euro group and undermining it is fairly daunting, he adds.

All the signs are that Agenda 2000 proposals, with or without compensation for the strength of the £, will encourage wall-to-wall wheat. But growers should remember the benefits of rotations, advises Mr Hall.

"Changes must not be at the expense of yield. Lose the balance between output and cost savings and you are likely to move backwards," he warns. &#42