UK farmers are losing millions of pounds when receiving subsidy grants from the EU as a result of failing to manage the fluctuations in foreign exchange rates, according to OSTC FX, a foreign exchange company based in Swansea, South Wales.

Every year, farmers across the UK receive billions of pounds in subsidies under the Common Agricultural Policy. Many farmers are dependent on these subsidies to make ends meet, but are not getting the best deal on their foreign exchange rate to make the most of their money.

Farmers' incomes are supported by the EU through direct payments. Direct payments are mainly through the single payment scheme and single area payment scheme. When receiving such a payment, considering the best way to receive the money could save substantial amounts.

With single farm payments, farmers have to specify on their application whether they want to receive the subsidy in Euros or GBP. When opting to receive the payment in GBP, the exchange rate used to calculate the GBP worth of the grant payment is fixed by the EU on the final working day of September. However, farmers receive their payment in December, or even later, meaning the payment received will be based on a historic exchange rate. This results in potentially receiving a lower value subsidy due to currency variations that have taken place in the previous months.

OSTC FX has helped a large number of clients in various sectors in the UK better manage their foreign exchange risk since it was formed in 2012, saving its clients in excess of £750,000 and processing £100 million of transactions. It is now alerting farmers of their ability to make the most of the EU subsidies they receive through better management of foreign exchange actions.

OSTC FX works with the finance directors of businesses with overseas trading activities to help them better manage and save money on this risk. Currently, these businesses either use their banks to exchange money or are forced to call around London-based brokers to seek a better deal.

The company is keen to educate the organisations it works with and prospective clients in many different sectors, so they have better skills and knowledge around this often poorly-understood area of finance.

OSTC FX aims to form long-term, transparent relationships with companies where any margins or fees it earns are fully disclosed. It also offers a free audit to companies where it assesses historic foreign exchange transactions and demonstrates any savings that could have been made.

Paul Langley of OSTC FX, said:

"Foreign exchange matters arising through UK farmers receiving grants from the EU is something that is gaining more and more prominence, yet there seems to be limited action taking place to help those get the most of the funds they receive. We have many foreign exchange experts who are able to help those receiving farming subsidies get a better exchange rate and therefore more money, through greater control over the rate of conversion.

"OSTC FX is a company that wants to provide education and know-how to those in the field, so they can get the best deal. Our continued growth and strong reputation in the market enables us to do this and we hope to enhance this initiative in years to come through working with many different industries."