The farming community is being encouraged to look into their options now, as the deadline day for submission of Single Farm Payment (SFP) forms approaches.

With GBP EUR rates currently trading at 6 month lows, the time to act is now.

Most farmers in the UK rely on the SFP as a crucial source of income. In recent years, many have used foreign exchange brokers to try and maximise the amount they end up with, by electing to receive the payment in euros and setting a rate in advance with a currency hedging product, such as a Forward Contract or a Currency Option.

You can also maximise your payments even if you elect to receive it sterling by fixing these preferential exchange rates in advance. However, the main thing that using currency hedging products offers is a sense of security for farmers who rely on this crucial payment to budget ahead with confidence.

“Even if the exchange rates don’t make you a massive bit on top, by arranging your rates in advance you will be able to plan ahead for the year with peace of mind – fully aware with what you can expect from the SFP when it comes around and safe in the knowledge that you know what you’re worst case scenario will be,” explains Elisabeth Dobson, head of private clients at foreign exchange brokers, World First.

“When talking to clients, I’ve found that it is this stability and confidence which appeals most. Farmers want to know what they are dealing with as far ahead as possible.”

Setting the rates in advance, with the flexibility of setting a worst case rate built in, offers protection against negative moves in the market. However, it will also allowing you to benefit if the market subsequently moves in your favour.

“The euro has made some serious ground against its competing crosses in the past few weeks as the market has focused on the problems in the MENA region, as opposed to those of peripheral Europe, while the ECB has been very vocal about its fight against inflation,” adds Jeremy Cook, chief economist at World First.

“Obviously the single currency is nowhere near the levels it saw against GBP in 08/09 and I believe that this will be the best it trades at for a while against the pound.”