A currency analyst has cited unnecessary overheads in exchange rates as the key to allowing farmers to weather the recession.

During the process of making and receiving international payments (from sterling to euro or US dollars and vice versa) banks can take a substantial margin, often unbeknown to the farmer.

This margin can, according to Smart Currency Business, add significant costs and in some instances nearly five per cent can be added to a farmer’s annual costs.

Charles Purdy, director of Smart Currency Exchange, said: “When farmers pay for goods or services in a currency other than sterling or receive payments in a currency other than sterling, they pay quite a hefty price - in many cases, farmers have no idea how hefty it really is.

“The banks profit from providing poor exchange rates and charging various fees. They also fail to assist farmers on the money-saving option available to fix exchange rates so that budgets are maintained. Although many exchange rates are unfavourable right now, it is possible to ensure that you fix a rate so that it doesn’t get any worse over the course of the next few months or year.

“The outrageous truth of all this is that the banks have caused an economic collapse, they have then paid bonuses for failure and to add insult to injury, they continue to cause massive financial issues for farmers by exploiting them on the international payment process.”

Smart suggests using an international payment specialist to provide exchange rates, eliminate fees and mentor farmers as to the options available to fix exchange rates.

On average, specialists can save farmers three per cent (or £3,000) on every £100,000 transacted on better-than-bank exchange rates, according to Smart.

Topics