By By Robert Harris
THE revaluation of the Green Pound will wipe off an estimated £400 million from UK farm incomes, analysts have calculated.
The Green Pound, which is used to convert EU farm subsidies from Ecus to Sterling, was cut by 2.7% last weekend. As a result, 1 ecu is now worth 67.74p, reducing a range of livestock and arable support, including:
- A £2.21 cut in the November intervention price to £81.41/ t.
- A 0.56ppl fall in the intervention milk price equivalent.
- A reduction of about 1.5p/kg for OTMS cattle.
Arable farmers face even bigger cuts. Area aid payments will fall just over 6% from July and cereal area aid in England is now worth £241.72/ha, down from £257.24/ha.
The Home-Grown Cereals Authority puts oilseed area aid at just over £297/ha, almost £80/ha lower this season, due to the extra cuts caused by an estimated 15% overshoot in base area and high European prices.
Analysts expect Sterling to weaken gradually over the next 12-24 months. They believe that UK interest rates have now peaked and say doubt over the success of monetary union will fade.
Green Pound revaluation cuts UK subsidies,
FWi, 1 May — Click here
FWi, 5 May — Click here