With EU subsidy payments being converted from euro to sterling based on the average daily exchange rate during September, further weakening of sterling over the past week has boosted NI farmers’ EU subsidy payments. A 70% payment advance is due to issue this year from 16 October 2016.On Monday, the daily conversion rate from the European Central Bank (ECB) was at its highest level in three years at €1=£0.8709.
With EU subsidy payments being converted from euro to sterling based on the average daily exchange rate during September, further weakening of sterling over the past week has boosted NI farmers’ EU subsidy payments. A 70% payment advance is due to issue this year from 16 October 2016.
On Monday, the daily conversion rate from the European Central Bank (ECB) was at its highest level in three years at €1=£0.8709.
Sterling had weakened against the euro as markets reacted to speculation that Brexit would see the UK exit the Single Market and that Article 50 would be triggered in early 2017.
Other factors included positive economic data from Germany and survey results showing low confidence in the UK financial sector.
With the daily exchange rates for the last three days of September still to be calculated at the time of going to press, if Tuesday’s rate of €1=£0.8641 is assumed up to Friday, then the average conversion rate for September stands at €1=£0.8526.
With the rate of €1=£0.7313 used last year to convert EU subsidies, this means average payments in NI are set to increase by around 16.6% this year.
For example, a farmer who had a payment worth £20,000 last year from entitlements already at the NI average of €330/ha, the payment will increase to around £23,320 this year.
Those farmers who have entitlements above the NI average will also see an increase in sterling terms, despite their entitlements continuing to transition downwards to a flat payment rate of €330/ha by 2021.
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