This year’s single farm payments are set for a significant boost as sterling takes another slide in the international currency markets.
At close of play Monday (21 September) the pound was quoted at just 1.103 euros, making the euro worth 90.66p.
This was the weakest it had been for five months and followed a statement by the Bank of England warning about levels of UK government debt.
With just a week to go before the EU Commission fixes the rate for converting 2009 single farm payments from euros to sterling, the latest fall in value of the pound is timely.
If the latest rate of 90.66p/euro were the rate prevailing on 30 September, then UK farmers would be looking at a 14.7% increase on last year’s SFP, when 79.03p/euro was the going rate, and 30% more than in 2007, when 69.68p/euro was used.
According to one industry analyst, each 1p change in the value of the pound is worth £23m to the UK rural economy in extra SFPs.
* For more details, see Phil Clarke’s Business Blog
Meanwhile, DEFRA has confirmed the new minimum size for making a claim for SFP in England will be 1ha from next year.
“By setting the minimum claim size at the lowest area allowed by the EU, we have minimised the amount of change for farmers and ensured as many as possible will be able to claim,” said farming minister Jim Fitzpatrick.
The option to introduce an “objective farmer test” to determine eligibility for SFP, as allowed under last year’s CAP “health check” is not being taken up by the government.
It is, however, delaying the integration of the separate protein crop payment into the SFP until 2012, something the NFU described as a “sensible approach”.
For more details see Phil Clarke’s Business Blog