The fall in the Euro-Sterling exchange rate for Single Payment calculations to its lowest level in seven years could not have come at a worse time, says the Farmers’ Union of Wales.
The exchange rate, set by the European Central Bank at £0.7773/€1 on Tuesday (September 30), is the lowest since 2007, and comes against a background of falls in farmgate prices, a reduced Welsh CAP budget, and a 15% transfer to the Rural Development Programme (RDP) agreed by the Welsh Government – the highest rate in Europe.
Responding to the announcement, FUW President Emyr Jones said: “The Single Payment makes up a large proportion of Welsh farm incomes, and the poor exchange rate could not have come at a worse time given the collapse in what farmers are receiving for milk, lamb and beef.”
The combined impact of the Welsh Government’s 15% RDP transfer, a reduction in the Welsh budget of around 10%, and an exchange rate of £0.7773/€1 means a farmer who received a Single Payment of £10,000 in 2013 will see their payment slashed by more than 20% in 2014, to around £7879.
“The industry remains angry at the Welsh Government’s decision to reduce Welsh payments by the highest rate in the EU to fund the RDP, and with those who advised the government on this course of action.
“The poor exchange rate will add to this anger at a time when lamb, beef and milk prices have fallen dramatically. There will clearly be a knock-on impact on our rural economies.”
Mr Jones said the imminent fall in farm incomes should further focus the Welsh Government’s attention on ensuring the RDP is used to increase farm incomes.
“We cannot control the exchange rate, and despite our fierce lobbying against it, the decision to transfer 15% has been made. The only area where there is flexibility to act is in terms of ensuring Rural Development Funds are directed at bringing farm incomes back up, and not squandered.”
Mr Jones said he was bitterly disappointed at the recent confirmation that the Welsh Government did not intend to use those funds to implement an Area of Natural Constraint (ANC) Scheme.
“The FUW’s policy remains clear on this; without an ANC scheme we are at a competitive disadvantage to farmers in Scotland, Northern Ireland, Eire, and the rest of the EU, where such schemes are universally in place.”
