Union welcomes positive impact of exchange rate

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Sterling payments for the 2017 Direct Payments (Basic Payment Scheme, Greening Payment and Young Farmers’ Payment) will be made using the exchange rate of €1 = £0.89470.

On the basis of the new rate, it is estimated that the total net value of 2017 direct payments to local farmers will be boosted by £13million compared to 2016.

Direct payments are set in Euro and converted to Sterling each year using the exchange rate calculated in accordance with the EU regulations. In 2017, the rate is the average market rate for the month of September according to the European Central Bank.

The 2017 Young Farmer’s Payment will be paid at the rate of £49.90 per hectare. Young Farmer’s Payment is made on a per hectare basis up to a limit to 90 hectares.

The Ulster Farmers’ Union has welcomed the increase in the Sterling value of CAP payments, describing this as a boost for farmers. It says that given the impact of wet weather on winter bills, this early income boost is particularly welcome.

According to the Union, the exchange rate factor will act to boost Basic Payments by 5%, year-on-year, in Sterling terms. This is up 22% from 2015, again thanks to the weakening of sterling. The weaker £pound has also raised some commodity prices.

“The combination of a better conversion rate and confirmed early payments will be a welcome cash flow boost. Cattle have had to be housed much earlier than usual, silage hasn’t been cut and harvest has been delayed. This is putting a cash flow strain on many farm businesses,” said UFU president Barclay Bell.

The UFU has been pushing DAERA and the European Commission to increase Northern Ireland’s basic payment advance limit from 50 to 70 per cent.

“Given the difficult year many farmers have faced, we believe there is a strong case for this. We are still waiting for a decision and expect it will happen given that other EU regions have already had their requests approved,” added the UFU president.