Brexit vote fall in Sterling signals boost for farmers' bank balances
BREXIT is expected to signal upheaval for the agriculture sector but in the short-term the north's farmers will enjoy a boost to their bank balances thanks to the weak value of Sterling.
The collapse of the pound following June's shock referendum result means next year's EU farm subsidy cheques will be worth up to 15 per cent more than last year in real terms.
While Sterling has made a slight recovery since the Brexit vote, some of the north's biggest landowners could bank up to £35,000 more than they did in 2015 due to an increase in the Euro-to-Sterling conversion rate.
In July, The Irish News revealed that some of the region's farmers receive more than £250,000-a-year in EU subsidies, with 100-plus farmers banking in excess of £100,000.
The exchange rate for EU farm subsidies is set at the end of September and a sudden surge in the value of the pound not withstanding, the rate for payments is expected to be finalised at around 83p compared to 73p this time last year.
Ulster Bank's Cormac McKervey said the pound remained weak compared to September 2015.
"This year, the expectation is that it will be around 83p though this is yet to be confirmed, as it will be the average exchange rate over the month of September," he said.
"Assuming a rate of around 83p, this would be up 14 percent on last year, and would be the highest since 2013 – more money would therefore be paid out to farmers through Single Farm Payments this year than last year and 2014."
Mr McKervey noted that the value of Single Farm Payments had been comparatively low in recent years.
"To put this into context, 83p would still be significantly below the 2009 rate of 90.9p, and would be around the average rate over the past seven years," he said.
Among the largest beneficiaries from the Common Agricultural Policy payments is the National Trust, whose regional arm drew down £358,000 in farm subsidies last year. If the exchange rate is set as expected later this month, the trust will receive an extra £50,000.
Several former Ulster Farmers Union (UFU) presidents also rank among the biggest recipients of EU funds. Larne farmer Campbell Tweed, who headed the powerful farm lobby group between 2004-2006, was paid £190,000 by Brussels last year.
Co Down farmer Graham Furey, whose two-year presidency was marred by a 2011 conviction for illegal dumping, received £51,000 in subsidies last year.
Whether the British government retains farm subsidy payments at current levels post-Brexit remains to be seen.