The euro exchange rate for calculating Basic Payment Scheme 2019 payments has been set at £0.89092, a small fall on the 2018 figure. NFU Scotland says the impact this year could become the ‘worst of all worlds’.
As is now the norm, the 2019 rate is based on the average exchange rate across the whole month of September. This year’s rate is 0.21% below 2018, similar to a small fall of the same scale in 2018. Both 2018 and 2019 rates, however, follow lifts of 5% and 17% in 2017 and 2016 respectively.
“Traditionally, a weak sterling is good news for support payments and should strengthen the competitiveness of UK exports,” said NFU Scotland’s Director of Policy, Jonnie Hall. “But the downside can be higher priced imported inputs such as fertiliser, animal feed and machinery.
“This year, the uncertainty being generated by the very real possibility that we could crash out of Europe without a deal means we would face the worst of all worlds.
“That would lead to disrupted access to Europe for our goods; a crippling tariff schedule that would hit exports while handing a competitive advantage to some imports and high costs of imported inputs maintained.
“The good news is that applications to the first round of Scottish Government loan scheme letters closed on Friday and this new exchange rate will be factored in to the 95% BPS/Greening awards expected to arrive in bank accounts soon.
“That valuable cash injection into the rural economy should eases cash flow worries and allows bills to be settled and purchases to be made as we move into a very uncertain winter.”