Entitlements

benjydagg

Conmaicne Mara wrote: »

Benjy,

You may or may not know the answer to this. There was a grant for native forestry in SAC land. I was advised by a forestry company to wait and see how CAP pans out. Previously they had €515 a hectare plus what ever SFP had been drawn down on that land. Do you know if that is to be continued?

I'd be very wary of any company quoting those figures to you. I have 9HA of Native woodland, previously designated NHA. It is existing woodland that had to be fenced, and infilled with 100 or so native trees.
My TOTAL yearly premium is less than €900. Who ever told you €515/HA? Ask for proof.
It took me two years to get approval. Funds are VERY limited.
Get a second opinion. From a distance I think you should leave it in grass.

kevthegaff

Lads i have 84 hectares, my entitlements in the past were 284 will i get it on the whole land? will it go up or down??

benjydagg

Sami23 wrote: »

How and where do you apply to purchase entitlements from the national reserve and are they available at face value or how much do they cost ?
Also, can you choose what value thay are ?
Sorry about these basic questions as I know they will be easily answered by most of you.

farmentitlements.ie will give a rough guide price. As can be seen from today's figures, the market is going to explode.

Finally lads are realising it.

benjydagg

kevthegaff wrote: »

Lads i have 84 hectares, my entitlements in the past were 284 will i get it on the whole land? will it go up or down??

How many entitlements have you?

Conmaicne Mara

benjydagg wrote: »

I'd be very wary of any company quoting those figures to you. I have 9HA of Native woodland, previously designated NHA. It is existing woodland that had to be fenced, and infilled with 100 or so native trees.
My TOTAL yearly premium is less than €900. Who ever told you €515/HA? Ask for proof.
It took me two years to get approval. Funds are VERY limited.
Get a second opinion. From a distance I think you should leave it in grass.

No it's above board and been done, Delphi Lodge in Mayo did some SAC land above a pearl mussel river. Will have to investigate it again.

kevthegaff

I have 77 entitlements

benjydagg

kevthegaff wrote: »

I have 77 entitlements

If your reference area is greater than 77HA, then you could buy entitlements to the reference area.
Your entitlements (in my opinion) shouldn't be cut by much if any, under the new scheme.

kevthegaff

benjydagg wrote: »

If your reference area is greater than 77HA, then you could buy entitlements to the reference area.
Your entitlements (in my opinion) shouldn't be cut by much if any, under the new scheme.

thanks benny, i rentled land with maps last year 4 hectares(never entitlements claimed on it) will i get paid for these also

Sami23

kevthegaff wrote: »

thanks benny, i rentled land with maps last year 4 hectares(never entitlements claimed on it) will i get paid for these also

You will get paid for these 4 hectares IF you buy entitlements for them. The amount you get paid will depend on the value of entitlements you purchase. Obviously the higher the better but these will cost more also.

kevthegaff

Could I apply under the nat reserve ror those 4 hectares

just do it

benjydagg wrote: »

If your reference area is greater than 77HA, then you could buy entitlements to the reference area.
Your entitlements (in my opinion) shouldn't be cut by much if any, under the new scheme.

Where's the department statement to back this up?

ellewood

just do it wrote: »

Entitlements might be cheap yet if landlords sell en-mass. Did some back of fag pack sums last night and purchase multiple pretty much negates return on high value entitlements. I feel a spreadsheet coming on (I know, sad, sad, sad :rolleyes:)

If ya ever get that spreadsheet done dont be shy with it:D
I think ya would want one to make up is it worth buying them there's so many variable's in it at the moment..

Sami23

kevthegaff wrote: »

Could I apply under the nat reserve ror those 4 hectares

No national reserve in 2014 Im afraid

kevthegaff

what about if land was bought, would you still have to buy entitlements? 2013 ref year? sorry lads a bit behind in this subject

patrickn

Take an example of a 50 HA farm where there are only 25 entitlements @ 100 euro each. If the Dept. go down the route of dividing this value over all his land declared in 2013 ie. 50 HA. that would leave him with 50 entitlements @ 50 euro each.

However if the minimum value per Entitlement is set at say 140 as proposed in the new agreement is he not entitled to have 50 entitlements at 140 euro each. Any one hazard a guess how this will work out.

benjydagg

just do it wrote: »

Where's the department statement to back this up?

without predjudice;


If the applicant claimed on 84 ha in 2013, then my understanding is that in 2015 if he claims on the same area, then his entitlements going forwards are 84.
So, if he maximises his payment this year, it will be spread over the 84 units.

I an not an advisor, these are my own personal assumptions from reading the commission rules and the minister's statement of 14/01/2014.

benjydagg

patrickn wrote: »

Take an example of a 50 HA farm where there are only 25 entitlements @ 100 euro each. If the Dept. go down the route of dividing this value over all his land declared in 2013 ie. 50 HA. that would leave him with 50 entitlements @ 50 euro each.

However if the minimum value per Entitlement is set at say 140 as proposed in the new agreement is he not entitled to have 50 entitlements at 140 euro each. Any one hazard a guess how this will work out.

Provided that the applicant applied on the full 50ha in 2013, then by 2019, his entitlements should be increased incrementally to approx €150/HA.

50 x €150 = €7,500
In theory a 300% increase.
But in reality with inflation, taxation, and fek knows whatever else is in the pipeline, not a great boost to the income of a 123 acre farm.

Extreme example, he buys 10 x €1000/ha at 3 times face value. Total cost approx. €31,500.
in 2014 his gross SFP is 25 x €100 + 10 x €1000 = €12,500 GROSS
2015 €12,500 divided by 50 = €250/ha entitlement value.

PROVIDED APPLICANT ABIDES BY GREENING AND CROSS COMPLIANCE then I predict (personal opinion again) gross income will be €12,500 x years 2014 to 2019 inclusive i.e. €75,000 GROSS.
It makes sense to me. But most people don't see any advantage. The purchase has to be paid for. I sold cattle to do it. I see 2020 being a rollover year. And it gets readjusted to 2028. Remember who we are competing against. Czech average farm size over 200ha. They will be very happy to get €150/ha. Convergence is going to be slow.. very slow as the farmers with large per €/HA cannot be put out of business to keep uneconomic farms grazing horses and donkeys.

20silkcut

I have two entitlements that I am not using due to road CPO and digitising etc.
They are worth about 460 euro each. What sort of Capital gains would I have to pay if I sold them.
Would you be liable to CGT on these even if your not making any profit on the farm?

benjydagg

20silkcut wrote: »

I have two entitlements that I am not using due to road CPO and digitising etc.
They are worth about 460 euro each. What sort of Capital gains would I have to pay if I sold them.
Would you be liable to CGT on these even if your not making any profit on the farm?

€460 x 2 units x 2 times value (estimated value) = €920 = €1,840
Less sale costs (if any) €60 Income is €1780
Personal CGT exemtion €1,270
Tax due €510 x 33% = €168.30

All above are approximate. Talk to a financial adviser. I'm a farmer..

Sami23

benjydagg wrote: »

If the applicant claimed on 84 ha in 2013, then my understanding is that in 2015 if he claims on the same area, then his entitlements going forwards are 84.
So, if he maximises his payment this year, it will be spread over the 84 units.

these are my own personal assumptions from reading the commission rules and the minister's statement of 14/01/2014.

This is how I see it also going on the info. we have been given so far.

benjydagg

20silkcut wrote: »

I have two entitlements that I am not using due to road CPO and digitising etc.
They are worth about 460 euro each. What sort of Capital gains would I have to pay if I sold them.
Would you be liable to CGT on these even if your not making any profit on the farm?

Read Peter Young in The Farmer's journal. He has interesting views on surplus entitlements.

And this will push up the value even more if less are being sold...

JCB1

More detail in this weeks Journal on Entitlements but not alot on the 'Young Farmer' top up. Does anyone have any detail on the criteria to qualify? e.g. What qualifications, when does the young farmer have to start farming - could it be 14 or 15 ?

towzer2010

benjydagg wrote: »

Extreme example, he buys 10 x €1000/ha at 3 times face value. Total cost approx. €31,500.
in 2014 his gross SFP is 25 x €100 + 10 x €1000 = €12,500 GROSS
2015 €12,500 divided by 50 = €250/ha entitlement value.

Benjy is it definitely the case that the high entitlements and low entitlements will be added together to get the average?

paddysdream

towzer2010 wrote: »

Benjy is it definitely the case that the high entitlements and low entitlements will be added together to get the average?

According to the paper its either the sum of money drawn(ie the actual cheque you will receive) in 2014 OR the value of entitlements you own (used/unused/leased?) in 2014 less the budget cut,less the cuts for national reserve,young farmers,protien crops etc(about 8% or so I think)plus add in the sheep grassland (gross or net?Coveney wouldn't say) if you get it;divided by the number of hectares farmed in 2013 or 2015 ,whichever is the lesser.

No decision made yet(that we have been told about!) as to whether its gonna be the value of entitlements owned or the sum of money drawn down which will be the basis for calculation.Won't matter to anyone who is using all their entitlements and have none leased in or out.Also he seems to be wavering on whether to include the sheep grassland money(bad idea in my opinion) or let the scheme,or something similar, run for the next 5 years.

So ,in a nutshell,yes entitlement values will be averaged.

Simple example;

50 hectares farmed in 2013 2014 and 2015;
25 entitlements at 200 and 20 at 450 (all net ie what you get after modulation etc)5 hectares with nothing on them.
Total value is 14000
Take off 8% approx ie 1120
Start with 12880 in 2015(disregarding greening as 99% of Irish farmers will qualify)
So then its 12880 divided by 50 hectares to give you your new starting point of 257 euro approx(bang on the national average).No cuts for this fella so!

Thats how I understand it anyways but ask a professional to be safe!!

20silkcut

Would it be correct to say that the lower the value of your entitlements the better?

This looks like a win win situation for big farmers who had way more land than entitlements.

towzer2010

paddysdream wrote: »

So ,in a nutshell,yes entitlement values will be averaged.

Simple example;

50 hectares farmed in 2013 2014 and 2015;
25 entitlements at 200 and 20 at 450 (all net ie what you get after modulation etc)5 hectares with nothing on them.
Total value is 14000
Take off 8% approx ie 1120
Start with 12880 in 2015(disregarding greening as 99% of Irish farmers will qualify)
So then its 12880 divided by 50 hectares to give you your new starting point of 257 euro approx(bang on the national average).No cuts for this fella so!

Thats how I understand it anyways but ask a professional to be safe!!

Cheers Paddy. My situation is that I've got 10 ha that I bought that has no entitlements. I did have them on my application for the last few years though. I've got 40 ha worth 191 each so = €7640

It will be €7640 / 50 = €152.80 for me post 2015. If it is going to be average wouldn't I as well to buy 10 of the highest value entitlements I can?

I will be talking to a professional as well but I'm interested in peoples opinions.

20silkcut

If you increase your individual entitlement value you will have less upward increase to reach the average.

It's the number if hectares that gives the biggest multiplier effect ?

just do it

20silkcut wrote: »

Would it be correct to say that the lower the value of your entitlements the better?

This looks like a win win situation for big farmers who had way more land than entitlements.

Yes, but only if they declared all that land in 2013.

just do it

towzer2010 wrote: »

Cheers Paddy. My situation is that I've got 10 ha that I bought that has no entitlements. I did have them on my application for the last few years though. I've got 40 ha worth 191 each so = €7640

It will be €7640 / 50 = €152.80 for me post 2015. If it is going to be average wouldn't I as well to buy 10 of the highest value entitlements I can?

I will be talking to a professional as well but I'm interested in peoples opinions.

If you're on the higher rate of tax definitely not worth buying. The multiple you pay, decrease in value, and tax cancel out the benefit. That's what my calculations told me.

just do it

towzer2010 wrote: »

Cheers Paddy. My situation is that I've got 10 ha that I bought that has no entitlements. I did have them on my application for the last few years though. I've got 40 ha worth 191 each so = €7640

It will be €7640 / 50 = €152.80 for me post 2015. If it is going to be average wouldn't I as well to buy 10 of the highest value entitlements I can?

I will be talking to a professional as well but I'm interested in peoples opinions.

If you're on the higher rate of tax definitely not worth buying. The multiple you pay, decrease in value, and tax cancel out the benefit. That's what my calculations told me.