Exchange rate hits BPS payment

Published 2 October 15

Dairy farmers will receive a lower return from the Basic Payments Scheme (BPS, formerly Single Farm Payment) for 2015/16 as a result of the weaker Euro. Defra announced the exchange rate they will use to convert the European payment into Sterling will be €1/£0.73129, a dilution of 6% on the €1/£0.7773 used in 2014/15. For a lowland dairy farm producing 1 million litres with 75 ha this will equate to a drop in income of around £1,000 compared with last year.

For the first time, the rate has been based on the average £/€ exchange rate for the whole month of September. Previously Defra had used the daily rate from 30th September each year to calculate the payment farmers receive. This was vulnerable to short-term fluctuations and market-savvy investors looking to make a quick profit from the knowledge that Defra would be hedging their own currency risk.

 

 

 

Region

Payment rate (€/ha)

2014/15 payment rate (£)

€1 = £0.77730

2015/16 payment rate (£)

€1 = £0.73129

Moorland

€70

£54/ha

£51/ha

Severely Disadvantaged Areas (Non-Moorland)

€244

£190/ha

£178/ha

Lowland

€244

£190/ha

£178/ha

 

 

 

The above rates are the net rates to be paid after the application of modulation, although financial discipline may also impact on the actual payment received.