A significant boost to EU support payments is expected for farmers in Scotland, as uncertainty surrounding Brexit continues to put pressure on sterling.

As Westminster resumes after the summer recess, sterling recovered some of its value after the euro passed the £0.93 mark for the first time in eight and a half years.

Movements in currency throughout this month will be important to farmers. The exchange rate used to convert payments is taken as the average daily euro-sterling rate from the European Central Bank for September.

If Wednesday’s rate of €1=£0.9142 is applied for September, Scotland’s share of Basic Payment, Greening and Young Farmers’ Scheme payments would rise by 7% or £27.26m compared with last year.

Some financial analysts have forecast further weakening of sterling against the euro, and there are suggestions that the two currencies could reach parity before year-end.

As Scotland moves towards a flat payment rate per region in 2019, this will help offset falling entitlement values for farmers currently receiving above average. It will also help to combat a potential increase in the cost of imports such as fertiliser, machinery, etc as a result of the fall in the value of sterling.

Figures obtained from the Scottish Government reveal that a total of 18,478 applications have been made for 2017 Basic Area Payments, 3% more than the number of eligible applications in 2016. Just over 2,100 applicants have applied for their payment in Euros, the rest are in GBP.