The exchange rate to be used for direct farm payments in 2015 has been set at €1 = £0.73129 by the European Central Bank, a fall of almost six per cent compared to last year. This compares with the exchange rate for the 2014 Single Farm Payment (SFP) of €1 = 0.7773, €1= £0.83605 in 2013 and a 2012 SFP rate of €1 = £0.79805.
For 2015, the rate has been based on the average exchange rate across the whole month of September, while in previous years the exchange rate has been determined solely by the rate seen on 30 September.
This year's 6 per cent reduction in the exchange rate comes on top of last year's reduced figure which was a 7 per cent fall on the year before.
The decision affects about 15,400 Scottish farmers who choose to receive their support in sterling under the Basic Payments Scheme (BPS), which has replaced Single Farm Payments in the new Common Agricultural Policy (CAP). Scottish Government estimates that 85 per cent of BPS recipients have opted to receive payments in Sterling with the rest taking their payments in Euros.
In addition to the cut in the exchange rate, the European Commission is proposing to apply a budgetary control mechanism called financial discipline for a third year, at an estimated 1.4 per cent (to be confirmed later in the year), affecting the new Basic Payment Scheme and coupled beef and sheep schemes. As a result, the overall ceiling for Scotland's support pot - which fell from €597m in 2013 to €580m in 2014 - is expected to fall again.
Market round-up
United Auctions sold 672 store heifers at Stirling on Wednesday to a top of 251.2p per kg and an average of 207.3p (-3.4p on the week), while 849 store, beef-bred bullocks peaked at 261.9p and levelled at 215.2p (+2.8p). One-hundred-and-seventeen store, B&W bullocks sold to 164.1p and averaged 143.1p (-3.8p), while 31 store bulls peaked at 233.1p and levelled at 219.7p.
In the rough ring 117 beef cows averaged 114.9p and 33 dairy cows levelled at 90.7p.
C&D Auction Marts Ltd sold 18 prime heifers in Dumfries on Wednesday to a top of 220.5p and an average of 183.7p.
There were 102 OTM cattle presented in the rough ring when beef cows averaged 121.4p and dairy cows levelled at 74.9p.
The firm also sold 977 prime lambs to a top of £75 per head and 188p per kg to average 140.5p (-9.7p).
The 362 cast sheep forward saw heavy ewes sell to £73.50 for Texels and average £52.01 (-£7.25), while light ewes peaked at £52.50 for Cheviots and levelled at £36.52 (-£1.74).
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