Exchange rate for 2018 BPS payments confirmed
The exchange rate used to calculate the value of payments made to farmers under the 2018 Basic Payment Scheme has been confirmed.
As anticipated, the value of direct payments farmers can expect to receive will be in line with last year.
Under the rules of the Common Agricultural Policy (CAP), support payments for farmers across the UK are set in euros and then converted to Sterling using the average European Central Bank (ECB) exchange rate recorded across the month of September.
It has now been confirmed that the average rate in September has been £0.89281, with rates fluctuating between £0.90328 (5 Sept) and £0.88590 (20 Sept).
This means the conversion rate for 2018 is just 0.2% lower than in 2017 when the rate was €1 = £0.89470.
The 2018 rate set shows a small decrease on the 2017 position of -0.21%. The 2018 rate is the second most favourable since 2009, when it topped 90p per euro.
'More than ever'
The exact value of entitlements for 2018 will not be confirmed until November, as it is based on the total number of hectares of eligible land claimed for in each region.
However, at this stage, farmers look set to receive payments in line with last year.
The NFU said the exchange rate is "favourable" if compared to previous rates: "After a year the industry has endured significant impact from the wet and drought weather conditions, this monies will be needed more than ever," the union said.
"Key is certainty of payment timing and the NFU continues to monitor RPA claim processing performance closely and is seeking earlier bridging payments for those not paid in December 2018."
George Chichester, farming consultant at Strutt & Parker, said: “Looking forward, Defra has made clear that the 2019 Basic Payment will be paid in the same way as in 2018. In 2020, the payment will come from the UK government and will be subject to minor changes of simplification.
“Thereafter payments will fall and ultimately disappear altogether, with this likely to be phased over six years to 2027.”
