Farmers losing millions due to poor foreign exchange management

Paul Langley
Paul Langley

UK farmers are losing millions of pounds when receiving subsidy grants from the EU as a result of failing to manage the fluctuations in foreign exchange rates.

Every year, farmers across the UK receive billions of pounds in subsidies under the Common Agricultural Policy. Many farmers are dependent on these subsidies to make ends meet, but are not getting the best deal on their foreign exchange rate to make the most of their money.

Farmers' incomes are supported by the EU through direct payments. Direct payments are mainly through the single payment scheme and single area payment scheme. When receiving such a payment, considering the best way to receive the money could save substantial amounts.

With single farm payments, farmers have to specify on their application whether they want to receive the subsidy in Euros or GBP.

When opting to receive the payment in GBP, the exchange rate used to calculate the GBP worth of the grant payment is fixed by the EU on the final working day of September.

However, farmers receive their payment in December, or even later, meaning the payment received will be based on a historic exchange rate.

This results in potentially receiving a lower value subsidy due to currency variations that have taken place in the previous months.

Paul Langley of OSTC FX, said: "Foreign exchange matters arising through UK farmers receiving grants from the EU is something that is gaining more and more prominence, yet there seems to be limited action taking place to help those get the most of the funds they receive."