Exchange rate blow for subsidy, but some payments may still rise

Rural business consultant David Hume, of land and property specialist George F White.
Rural business consultant David Hume, of land and property specialist George F White.

Rural advisers have warned of a new blow for farmers in the Basic Payment Scheme, with the lowest exchange rate for eight years.

The rate for subsidy payment from Euro to Sterling has fallen by almost six per cent on last year after being set at 1 Euro = £0.73 by the European Central Bank – the lowest figure since 2007.

There have also been changes to the value of payment rates on different land classifications.

Payment rates for Non SDA (severely disadvantaged areas), SDA and Moorland have changed from Euro 251.39/ha, Euro 226.36/ha and Euro 35.26/ha respectively to Euro 244/ha for Non SDA and SDA land and Euro 70/ha for Moorland.

George F White rural business consultant David Hume has been helping farmers to understand what the news means to them.

He said: “It means that a farmer who claims his Basic Payment Scheme (BPS) in Sterling and has, for example 150 ha of Non SDA, will see a reduction of about £2,545.

“Whereas if this farmer were to have SDA or Moorland land then he would be receiving a higher payment than last year – 150ha of SDA should see a very small increase of a few hundred pounds, and 150ha of Moorland will see that payment nearly doubled, with an increase of around £3,570.

“The change in payment rates this year has seen a shift in payments being moved ‘up the hill’.

“However, looking deeper into subsidies provided for farmers, especially from the Pillar 2 (Environment and Grants) bracket, it is much harder for upland and hill farmers to claim back as much Pillar 2 money than previously.

“This is primarily down to the new Countryside Stewardship Scheme being a lot harder for those upland livestock farmers to gain as much environmental funding compared to lowland farmers.”

George F White has developed a BPS calculator, giving an estimated value of claims, as well as calculating Greening requirements on a farmer’s holding. Visit www.georgefwhite.co.uk

• The Rural Payments Agency is sending a BPS update leaflet to some 88,000 farmers who submitted a 2015 application.

It will confirm payment rates, advise them of the next stages in the process and remind them to check their details.