Eugene McGrade, chairman of NIAPA
THE NEW SINGLE FARM PAYMENT rate for 2014 has been described as ‘another blow to a struggling industry’.
Sterling payments for the 2014 Single Farm Payment will be made using the exchange rate of €1 = £0.77730. On the basis of the new rate, it is estimated that the total net value of 2014 SFP to local farmers would be in the region of £240.5million compared to £265.6million for 2013.
This budget figure includes the impact of entitlement scaleback and the application of financial discipline in 2014.
The exchange rate accounts for £18.2million of the £25million reduction from 2013 to 2014.
Single Farm Payments are set in Euro and converted to sterling each year using the exchange rate calculated in accordance with the EU regulations.
For 2014 scheme year the rate is the market rate according to the European Central Bank on 30 September 2014.
As a result of the CAP Reform agreement, from 2015 scheme year onwards, the exchange rate for direct payments will be calculated using the average market rate during the month of September.
Peter Gallagher from the local SDA group admitted the farmers locally will lose out as a result of the rate.
“The exchange was set for the single farm payment on September 30 when the Euro equalled £0.77730.
This is a large reduction on the rate last year of £0.83605 which will mean a drop in this years single farm payment of around 9% on last year. When we add to this the scaleback which was previously known as modulation the overall reduction in this years single farm payment will be in the region of 16%.
“This is the lowest rate in seven years and as single farm payment makes up such a large percentage of farm incomes it is another blow to a struggling industry and highlights the problem with using one day in the year as the base for deciding the exchange.
“Under the reformed CAP package the average of the entire month of September shall be used to calculate the rate.
While any reduction in Single Farm Payment is unwelcome, the greater problem the industry has, especially the beef and sheep sectors, is the over reliance on single farm payment to make businesses viable. It is a sorry state of affairs when the viability of our farms is dictated by the particular exchange rate on a given day in the year. The sooner the industry returns to a position where the marketplace rewards producers for their produce at a rate which allows them to be profitable the better for everyone involved.”
Local NIAPA man Eugene McGrade from Tempo, explained he too was disappointed with the rate.
“Obviously as an organisation that represents the interests of farmers we would like to see the maximum possible payments to farmers. In the south farmers have received half of their single farm payment as an advance. This option has been ruled out by DARD in the North.
“NIAPA are also concerned that if there is a query with a farmers SFP claim such as DARD changing areas on a map or possibly a dual claim where by some error two farmers claim the same piece of land.
“For SFP DARD withhold the entire payment until the issue is fully resolved. Often the farmer is not at fault in any way however the query could delay payment by up to 6 months. This causes serious cash flow and financial distress to the farmer and potentially to his suppliers. NIAPA has always argued That DARD should release 80% of the payment and the balance after adjustment or penalties. This would significantly reduce hardship to the farmer and the industry as a whole.”
To read more.. Subscribe to current edition
Receive quality journalism wherever you are, on any device. Keep up to date from the comfort of your own home with a digital subscription.
Any time | Any place | Anywhere