Minister announces exchange rate of €1 = £0.73129 for 2015 Direct Payment

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The exchange rate to be used to calculate the 2015 Direct Payment will be €1 = £0.73129, a reduction of £15m on the previous year, Minister Michelle O’Neill has announced.

On the basis of the new rate, it is estimated that the total net value of 2015 Direct Payment to local farmers would be in the region of £236.04million compared to £250.89million had the 2014 exchange rate applied.

Direct Payments are set in Euro and converted to sterling each year using the exchange rate calculated in accordance with the EU regulations. In 2015, the rate is the average market rate for the month of September according to the European Central Bank.

Noting the exchange rate, the Minister said: “This exchange rate is a reduction on last year’s rate and will be unwelcome news for local farm businesses as it will reduce the amount of Direct Payment received in what has been a difficult year for our farmers.

“The Direct Payment, like its predecessor the Single Farm Payment, remains an important element of farm incomes and although it has been a challenging year of change for my Department, I remain committed to ensuring that payments are issued to local farmers as early as possible.”

The Ulster Farmers’ Union said this latest fall in the Direct Payment comes on top of a £25 million drop last year, making the cash flow crisis farming families are facing as a result of poor prices all the more serious.

Under the CAP Basic Payment Scheme, the euro/sterling payment rate for 2015 has been set at 0.73129, based on the average exchange rate for the month of September. This is the first year it has been calculated over a month, rather than on the final day of September, but this has had little impact on the final figure. On top of this loss as a result of currency values, many farmers will also be hit by other changes to the CAP, which will reduce their payments.

The UFU says that since the 2013 conversion rate was set at 0.83605 we have seen a gradual slide. Last year it dropped to 0.7773 and now to 0.73129, meaning farmers are experiencing the lowest exchange rate in eight years. The UFU says that in an already difficult year this will be a major blow to farm businesses, planning to use December CAP payments to meet debts built up as a result of the drop in dairy, beef, lamb and grain prices this year.

Commenting on the calculation UFU president, Ian Marshall, said it was outside farmers’ control and underlined the volatility they faced because of global financial conditions.

“This makes it all the more important that the farm minister, Michelle O’Neill, and DARD officials ensure every effort is made to improve on the 93 per cent of applicants that received their payments in December last year,” he said, adding that farm businesses need these as soon as possible to help with cash flow difficulties.

“This is especially true this year, considering the number of sectors experiencing seriously reduced or even non-existent margins,” said Mr Marshall.