With the deadline fast approaching for the submission of the 2010 single farm payment (SFP) applications (Friday 15th May 2009), one of the North East's leading rural experts has reported a significant increase in the number of farmers opting to be paid in euros as opposed to sterling.
David Coulson, founding partner of Durham-based Broadley and Coulson has been inundated with euro-related SFP enquiries - an issue especially pertinent in today's market as farmers look to take advantage of pound' current weakness against the euro and boost the value of their next single farm payment.
With the euro now worth around 92p, farmers could guarantee a subsidy cheque worth around 13% more than their 2008 payment. The exchange rate to convert SFPs into sterling, as fixed by the European Central Bank on 30 September each year, was 79p/euro in 2008 and 67p/euro in 2007, meaning those booking now at over 90p/euro will at least guarantee a significant gain over the last two years.
David Coulson, also policy spokesman for the Royal Institution of Chartered Surveyors (RICS) in the North East, commented: "The overwhelming majority of single farm payments are made in sterling but farmers can elect to be paid in euros and we've seen many more farmers thinking seriously about how they can protect the value of their single farm payments - locking in some of the potential value of by choosing to be paid in euros.
"Of course, there is the risk that sterling could continue to weaken further by September or later in the year when the SFP payment is received, so those farmers booking exchange rates now, could actually lose out, but looking at the bigger picture - they will still, at the very least, be 13p in the pound better off than in 2008.
"Every farmer knows that exchange rates, particularly those between the euro and sterling, are a key factor in determining farm profitability. Only around 600 of the estimated 106,000 SFP claims last year asked for euro payment and I expect this will be much higher this year based on my own experiences here in the North East alone."
Specialising in farms and smallholdings, country cottages and rural properties with land, Broadley and Coulson also offers a vast array of services spanning the residential and commercial sectors, acting as auctioneers, land agents, chartered surveyors, estate agents and valuers for a wide variety of clients.
For more information on consultancy services at Broadley and Coulson visit www.broadleyandcoulson.co.uk.
ENDS
Media contact
Michelle Oliver or Vicky Beynon
Golley Slater, North East
0191 2459020
michelle.oliver@golleyslater.co.uk / victoria.beynon@golleyslater.co.uk
