BRITAIN'S farmers have been told that a bank account in the single European currency could cut the cost of borrowing and boost farm incomes.

Opening a euro account and taking support payments and export income in euros will enable them to apply for much cheaper euro loans and overdrafts, according to John Page, head of Barclays Agricultural Services.

It is estimated that, if all Britain's farmers switched to euro loans, this could cut #200m to #250m from their annual loan service bill. ''Farmers currently owe banks about #7000m, with a further #1500m outstanding to farm finance groups, with interest rates at least 3% higher here than in Europe. Each 1% cut in interest rate reduces payments by #70m to #80m,'' said Page.

Opting for European Union support payments to be paid in euros would also remove fears about the abolition of the agri-monetary system from the end of this year, and consequent payment reductions, and actually enhance those payments.

Using what he described as a ''typical 400-hectare arable farm'' producing a net profit of just over #30,000 in the current year on a sterling account basis, Page showed that switching to euro loans and payments - including that for 15% of the grain exported and for purchase of machinery, chemicals and fertilisers - could boost profits to more than #52,000.

He said that, in talks with agricultural ministers and officials, there had been no opposition to the concept, particularly as they wanted to familiarise the British public with the euro, and it was expected that farmers would simply tick their IACS forms for euro payment.

However, he cautioned that, as this would commit them for a year, they should give the matter careful consideration. Against this, all the indications were that euro loans would remain cheaper than sterling, at least for the foreseeable future.

Borrowing in sterling costs farmers about 9% to 9.5%, while Continental farmers pay as little as 4.5%.

Convergence of the ec-onomies was unlikely in the short term, allowing UK farmers to tap into lower European interest rates, Page added.

With much of Britain's #10bn worth of food and drink exports going to the Continent, trade in the euro would open up markets, eliminate exchange rate risks and cut conversion costs. This could be a particular boon to the lamb export business, which had been hard hit by the strong pound, he said.