Green £ devaluation is early
Green £ devaluation is early
FOR the first time in almost three years the green £, which is used to convert Brussels payments into sterling, has been devalued, lifting a range of support payments by 1.75%.
But livestock headage payments and arable area payments will not benefit because these are currently 11.5% higher than the green rate suggests, due to rules implemented to offset sterlings strength over the past two years.
The recent weakening of the £ had raised expectations of a devaluation next week. But the so-called three day rule triggered it on Monday instead.
Over threshold
This rule prevents monetary gaps of more than 6% opening up between member states. The gap between sterling and the Italian lire exceeded this threshold, triggering the devaluation.
Grain intervention prices will rise by £1.42/t to £82.83/t for November deliveries.
Pigmeat export refunds will be worth £206.76/t, about £3.50 more than now. Recently announced private storage aid for sheepmeat will be worth £964.87/t, and beef intervention £239.49/100kg.
Over-30-month-scheme payments will rise almost 1p to 55.1p/kg.
The change is unlikely to affect the milk price, though increased butter and skim milk intervention values theoretically add 0.2p/litre, says consultant Mike Bessey. Butter is trading at about 10% above intervention, and SMP intervention is closed until March.
If the £ stays at midweek levels, a further devaluation is certain from Oct 11, taking grain intervention prices up another £1.20/t.