Member Article

Basic Payment Scheme Exchange Rate Lowest Since 2007

The 2015 Basic Payment Scheme exchange rate has been confirmed for farmers who receive their subsidy payment in Sterling and it is not good news. The rate for this year has been set at €1 = £0.73129, by the European Central Bank - a fall of nearly 6 per cent compared to last year and the lowest it’s been since 2007.

David Hume, a Rural Business Consultant at land and property specialists George F White, who are working closely with the region’s farmers to help them digest and understand the news, explained: “The previous year’s exchange rates were set using the European Central Bank day exchange rate as at the 30th September. However, this year has seen a change in the way the exchange rate is set by taking the average across the whole month of September.”

Not only is the exchange rate far lower than last year, there has also been a change in the value of payment rates on different land classifications. Payment rates for Non SDA, SDA and Moorland have changed from €251.39/ha, €226.36/ha and €35.26/ha (2014 Flat rate), respectively, to €244/ha for Non SDA and SDA and €70/ha on Moorland for 2015. Modulation has been set at 12 per cent initially, for this year, with the transfer of funds between Pillar 1 (BPS) and Pillar 2 (Environmental and Grants etc.) being applied to the whole pot of the BPS budget, compared to previous Single Payment Scheme (SPS) funds prior to 2014 which were applied at an individual claim level.

David clarified: “It means that a farmer who claims his BPS in Sterling and has, for example, 150 ha of Non SDA will see a reduction of about £2,545. Whereas, if this farmer were to have SDA or Moorland land then he would be receiving a higher payment than last year. 150ha of SDA should see a very small increase of a few hundred pounds and 150 ha of Moorland will see that payment nearly doubled, with an increase of around £3,570. The change in payment rates this year has seen a shift in payments being moved ‘up the hill’. However, looking deeper into subsidies provided for farmers, especially from the Pillar 2 bracket, it is much harder for upland and hill farmers to claim back as much pillar 2 money than previously. This is primarily down to the new Countryside Stewardship Scheme being a lot harder for those upland livestock farmers to gain as much environmental funding compared to lowland farmers.”

For those farmers wishing to understand what they might be paid, George F White has developed a ‘BPS calculator’ which works out an estimated value for this year’s claim, as well as calculating the Greening requirements on a farmer’s holding. For more information about this calculator/to use it, please visit: www.georgefwhite.co.uk or contact David Hume on davidhume@georgefwhite.co.uk Tel: 01665 511986

This was posted in Bdaily's Members' News section by George F White .