Subsidy payments to farmers set to fall again

Information from the Government’s Rural Payments Agency (RPA) showed that the European Exchange rate for Single Farm Payments (SPS) has been confirmed as being E1 to £0.80.

The rate is set against the European Central Bank official rate and represents a 7.92 per cent decrease on 2011.

It is the lowest rate since 2008.

The National Farmers Union’s senior SPS adviser Richard Wordsworth said: “Clearly the exchange rate for 2012 is less favourable compared to the last three years and will impact on SPS payments that will start to be made in December.

“This is also on the back of the final adjustment between 2011 and 2012 to entitlement values to arrive at a flat rate level of payment in England.

“This has been a more difficult year for farmers in many sectors and so the news of a less favourable exchange rate and therefore lower SPS payments will pose further challenges for businesses in the coming months. It also highlights the exposure farmers have to exchange rate fluctuations.

“The well-documented problems in the Eurozone have undoubtedly contributed to deterioration in the value of the euro.

“Nevertheless, today’s announcement, together with the forthcoming announcement on the flat rate entitlement values for 2012, will help farmers and growers plan for the coming months’ budgets and cash flows.”

Payments under the new scheme will be made from December this year. The RPA said it was important that it was given up to date bank details for all those making claims and advised farmers to check their records.

“On average, some 500 claimants a year fail to tell RPA of changes to their banking details and this causes delays in payments being made,” it said.

Subsidy payments are made to farmers in all EU member states as a means of providing them a guaranteed income that is not linked to production.