ARABLE farmers in the UK will receive about £80m more in arable area aid this year after the € clung on to most of its recent gains against sterling during June.
Cereal, oilseed, setaside and linseed payments for 2003 crops will rise by just under £20/ha (£8/acre) in most regions compared with last year.
Arable area payments are converted from €s into £s using the average exchange rate during June. Today's official figure marks the end of the process, as it covers the weekend and Monday (30 June).
The € averaged 70.4p over the month, 9% higher than a year ago.
Modulation will reduce the gross payment by 3.5% to help fund a range of environmental schemes, and regional over-planting penalties are likely to result in small scalebacks too.
Assuming a 1% penalty in England based on historical data, this would result in a net payment of about £249.50/ha (£101/acre).
Other areas will receive slightly less, due to lower yield bases on which aid is calculated.
And Scotland is also likely to suffer a higher scaleback, perhaps 4%, which would mean growers would receive cheques worth roughly £233/ha (£94/acre) in the lowlands.
Wales and Northern Ireland will escape over-planting penalties, and will attract payments of £221/ha (£89.50/acre) and £223/ha (£90/acre) respectively, in non-LFA areas.
Protein crops, which continue to attract higher aid, will be worth about £34-38/ha (£14-15/acre) more than other payments, depending on area. In England, for example, aid will amount to £287/ha (£116/acre).
Maize and associated setaside payments in England will be worth about £76/ha (£31/acre), assuming the usual large over-planting penalty of about 70%. Other regions will receive the same payment as cereals.
"Obviously, this is good news," said Richard King of farm business consultant Andersons.
"A gain of nearly £20/ha is not to be sneezed at.
"But it does show how beholden we are to currency exchange rates – CAP reform or not, that will not change.
"The exchange rate was better than we were predicting three or four months ago, but it could have been even better – we were looking at 71-72p at the beginning of June."