THE Irish Farmers Association has called for a change in Irish exchange rate policy. It has also laid down a "clear marker" to the Government that it will be looking for compensation if there is a further green pound revaluation in the New Year.

IFA president Mr John Donnelly warned that a continuation of current policies could cost the agri food sector up to £100 million in 1997. "This would have serious implications for future competitiveness and employment," he said.

He called for a change in exchange rate policy to tracking a trade weighted index. "First this Government tracked the ECU and has now switched completely around to tracking sterling," he said. "Both positions are equally absurd."

Mr Con Lucey, the IFA's chief economist, pointed out that the pound had now appreciated by 5 per cent relative to its average value in 1995. "This revaluation has already cut the value of CAP support prices in Ireland by 2 per cent and threatens to further cut those prices by 3.5 per cent in the new year.

Mr Donnelly said he was seeking an "urgent meeting" with the Minister for Finance, Mr Quinn, in the context of the negotiations on the new national agreement.

Mr Donnelly stressed the IFA was aware of the authorities fears that allowing the pound to fall against sterling could stoke up inflation. "But all the available indicators on future inflationary trends have actually declined over the last 12 month period. In these favourable circumstances Ireland is in a good position to meet the single currency inflation criteria."

He added that recent Central Bank interventions to support the pound and maintain it at around parity with sterling were unnecessary and specifically damaging to the exporting sectors in the agrifood industry.

The next revaluation of the green pound, which dictates the value of intervention and support payments to farmers, is due on January 11th. The last revaluation, despite a last minute deal by the Minister for Agriculture, Mr Ivan Yates, cost the sector £50 million, according to the IFA.