New currencys arrival results in little change
New currencys arrival results in little change
Rolling out the k has been
relatively straightforward
in France, and at Le Mont
Hardy the transition
has caused only minor
hiccups, as Europe editor
Philip Clarke reports
LEURO est arrive! The k has arrived. From Jan 1, all transactions at Le Mont Hardy have been in the new currency.
"The changeover has gone remarkably smoothly," says farm partner John Lee. "Wed been dealing with ks for quite a while anyway.
"And since our financial year-end coincides with the calendar year, there have been no problems with running our accounts in mixed currencies."
The last French franc cheques, relating to three cull cows sold to a local dealer just before Christmas, were actually deposited last week.
These animals made 10F/kg, 11F/kg and 11.5F/kg for 270kg, 326kg and 324kg of meat respectively. That valued the cows at k412 (£253), k547 (£336) and k568 (£349) apiece – about 20% down on 2000 prices before BSE ripped through the French market.
Getting used to thinking in ks is going to take some time, Mr Lee admits. The tendency is still to convert back to francs, even though it will cease to be legal tender from the middle of February.
And with the official rate fixed at k1 to 6.559 francs, its not the easiest conversion to do mentally, as Mr Lee discovered to his cost at the weekly calf sale.
"Every Monday morning I take surplus calves to the covered market in Briouze. Last week, I had a nice Charollais cross Friesian bull calf, which I wanted F2000 for. The dealer offered me F1700 – they still haggle in francs – but I told him no, k300.
"He accepted this straight away and it was only when I got my k converter out that I realised Id let the calf go for F1968."
In sterling terms, that is still over £180 – a value not seen in the UK for many years. "There has been a decent upturn in the market recently because the main calving season is over and numbers are getting scarcer."
About the only other hiccup Mr Lee has had with the k is getting a k1 coin mixed up with an old 10F piece, which then got jammed in a supermarket trolley. Seeing as 10F is worth just over k1.5, it was a frustrating mistake!
But generally he is enthusiastic about the k, particularly as an emblem of European unity. It will also improve price transparency of farm inputs.
"Our philosophy is to try and keep business local, using local suppliers and selling to local dairies and abattoirs. I do not see us traipsing round Europe looking for the lowest k price on every input we buy. But it will help our local merchants and co-ops source more competitively and that should be passed on to us."
Aside from the new currency, farm operations are fairly routine at the moment. With the exception of one group of dry cows, all the livestock is indoors, generating a daily workload of feeding, watering, milking and cleaning.
Like farmers in the UK, the winter season is also a time for getting out and about.
Last week saw Mr Lee giving a presentation to a group of French farmers from six different units who are planning on setting up a partnership or gaec. This is the business structure used at Le Mont Hardy.
"There are numerous advantages with a gaec, including the opportunity for farmers to pool resources," says Mr Lee. This is becoming increasingly important as livestock farms have to improve their pollution controls under the governments mise aux normes (bring up to standard) campaign.
Initially state funding was targeted at larger units and by forming a gaec farmers would have a better chance of getting this assistance. And forming a gaec at the same time as taking on a new entrant also entitles the holding to a higher level of installation aid.
Another advantage is the clear delineation of work responsibilities. "Often what goes wrong in group situations is that people do not understand each others priorities or responsibilities. Setting up a gaec helps formalise these relationships."
At Le Mont Hardy, Mr Lees primary responsibilities are the youngstock, grassland establishment, fencing and administration. Other partners deal with the dairy herd, buildings maintenance, the pig unit and machinery.
"The roles are not set in stone and we try to be flexible. And all the major decisions on what crops to grow, what stocking rates to maintain, what equipment to buy and what livestock to sell are taken collectively."
Having a gaec also helps formalise the profit distribution. "We operate on the basis of equal work deserves equal pay, so we all get the same k1100/month (£670/month) basic wage. Any profit at the end of the year is then either reinvested, or allocated on the basis of each individuals contribution to the gaec." *