SIGNIFICANT SAVINGS in interest charges should be possible if the Rural Payments Agency achieves its objective of making the new single farm payment available in euros.
At a recent DEFRA briefing, the RPA revealed that it is seeking permission from Brussels for farmers to receive their SFPs either in sterling or in euros. It is hoped this will be approved in time for 2005 payments.
Once in place, farmers will then have the opportunity to take out euro-loans from their banks without any exchange rate risk, said Barclays agricultural policy director Euryn Jones. “By securing a reliable and regular source of euros, the loan can be serviced from income received in the same currency.
” And with base rates in the euro-zone set at just 2% compared with 4.75% from the Bank of England, farmers could save as much as 2750 in annual interest on every 100,000 borrowed, he estimated.
Mr Jones added that Wales and Scotland had already made firm commitments to give their farmers the euro/sterling option. “Some of our Welsh customers have already arranged loans,” he said.