With MPs effectively in control of parliamentary business at Westminster and the threat of a no-deal Brexit on 31 October gradually receding, currency markets have reacted over the last few weeks, with sterling gaining some ground against the euro.However, it’s bad timing for farmers, with 2019 CAP payments converted from euro into sterling based on the average rate recorded by the European Central Bank throughout September.
With MPs effectively in control of parliamentary business at Westminster and the threat of a no-deal Brexit on 31 October gradually receding, currency markets have reacted over the last few weeks, with sterling gaining some ground against the euro.
However, it’s bad timing for farmers, with 2019 CAP payments converted from euro into sterling based on the average rate recorded by the European Central Bank throughout September.
During August, when Brexit uncertainty was at its height, sterling averaged €1 = £0.9155. If that rate continued into September it would have been the most favourable conversion ever for sterling payments since the current system was introduced in 2005 – only once (in 2009) has the rate been above €1 = £0.90.
At the start of this month sterling was worth €1 = £0.908, but since then it has gradually gained against the euro, and landed at €1=£0.881 on Tuesday. Across the entire month to date, it has averaged €1=£0.892, which is virtually identical to the rate used for 2018 payments.
The Scottish government is making loan payments to farmers to the value of 95% of their claim, starting on 4 October.
Assuming the UK leaves the EU later this year, this will be the last CAP payment coming to Scottish farmers.
The British government had committed to pay the same cash total in funds until the end of this parliament, which initially would have meant payments in 2020 and 2021.
However, with a general election due, that decision will be made by the next government.
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