Losing rented land (entitlements)

Qprmeath

This year Im losing 7 acres of land I have rented for many years. My entitlements have equaled my farmed land in recent year but now Im going to be roughly 3 hectares down. I assume I will lose the direct payment on this land but Im not sure how much. Also can I sell unused entitlements? If anyone could explain the situation to me in plain english I be very grateful.

rangler1

Qprmeath wrote: »

This year Im losing 7 acres of land I have rented for many years. My entitlements have equaled my farmed land in recent year but now Im going to be roughly 3 hectares down. I assume I will lose the direct payment on this land but Im not sure how much. Also can I sell unused entitlements? If anyone could explain the situation to me in plain english I be very grateful.

If you sell entitlements without land, the rules in 2016 were a 50% clawback to the national reserve, so straightaway you'd only sell 1.5 entitlements and the national reserve takes the remainder.
Much better to get someone to lease them off you,
They're supposed to be worth 50 - 75% of their face value per year paid upfront....... that could be pub talk though.

Bass Reeves

The present rule regarding sale of entitlements makes it uneconomical. 50% claeback to the national reserve. The general run of leasing is crazy from a leasee point of view with higher value entitlements. In general it seems the lease value is about 50% up a value of 250-300 and after that it is costing 80-90% of the value above that. I was looking at leasing some last year and when value was above 300/ HA after fees you were left with 7 euro / 100

coolshannagh28

Bass Reeves wrote: »

The present rule regarding sale of entitlements makes it uneconomical. 50% claeback to the national reserve. The general run of leasing is crazy from a leasee point of view with higher value entitlements. In general it seems the lease value is about 50% up a value of 250-300 and after that it is costing 80-90% of the value above that. I was looking at leasing some last year and when value was above 300/ HA after fees you were left with 7 euro / 100

How does this work out in the leased with land scenario are tenants paying landlords back the value of the entitlements in higher rent prices ,that seems to be the case around me and is this hampering land mobility and against the spirit letter of the reformed basic payment system ?

Bass Reeves

Some farmers equal expansion with profit. You can see this in tillage especially where farmers are trying to spread cost over more and more acres with little extra cost. IMO the majority of rented land is not leading to extra profit to the farmers involved. The more intelligent farmers with average land stacked them in 2015 and dropped rented land. But not all did this. Young farmer NR actually increases rental costs as lads scramble to rent land to set up entitlement on bare land. There is a lot of busy fools and well paid landlords.

Siamsa Sessions

Bass Reeves wrote: »

50% claeback to the national reserve.

I thought the clawback only applied if you received entitlements thru National Reserve or Young Farmer scheme and sold them the following year?

Bass Reeves

Siamsa Sessions wrote: »

Bass Reeves wrote: »

50% claeback to the national reserve.

I thought the clawback only applied if you received entitlements thru National Reserve or Young Farmer scheme and sold them the following year?

Any sale of basic payments is subject to 50% clawback. There is virtually no sale of farm payments bat present.

Qprmeath

A neighbour has offered me 5 acres. Not great land but I could put it in grass and still keep the majority of my lost payment. Think he wants about €100 an acre. Or would I be mad to do this? As someone said renting land just for basic payment is pointless?

Bass Reeves

Qprmeath wrote: »

A neighbour has offered me 5 acres. Not great land but I could put it in grass and still keep the majority of my lost payment. Think he wants about €100 an acre. Or would I be mad to do this? As someone said renting land just for basic payment is pointless?

It would depend on the land you mention that you could put it to grass, it sounds like it is in tillage or veg. Maybe owner will accept no rent first year while you reseed it however beware he may want a higher rent next year. At 100/ acre land is ok IMO if it is on a lease type agreement where you have it 5-7 years. Also can you draw DA at 80/ Ha it will bring rent down to less than 70/ acre. After that what is you payment/HA you want to protect.Willnthe extra land then turn a profit.

Nobody but you can answer these questions.