Entitlements

Tevenie

Hi, I am sure this has been asked before, but I can't find it.

I have some land in East Galway that belonged to my father. He died in 2010 and the land has been let ever since. I have come back from England and would like take on the farm at the end of the current lease. I can't understand how the entitlement system works.

Am I right in thinking that whoever leased our land in 2013/14/15 would have been allocated entitlements to farm the land which, when they left, they took with them? If I want to get entitlements do I have to buy or lease them? If so how much do they cost (approximately - I realize they vary) and how do I go about buying or leasing them?

I am over 50 - am I right in thinking that I cannot get an allocation from the National Reserve and even if I could I can't get them without a University degree?

Tevenie.

minerleague

Hard to be specific but if your father was farming around 2000 he would have entitlements of his own. Unless they were sold they should still exist. Farmer leasing land should have used them and got paid on them. However if they had their own entitlements your fathers mightn't have have been activated and lost to Irish reserve. So first port of call should be to auctioneer or whoever handled lease to check this.

Tevenie

Thank you. He didn't farm since the 1980s. So I assume they are lost?

minerleague

https://www.boards.ie/discussion/comment/118043581#Comment_118043581

well they were never established in the first place. Was farm leased out around the year 2000? ( 3 year period ) Not too sure about applying to reserve for entitlements of your own, can be done but maybe need green cert, worth doing if you intend farming.

Tevenie

Thanks minerleague.

The farm was leased out in 2000 - it was leased since the 1980s - usually on five year leases.

Can you tell me, roughly, how much entitlements are to buy? I understand it depends on the area.

Hard Knocks

https://www.boards.ie/discussion/comment/118046203#Comment_118046203

Entitlement are nothing to do with area, give Joseph Naughton or HMG a call as they deal in them, we bought some a few years ago at 2.5 times the value

minerleague

https://www.boards.ie/discussion/comment/118046203#Comment_118046203

As hard knocks says about 2.5 times face value. should point out the whole CAP review ( payments and who is eligible ) is due in 2023. How that affects whether bought entitlements will represent value is unknown. Some people with entitlements for sale or lease are holding out until after this date to see what unfolds. At 50 you wont qualify for young farmer topup but someone else might be able to tell you if you can apply to national reserve ( would be free as such to new entrant)

Tevenie

https://www.boards.ie/discussion/comment/118047172#Comment_118047172

I will go away and stop plaguing you soon, I promise! When you say 'face value' where do I find out what the face value is?

minerleague

https://www.boards.ie/discussion/comment/118048448#Comment_118048448

you're grand. Each farmer has entitlements of different value ( based on what enterprises they were farming 20 years ago), average would be 270/hectare.

So whoever is selling will advertise them as worth " x euro / ha " ( this is the face value) Generally higher value entitlements make more than the 2.5 times their value. Most trading would be done through agents ( ads in Farmers journal )

Tevenie

Thanks so much for your patience! It's a steep learning curve...

minerleague

https://www.boards.ie/discussion/comment/118049666#Comment_118049666

Just a small thing, that entitlement is split in 2 parts now - the basic payment and greening. makes no difference at moment but the greening part may be more difficult to get in future ( may have to do more ?). The average of 270 would be 180 basic payment and 90 greening

K.G.

Can anyone tell me what is happening with leased entitlement s going forward.

Bass Reeves

https://www.boards.ie/discussion/comment/118050825#Comment_118050825

The payment will actually be in three parts. Eco/greening. This will be automatically paid and you need no entitlement to draw it down. It is separated from the entitlement.

Your remaining payment will have two parts a basic payment and a CRISS top up on the first 30 units. This means that valuations are meaningless. With convergence bring all payments to a minimum of 85% of the national average it means nearly all payments are worth the same.

It means the variable part of the payment will be between 100-150 by 2027 remaining convergence will follow rapidly after that. IMO the value of entitlement to trade will be in the 2-300 euro/unit only. It will be more advantageous to those who can avail of CRISS to buy units. As well 60k max payment will effect supply as well especially in the short term

Sami23

Looking for some advice.

I have about 10 naked hectares and have been leasing entitlements for them last few years so wondering should I continue to lease them or bite the bullet and try to buy some this year.

Just not sure if this year would be a good or bad year to try to buy them with the CAP reform coming next year.

Lastly, if I was to buy should I go for low or high value entitlements ?

TIA

Bass Reeves

https://www.boards.ie/discussion/comment/118472115#Comment_118472115

It would depend on price if you can buy low value entitlements 150-200/HA for 250-300/ HA I would consider buying. It will also depend if you will still below 30 HA as CRISS cones into play. I would not be paying 3 times total value for payments and I would be wary of buying higher value entitlements. Remember in 2023 you will only be renting the non eco portion and entitlements above 300 euro will be falling sharply on value the higher they are

fiatagri8090

I am thinking of buying entitlements for naked land around the 260 per hectare . Combining these with my existing entitlements my average entitlement value will be around 250 per hectare. I have been leasing entitlements for past few years. Would it be advisable to buy given this and taking convergence into play ?

wrangler

https://www.boards.ie/discussion/comment/118472338#Comment_118472338

If teh ECO portion returns well and you can't get the EC0 without the entitlement, it could surprise you what the entitlement is worth

Bass Reeves

https://www.boards.ie/discussion/comment/118592427#Comment_118592427

Buying entitlements is all about the price you pay. In 2023 you will be entitled to eco on naked land anyway so that should reduce the cost of the entitlement. Remember as well top up ( Bliss) on over 30 HA. You would want to be buying them for 500-550/ unit

https://www.boards.ie/discussion/comment/118594043#Comment_118594043

AFAIK the CAP as passed by the EU Parliament/Comission separated Eco, it cannot be revisited. They even put in a stipulation if ECO was reduced at the start of the 5 year time limit a higher rate had to be paid later in this period.

Eco being separated should pull down entitlement value

Dozer1

I've been leasing them in for a few years now and bit the bullet this year, still not sure I did the right thing but with the price of replacement cattle I thought them a safer bet

wrangler

https://www.boards.ie/discussion/comment/118594295#Comment_118594295

I'd hope to be selling or transferring the land at the end of the lease. It'd be good to be able to hold onto entitlements until then, rent amount isn't important

Box09

The inflationary environment we are living in now just shows how poor the SFP is. Even "high value" entitlements can no longer be considered good. The SFP by not being indexed is going to put many more farmers out of business. It really is a worrying time for farming.