LEADERS of Britain's #3500m-a-year farm engineering industry are expected to add their voices later today to the pleas for action on the continuing strength of sterling.

In spite of 15% increase in the balance of trade to nearly #800m in favour of British farm machinery last year, the industry fears declining competitiveness will lead to a loss of jobs and even businesses this year.

Junior Agriculture Minister Elliot Morley, who is due to address the Agricultural Engineers' Association's annual conference in London today, will be left in no doubt about the industry's concerns.

''While it is true that some of our members are multinational operations and able to operate a price transference system on components, the majority are British manufacturers whose fortunes are tied to the strength of sterling,'' says Jake Vowles, director-general of AEA.

''Ideally we would like to see sterling equivalent to $1.50 to $1.55 or around DM2.60. At present levels there are real problems. Already this year we have seen two members go into receivership, and I would anticipate that more members will disappear by amalgamation or takeover.''

Latest AEA projections indicate an all-time low of 11,000 tractor units being sold in Britain this year because of the economic recession in agriculture. This compares with a peak of 38,000 in 1976, the previous low of 13,000 in 1992, and a recent high of 19,000 in 1995.

''We are the pressure valve of the industry,'' says AEA economist Chris Evans. ''Farmers must buy feedstuffs, chemicals, fertilisers and other essential inputs, but they can put off buying new machinery if things are tight.

''Conditions are certainly tight just now but, of course, this could change in the second half of the year if there is a boom in, say, cereals or potato prices.''

Not many people are expected to put their faith in that eventuality, and this could mean job losses among those employed in manufacturing, distribution and dealerships.

Even sales of garden machinery for institutional and home consumers have seen a dip after the false dawn of an early growing season in February and March, with April showers dampening down demand. As an industry spokesman noted, at about #120m, the total volume of sales in the professional sector of grounds care cannot make up for the slide in agriculture.