The euro-to-sterling exchange rate for calculating the 2014 Single Payment Scheme (SPS), set yesterday at 1 = £0.77730, is 7% lower than last year, delivering another downward blow to the annual payment.
While the exchange rate for farmers who decided to take payment in sterling was set on September 30 by the European Central Bank, what producers will actually receive won’t be known until next month. That’s the expected date for the European Commission’s announcement of the 2014 rate for its Financial Discipline Mechanism (FDM). Designed to create a financial reserve to help support the farming industry in times of crisis, FDM was applied to SPS for the first time in 2013 and will apply annually from now on.
According to the National Farmers Union (NFU), overall SPS payments are “looking like around a 12% reduction compared to SPS 2013″.
“Once a farmer has the flat rate entitlement values (expected in November), they will be able to work out the gross value of their 2014 SPS claim in England by multiplying the entitlement unit rate by the number of 2014 activated entitlements held (generally one entitlement activated against one eligible hectare of land),” said the union. “This gross value will then need to be adjusted for any reductions imposed by the RPA for SPS eligibility or claim breaches, then all claim payments over 2,000 may be subject to FDM.”
The next challenge, of course, is to actually get the money paid into the farm bank account.
“If members are concerned about the timing of the payments to aid cash flow, which continue to be under pressure for various reasons, they should contact the RPA,” said the NFU, adding that the union would be continuing to monitor RPA progress ahead of the 2014 SPS payment window.
“Members should make sure they have responded to all correspondence from the RPA and ensured that, if they have changed the bank account they wish the payments to be made into, to ensure they have updated the RPA with the correct bank account details. Each year payments are held up as the RPA cannot physically pay the farmer by BACS.”