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Exchange Rate Boosts Support Payments for 2016

Exchange Rate Boosts Support Payments for 2016

The exchange rate to be used to calculate support to be delivered through Scotland’s new Basic Payment Scheme is €1= £0.85228.

This compares with the exchange rate for the 2015 SFP €1=£0.73129; 2014 €1= £0.7773; €1=£0.83605 in 2013 and a 2012 SFP rate of €1= £0.79805.

For 2016, the rate has been based on the average exchange rate across the whole month of September; this is the second year this has happened. In previous years the exchange rate has been determined solely by the rate seen on 30 September.

The 2016 rate represents a 17 percent increase in the value of the Euro compared to last year, marking an increase for the first time in three years.

In addition, the European Commission has proposed to the application of a budgetary control mechanism called Financial Discipline for a fourth year, which would mean a reduction of 1.36 per cent on all direct payments over €2,000 – affecting around 14,500 farmers. This will be confirmed later in the year.

Jonnie Hall, NFU Scotland’s Director of Policy said: “Continued uncertainty about the impact of Brexit has weakened Sterling against other currencies, including the Euro.  Although that had helped strengthen the competitiveness of UK exports, prices for agricultural goods remains too low.  Today’s exchange rate setting provides at least some good news for support payments.

“Given the desperate situation many farmers and crofters in Scotland are facing with low prices, increased output costs and challenging weather, this will be a welcome boost at this time of year.”

Notes to Editors

  • The exchange rate used to determine the value of the new BPS is set by the European Central Bank.  In previous years, the Bank has used the Sterling/Euro exchange rate on a single day and the day traditionally chosen was 30 September, or nearest working day. Last year, for the first time, and again this year, the rate has been determined by the average throughout the month of September. The rate sets the amount that those who take the new BPS payment in sterling will receive.  
  • Scottish Government estimates that around 16,500 of BPS recipients have opted to receive payments in Sterling.
  • The annual budget of the EU must comply with the Multiannual Financial Framework (MFF).  When it comes to the CAP budget, if the ceiling for direct payments and marketing expenditure is to be exceeded, then financial discipline comes into play.  The rules say that the Commission must calculate an adjustment rate. The financial discipline rate to apply in 2016 is an estimated 1.36 per cent.

Ends

Contact Ruth McClean on 0131 472 4108




 

Date Published:

News Article No.: 228/16


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