The 2018 exchange rate to be used for 2018 Basic Payment Scheme (BPS) Payments has been set at €1= £0.89281. This represents a very slight decrease of 0.21% on the 2017 rate.
The reference rate used is an average of the European Central Bank exchange rates in September. This is the exchange rate that will be used to calculate the BPS, greening and young farmer elements of the CAP direct payments regime.
NFU Cymru President John Davies said “With the exchange rate now set, farmers’ attention will be turning to the delivery of the BPS payments. The drought conditions this summer, which followed a long and wet winter, have placed severe pressures on many farming businesses. While the weather has returned to normal in recent weeks and farmers are desperately trying to make up their depleted stocks with some late forage cuts, costs for winter feed and bedding remain high so cash flow will be an ongoing issue.
“We are hopeful that Welsh Government will be in a position to continue with their previous excellent payment delivery levels when the payment window opens on 1 December and we are pleased that this year, as a result of our representations following the summer drought, that Welsh Government, for the first time, is providing a loan option for farmers to apply for if their BPS payment has not been validated. It is hoped that further information on this scheme will be available shortly.
“We must of course remember that the certainty and stability that the BPS has provided to farming businesses and rural communities in Wales is now under threat. The current Welsh Government ‘Brexit and our Land’ consultation exercise confirms that the BPS in 2019 will be delivered in a similar way to 2018, but following that the consultation proposes a complete phasing out of this type of support between 2020 and 2025. This at the same time as the EU proposes to spend over 70% of its budget for 2021-2027 on direct payments.“Political instability, the rise of protectionist policies, trade wars and extreme weather all mean that the Basic Payment Scheme is as important as it has ever been in terms of supporting farmers to deliver high quality, safe and affordable food for our nation. Alongside this we know from research commissioned by the Union that for every £1 of support invested by Government in farming, we deliver over £7 back to the economy. I can see no evidence to suggest that the current Welsh Government proposals will deliver this return on investment and request that Welsh Government consider very carefully any changes that could impact on our capacity to produce the top quality food our consumer trusts and the impact that policy changes could have on our rural communities.”