Single Farm Payments
We are the UK's leading foreign exchange provider and we are proud to support farms and agricultural businesses across the country. Our dedicated team will help get you the best rate for your Single Farm Payment.
When you receive your SP5 form from the Rural Payments Agency (RPA) you can choose to receive your Single Farm Payment in sterling or euros. We have a number of ways to help UK and European farmers make the most of SFP subsidies.
Watch our 60 second video to find out how we can help
Single Farm Payment Historic Rates
|Year||Rate set by ECB|
Examples of how we can help with your foreign exchange needs:
Single Farm Payments
Bryan Wood of Cow Pasture Farm in Milton Keynes fixed the rate for his Single Farm Payment (SFP) for 2010 and 2011.
He decided to receive his SFP in euros, giving him more control over the amount he would receive. He contacted us to help him arrange the transfer. He entered into a forward contract to lock into a favourable rate. It meant he received a higher payment for his SFP than if he’d chosen to receive his subsidy in sterling.
All he had to do was ask to receive his SFP in euros, and transfer them to World First through the Rural Payments Agency. We just asked him to put down a deposit to fix the rate in advance.
Bryan said: "I was pleased to have been able to fix the rate for my SFP two years in advance with World First, and have been delighted with the outcome of this year's SFP which has given me more pounds than I would have got has I elected to receive it in sterling."
Importing from Europe
Mr. Jones agreed to buy a wind turbine from Europe costing €350,00 with payment due 3 months later. He was concerned that the exchange rate might move against him during those three months, and decided to fix the exchange rate in advance. It let him know exactly how much the wind turbine would cost on the day.
He fixed a rate of 1.1610 (0.8613) to buy €350,000 and paid us an 8% deposit.
During the three months since agreeing the purchase and making the payment the exchange rate moved between 1.1670 (0.8569) and 1.0820 (0.9242). On the day the payment was due the rate was 1.0920 (0.9158).
If he had waited until the payment was due and exchanged the funds at the prevailing rate then, the turbine would have cost as extra £19,048.57.
Exporting to Europe
Mr and Mrs Squire agreed to sell a piece of machinery in Europe. They were due to receive payment of €190,000 in four months time.
They were concerned about the fluctuating sterling/euro exchange rate and decided to hedge their risk to protect what they would receive in sterling.
They could have fixed their rate at 1.15 (0.8696) with a forward contract – but they didn’t want to lose out if exchange rates moved in their favour.
So they booked a currency option called a participating forward and paid a deposit. It protected them from the rate moving against them, but let them benefit on half the amount if the rate moved in their favour.
The participating forward currency option gave them a 'worst case' rate of 1.1630 (0.8598).
At the end of the contract, the spot rate was 1.11 (0.90) - better than their worst case rate. This allowed them to sell half their euros at 1.1630 (0.8598), and the other half at 1.11 (0.90) – giving them an average rate of 1.1365 (0.8799).
By using a currency option they were approximately £2,000 better off than if they’d just locked into a forward contract.
However, if the spot rate at the end of their contract had been worse than their worst case rate, they would have had to have sold all of their euros at 1.1630 (0.8598).
Arrange a call back from one of our team today. Alternatively, feel free to give us a call direct on +44 20 7801 1050 or UK freephone 0800 542 7488.
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