24 December 1998
Euro to benefit pig farmers
THE advent of the European single currency on 1 January will make life slightly easier for pig farmers, according an on-farm study by The Times.
The paper reports that Donald Rosss farm in the Scottish Highlands has been damaged by the strong Pound.
Sterlings strength has meant his subsidy on a standard Ecu50,000 grant from the European commission has plummeted to £34,000, against £42,000 in 1996.
But the introduction of the Euro is set to ease Mr Rosss financial pain, even though Britain is staying out of the single currency.
Mr Ross will be able to receive the grant in Euros within 18 months and will be able to borrow money at a much cheaper rate, the paper says.
The eleven so-called Euroland countries have a base lending rate of 3%, but the Bank of England base rate is 6.25%.
By 2000, the Mr Ross will be able to deposit money in a Euro bank account and use it as collateral to cover currency risks.
His European customers should be able to pay him in Euros and the account could be used to buy fertiliser, feed and machinery at competitive Continental prices.
Andersen Consulting estimates that UK farmers borrowing abroad could save £12,000 on a £100,000 loan.
The Ministry of Agriculture is expected to start paying subsidies to UK farmers in Euros by mid-2000, it says.
- The Times 24/12/98 page 22