Stronger Pound will cut headage payments

By Farmers Weekly staff

BEEF headage payments will fall sharply this year due to the strong Pound.

After a recent change to the rules, the Euro-based subsidies were converted into Sterling using the average exchange rate for December, which worked out at Euro1=62.67p.

This is a marked drop on last years rate of 71.11p, and more than wipes out the increase in the Euro value of the payments agreed under Agenda 2000, says NFU economist Peter King.

So, while rates in eurozone countries will rise (by Euro18 for suckler cow premium and Euro for beef special premium for steers), UK Sterling values for 2000 have dropped.

Suckler cow premium is worth just over 110 a head, including 8 a head from the national envelope introduced to help offset beef price cuts.

But farmers who claimed a headage payment in 1999 will also receive a second tranche of compensation to offset the abolition of the old agrimoney system which unfroze the green rate of exchange, says Mr King.

This is worth an extra 5 a head, bringing the total closer to last years 118.

Beef special premium for steers in 2000 is worth 76.46 a head, and for bulls 100.27.

These will also be topped up with smaller amounts of agrimoney compensation, taking payments to about 80 and 104.50, respectively (compared with about 88 and 109 in 1999).

Additional compensation is also available to offset the lower exchange rate used to calculate the 2000 headage payments.

But the government is unlikely to claim it, since it would have to foot most of the bill.

However, farmers leaders are to launch a campaign to claim this and other agrimoney compensation, thought to be worth a total of 450m, in the next few days.

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