Rural Payments and Services

Exchange rate confirmed for 2015 direct payments scheme.

The exchange rate to be used for direct farm payments in 2015 has fallen.

The rate has been set at €1 = £0.73129 by the European Central Bank, a fall of almost six per cent compared to last year.

The decision affects about 15,400 Scottish famers who choose to receive in sterling support under the Basic Payments Scheme, which has replaced Single Farm Payments in the new Common Agricultural Policy (CAP).

The CAP budget imposed on Scotland – despite the best efforts of the Scottish Government to secure a fair deal for Scottish farmers – will decrease in 2015 for a second year in a row.

In addition, the European Commission is proposing to apply a budgetary control mechanism called financial discipline for a third year, which would mean a further reduction of almost one per cent on all direct payments over €2000.

This will be confirmed later in the year.

Rural Affairs Secretary Richard Lochhead said:

“The sterling / euro exchange rate has been on a downward path over the past two years and, whilst there has been a recent modest recovery in that last few months, many farmers and crofters will have been anticipating a reduction.

“Given the current challenges facing Scottish agriculture, producers will no doubt also be disappointed at the further reductions to payments from the financial discipline and also as the cuts imposed on Scotland’s CAP budget begin to bite.

“Despite the best efforts of the Scottish Government to secure a fair deal for our farmers, they have been continually short changed by the UK Government, losing out on the full £190 million convergence uplift, the £1 million a year from the red meat levy and, most recently, in the allocation of EU emergency aid monies.

“The Scottish Government is pulling out all the stops to be able to start making payments by the end of this year. But with more than 21,000 funding applications to process and the EU having left so little time between policy decisions and implementation of the new CAP, it was always clear that 2015 was going to be a challenging year. That is why the Scottish Government has already been in contact with the banks to encourage them to support Scottish farmers at this difficult time.”