Traders can choose to take EU money in euros

By FWi Staff

COMMODITY traders will be able to receive their Brussels money in euros from this autumn, easing their access to cheaper input purchases in continental Europe.

Making the announcement, farm minister Nick Brown said agri-food companies had made a strong case to receive things like export subsidies and intervention prices in euros, “so they can compete on an equal basis in the euro-zone”.

The move should encourage trading companies to set up Euro accounts, which could then be used to buy fertilisers, agro-chemicals and other inputs, without the risk of adverse currency movements.

But MAFF is not offering the same option to farmers “due to technical difficulties and the need to ensure that CAP payments to all claimants are safeguarded”.

The NFU said it was disappointed farmers could not join in. “There are considerable potential benefits for some farm businesses,” said chief economist Sion Roberts.

“Arable farmers who might receive one-third of their income as area aid could easily set up Euro accounts and use the money to invest in inputs or machinery from abroad.”

But traders have welcomed the move. “t should make it easier for us to deal with Brussels and will reduce the amount of currency hedging we need to do,” said Angela Gibson of merchant Glencore Grain.

MAFF is insisting that traders opt to receive payments in euros or sterling for a one-year period, giving three months notice of any change.

Merchant body UKASTA said this lack of flexibility would limit the schemes attractiveness.

Other schemes affected by the announcement include private storage aid, manufacturing subsidies for butter, plus certain beef and dairy promotion programmes.

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