Euro payment window closes till 2006

FARMERS WHO want their single farm payment in euros, but have not applied to do so, will have to wait until next year to take up the option.

The European Commission has set the application deadline three months before the Single Payment Scheme’s operative date of Oct 1.

That means applications for euro payments should have been lodged by June 30.

Euryn Jones, head of agricultural policy at Barclays, said he was disappointed that some farmers would now have no chance to benefit from interest rate savings this year.

“It’s a shame, given that farmers won’t receive their SFP until well into 2006,” he added.

But farmers who missed out this year will be able to claim in 2006, as the payment currency can be changed for each claim year.

That would allow farmers to use their SFP to service the cost of borrowing in euros, which is currently 2%.

“We would strongly advise farmers to use their SFP to pay off loans in euros, as the interest rate reduction is significant,” said Mr Jones.

“At current rates, farmers could save £2500 for every £100,000 borrowed.”

There were predictions that the gap between sterling and euro interest rates would narrow, said Mr Jones.

“But with rates as they stand, it works well, and farmers may be able to fix rates in either currency for the duration of the loan.”