NEWS

Welcome income boost as BPS exchange rate set

Published October 4th, 2016

Farmers are set to receive a welcome boost in income from Europe this year. The 2016 exchange rate to be used for 2016 Basic Payment Scheme (BPS) Payments has been set at €1= £0.85228. This represents an increase of 16.5 per cent on the 2015 rate and is the most favourable rate since 2011.

The reference rate used is an average of the European Central Bank exchange rates in September. This is the exchange rate that will be used to calculate the BPS, greening and young farmer elements of the CAP direct payments regime.

Rural

The improved exchange rate will be welcomed and will help cushion the blow for the many Welsh farmers who will see their support payments fall as part of the transition from the previous historic basis of support to the new flat rate based BPS. This will be important given that farm incomes have been under immense pressure as a result of difficult market conditions over the past 18 months or so as highlighted by the forecasts for net farm income for ‘all farm types’ for the year to March 2016 down by 25 per cent to £13,000.

A farmer claiming on Non-SDA (non severely disadvantaged area) entitlements who received £20,000 in 2015 should receive £23,308 for the same size claim in 2016, subject to financial discipline being at the same level, when payments start to be made from December 1

NFU Cymru President Stephen James said: “Farmers will see this favourable exchange rate as a help to their businesses in what has been a turbulent time for the industry with low commodity prices particularly for Welsh dairy farmers in 2016. The weaker pound is positive news for BPS payments and for exporting produce like PGI Welsh Lamb,  it must be remembered that that there is a downside as it does make imports more expensive and this can have a negative impact on production costs, with inputs like fertiliser and machinery becoming more expensive as the pound depreciates. ”

With the exchange rate now set, farmers’ attention will be turning to the delivery of the BPS payments. Late payments last year caused significant cash flow problems to many thousands of  farming businesses.

For advice on Basic Payment Scheme contact Berrys on 01743 271697 or email shrewsbury@berrys.uk.com or at Hereford on : 01544 598084  email Vicky.price@berrys.uk.com

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More about Vicky Price


MRICS FAAV
Chartered Surveyor
Tel: 01544 598084
Mobile: 07789 986904
vicky.price@berrys.uk.com

Vicky joined Berrys’ Hereford office when she returned home after  practising in the Eastern Region for four years, during which time she qualified as an Associate of the Royal Institution of Chartered Surveyors and a Fellow of the Central Association of Agricultural Valuers.

Vicky assists in all matters of rural agency and professional advice including estate management, valuations, landlord and tenant matters, letting and selling of land and rural property, Single Payment Scheme, environmental schemes and agricultural planning appraisals.

A local girl, Vicky is a farmer’s daughter from near Knighton. She has been a member of Clun Valley Young Farmers Club for many years and has a keen interest in the countryside and rural affairs as well as helping out on the family farm.