The euro/pound exchange rate for the first Single Farm Payment will be €1 = £0.68195p.

Common Agricultural Policy support to UK farms is expressed in euros, therefore the European Commission must determine the exchange rate to convert the new Single Farm Payment into Sterling. The rate is determined on 30 September each year and the prevailing rate on 30 September 2005 was, according to the European Central Bank, €1 = £0.68195.

NFUS Vice President Bob Howat said:

“Farmers can now calculate the sterling value of their Single Farm Payment. However, everyone needs to be aware that the estimates of payments sent out by the Scottish Executive are subject to percentage reductions for the national reserve, modulation and the beef national envelope. Farmers should also bear in mind that in that estimate, the example exchange rate used was 0.70p. Therefore payments will be lower than forecast.

“Because the exchange rate is set on one day, as opposed to an average across a full month as it used to be, there is always the worry that freak events in a 24-hour period could have a huge effect on the value. However, this year, it has worked out OK. The average across September would have been lower than this figure. Also, across a year in which the euro has fluctuated in value between 66 and 70 pence, the final figure is about middle of the road.

“We are still pushing the Scottish Executive to ensure payments are issued as soon as possible. The payment window opens in December. However, because of problems within the Rural Payments Agency, there will be delays for English and Welsh farmers which will have knock-on consequences for Scotland because of how the national reserve is funded. We have welcomed the Executive's plan to begin making payments as soon as possible in December and delivering on that commitment will be crucial for the industry.”

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