Farmers in NI look set to receive a significant boost to EU support payments for the second consecutive year as uncertainty surrounding Brexit continues to put pressure on sterling.

At the beginning of the third round of Brexit negotiations on Tuesday, sterling continued to decrease in value with the euro passing the £0.93 mark for the first time in eight and a half years.

The timing of the recent slide in sterling’s value will benefit NI farmers as the process of converting EU support payments from euro to sterling begins on Friday. If Wednesday’s rate of €1=£0.9250 is applied for September, NI’s share of Basic Payment, Greening and Young Farmers’ Scheme payments would rise by 8.5% or £23.5m compared with last year.

The exchange rate used to convert payments is taken as the average daily euro sterling exchange rate from the European Central Bank for the month of September.

Most financial analysts state that sterling is currently undervalued, but the consensus is that no significant recovery against the euro is likely in the short term. Some are forecasting further weakening of sterling against the euro and suggestions that the two currencies could reach parity before year-end also emerged this week.

A currency boost to EU support payments this year follows on from an 18% increase, worth £39m, last year. This came from the reduction in sterling’s value after the Brexit vote in June 2016.

Another increase in payments this year would also continue to offset (in sterling terms) falling entitlement values for farmers with Basic Payment entitlements worth more than the regional average of €226/ha (excluding Greening).

Although agricultural policy is set to change after Brexit, entitlements values (in euros) are still moving towards the flat rate in seven steps, with the third step taking place this year.

Advanced payments

Meanwhile, DAERA has said that a case is to be put to the

European Commission to allow the level of advanced pay-

ments made to NI farmers from 16 October to increase from 50% to 70% to help farmers affected by floods.