The Euro exchange rate for BPS 2019 payments has been confirmed by the RPA as €1 = £0.89092. This compares to the rate set last year for BPS 2018 which was €1 = £0.89281.
The 2019 rate set shows a less favourable level compared to the 2018 position by 0.21%. BPS payments for England are set in Euros and then converted into sterling. This reference rate is an average of the European Central Bank exchange rates set in September.
How does this exchange rate compare to previous years?
The 2019 rate is the third most favourable since 2009, when it topped 90p per Euro. The exchange rate in the past has been as low as 67p per Euro.
Why is the information important for BPS?
This rate has the greatest impact on the level of payments if there is no change in the claim from year to year. This exchange rate will be used to convert English entitlement values, greening payment and young farmer payment elements of BPS into sterling and which in turn forms part of the calculation to arrive at 2019 BPS payments for those not opting to be paid in Euros. Farmers need to appreciate that there are a number of other factors that will influence the final level of payment at farm level.
Is this good news for farmers?
This is a reasonably favourable exchange rate when you look back at previous rates, but with Brexit uncertainty looming large over the industry the level of this payment was going be particularly critical this year. Key is certainty of payment timing and the NFU continues to monitor RPA claim processing performance closely.
Based on the 2018 BPS fund being worth c£1.75n at a rate €1 = £0.89281, this less favourable exchange rate now is likely mean the 2019 BPS fund could fall by around c£3.5m in Sterling terms, this fall in funds has been restricted as a result of using the average exchange rates for September as opposed to the spot rate set for the last day in September (30th); if that rate had been used the fall could have been c£13.5m.
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