Weak Euro cuts arable payments

By Robert Harris

ARABLE area aid payments have been hit by the weak Euro, leaving UK farmers relatively worse off then their Continental colleagues.

Farmers in Euro-zone countries will receive 7% more aid for their cereal crops and set-aside in 2001 as agreed under Agenda 2000.

But UK cereal and set-aside payments for 2001 will be no better than last years net levels. Protein, oilseed and linseed payments will be lower.

Area payments are set in Euros and converted to Pounds using the average exchange rate between the two currencies during June.

Unfortunately, the Euros average value last month was just 60.8097p, 3.3% less than in June 2000.

English growers will now receive a gross payment of 225.60/ha, or 7.60/ha less than had last years rate been used.

Scottish growers outside Less-Favoured Areas (LFAs) will receive about 3.8% less (due to a lower regional yield base).

Northern Irish and Welsh non-LFA growers about 11% and 12% less respectively.

However, that figure is subject to 2.5% modulation, introduced by the government to help fund environmental schemes.

This shaves another 5.60/ha off the payment in England, slightly less in Scotland and about 5/ha in Wales and Northern Ireland.

The arable base area is also expected to overshoot in England and Scotland.

Richard King, of farm business consultants Andersons, suggests 3% is a realistic figure in England, and similar level in Scotland.

This would take the final payment to just 213.41/ha in England for cereals and set-aside – slightly below last years figure.

But agrimoney compensation eventually pushed last years back up to about 221/ha, added Mr King.

Proteins and oilseeds will also suffer sharper than expected falls.

In England, oilseeds payments fall to 249.97/ha after modulation and scalebacks, almost 64/ha less than last years final payment.

Protein crops will attract just 245.59/ha, a fall of 27.45/ha.