WIREDGOV

The exchange rate to be used for the 2014 Single Farm Payment Scheme has fallen.

The rate has been set at €1 = £0.7773 by the European Central Bank, a fall of almost seven per cent compared to last year. The decision affects about 16,000 Scottish famers who choose to receive their Single Farm Payments (SFP) in sterling.

In addition, the European Commission is proposing to apply a budgetary control mechanism called financial discipline for a second year, which would mean a further one per cent reduction on all direct payments over €2000. This will be confirmed later in the year.

2014 is the first year of the new Common Agricultural Policy (CAP) period which sees a reduction in Scotland’s farm funding budget. However, only 9.5 per cent of direct farm funding will be transferred to the rural development programme in the new CAP period compared to 14.5 per cent in 2013.

Rural Affairs Secretary Richard Lochhead said:

“The sterling / euro exchange rate has fluctuated in recent years and so this reduction is not entirely unexpected. Nor is the reduction in Scotland’s CAP budget which was imposed upon us - despite the best efforts of the Scottish Government to secure a fair deal for Scotland’s farmers.

“The scale of the financial challenge we are facing in this CAP budget period will now be clear. However, this is the final year of Single Farm Payments – 2015 will see the start of Scotland’s new CAP package which will target support at genuinely active farmers – including new entrants – as well as specific measures to support Scottish livestock producers and the environment. It is the best possible deal under the difficult circumstances we find ourselves in.

“I know that direct farm support is vital for many of our farmers, who will want to know how much their 2014 payments will be. The Scottish Government’s Rural Payments and Inspections Directorate (RPID) will shortly be writing to farmers with more information about this.

“The Scottish Government has a strong track record in making early Single Farm Payments, with typically 90 per cent of farmers receiving funds by the end of December. We are striving to achieve a similar timescale for payments this year, but need early clarity from Europe on the level of any further mandatory reduction we will have to apply.

“We are working hard to ensure that farmers receive their payments as early as possible and farmers can help with this by responding promptly to any queries they may receive from Scottish Government officials.”

Notes To Editors

All payments for direct farm payment schemes are set in euros. The conditions on how to convert these amounts into the national currencies of Member States that do not use the euro are set in European Commission Regulations. The regulations allow the European Commission to set in advance the date on which the exchange rate is calculated. For the 2014 scheme year, the rate for all direct payments is calculated on the last working day of September.