Revaluation hits livestock and arable aid

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

  • For this and other stories, see Farmers Weekly, 8-14 May, 1998

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