Single currency could bring loss of £360m to UK farmers

27 March 1998

Single currency could bring loss of £360m to UK farmers

FEARS are growing that UK farmers could lose up to £360m of EU support payments with the start of the single currency next year.

According to NFU policy director Ian Gardiner, the problems will be that the current agrimonetary system, which freezes aid rates for cereals and livestock, will effectively end on Dec 31 this year. The freezing mechanism was worth £360m to UK producers this year.

From the New Year, with 11 member states entering the single currency, only the UK, Denmark, Sweden and Greece will be left outside.

NFU officials have been lobbying their Swedish and Danish counterparts to try and get a common negotiating position to take to the EU Commission and other member states on what arrangements should be made to adapt the agrimonetary system for those not involved in the single currency.

"Ideally, we need to secure the continuation of frozen rates, but, realistically, we are not hopeful of achieving that," Mr Gardiner told NFU council.

The other option was to win agreement on transitional compensation. But the four countries together did not have enough power to block EU decisions so their position was weak, he said.

Ben Gill, NFU president, said there were some signs that the UK government understood the difficulties ahead for farmers and would try to negotiate transitional relief. But he warned that getting agreement from the 11 other member states would be tough.

"I dont want to be in the position of getting to the end of the year and securing say £300m of transition aid only to have everyone say "Youve lost £60m". What you must realise is that we are starting these negotiations from zero," Mr Gill said.

He added that when he had raised the issue with EU farm commissioner Franz Fischler recently, the response had been: "Well, of course if you joined (the single currency) then you wouldnt have this problem."

By Shelley Wright

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