Entitlements

grass10

https://www.boards.ie/discussion/comment/121890350#Comment_121890350

All media reports, strong hints from dept and EU are that all money paid in the future will be linked to a per acre basis through many different schemes but basically the farmer will have to spend money in some bits and pieces in order to qualify for each payment and you'll discover very quickly that it's going to be all about taking land out of production and in return they'll pay you some bit of money many lads renting land long term have very little understanding of what's coming down the tracks very fast just because you got 20000 euro last year in payment that will not mean you'll still get that same money in 4 years time depending on what requirements will be in place for each scheme it will be very possible that it may not pay lads to spend x amount in order to qualify for y amount payment

The days of Mr Big getting 60000 euro per year based on something that happened on his farm 20 years ago are almost finished and rightly so but most farmers are in for some shock in 4 or 5 years time when they realise all the hoops they will have to jump through in order to get a bit of EU money imo it has started already with the way suckler farmers have been treated since last year, try to force them in to bord bia then after they join change all the star ratings and now try and force them to use miniature animals for breeding, acres scheme was a big pr hype last year and then don't pay lads after joining, organics scheme is going to be the same lads will discover payment issues their aswell but you've taken your land out of commercial production to go for the so called soft money but people never think about if the money is delayed or the dept change the rules along the way which they seem to do consistently now

Bass Reeves

https://www.boards.ie/discussion/comment/121892326#Comment_121892326

I think you are wrong. EU commission is coming under pressure to start redirecting money to farmers. The last EU Parliament had a significant green tinge. It is expected that the next one will will be balanced differently.

Politicians take no notice when French farmers protest, the French protest against everything. However there is significant anger building within EU farmers and Rural communities. The imbalance between the power of large retailers and farmers is now becoming a concern.

If food production drops prices will explode. Look at the US beef was always 20-30% behind EU prices 4-5 years ago. Now its 10-20% ahead nearly constantly over 6euro/kg. Australia is starting to become similar.

Qprmeath

Anyone know what kind of demand there is for entitlements? Have some leased out but might consider selling if there’s a demand?

Siamsa Sessions

https://www.boards.ie/discussion/comment/121964589#Comment_121964589

Reports in the media suggest you'd get 2.1 to 2.5 times their value

Danzy

https://www.boards.ie/discussion/comment/121893667#Comment_121893667

You would want to see the Varadkar and Micheal Martin types, the Macrons, Scholz,Merkel generation consigned to the knackery of history before a less hostile to agriculture and rural communities can come through.

The next ones can't be worse, might be no better in many cases.

jfh

hi all, a family member is retiring from farming & i do a bit of work for him, he has offered to transfer his BISS entitlements to me, but i am maxed out. Am i correct in thinking i could lease these out?Thanks

wrangler

https://www.boards.ie/discussion/comment/121996297#Comment_121996297

yes

massey 265

https://www.boards.ie/discussion/comment/121996297#Comment_121996297

Yes .As a rule of thumb entitlements are leased out for the year for 50% of their value and for twice their value if selling them.Remember that the 20% clawback on selling entitlements returns next year,no clawback on selling entitlements this year.

Bass Reeves

https://www.boards.ie/discussion/comment/121996661#Comment_121996661

I think there us a limit on how long you can lease them as well,I might be wrong.

Depending on his relationship to you and the value of the entitlements tgey can transfered as inheritance or as a gift

jfh

thanks for the info lads, just one other question, how long can one lease them out for?

farmqi28

No you won't be able to lease his entitlements out this year but you can put them on to your ground and lease the equivalent amount of yours out. The same entitlement can't be transferred more than once a year. Price around auctioneers also when leasing out.

Seadin

Hi all I am confused with the entitlements and the idea of leasing them out. Maybe someone can break it down for me.

I am hoping to lease one of my farms out to a diary farmer. He is interested. What do lads do with their entitlements of a farm when leasing land? Can you drop the value of leasing the land by like 50% if you want to still keep the entitlements and write that into the agreement? So if the land was €400/acre to lease you drop to €200/acre and still claim the entitlements?

Would some farmers want the entitlements if they are renting from you? What is the best way to do it? Ask for the going rate for renting land and 50% of the value of the entitlements?

I have no experience of this so it's new territory for me.

TIA

pureza

https://www.boards.ie/discussion/comment/122020271#Comment_122020271

Lease the land at the market rate without the entitlements

You can sell them this year if you want for double their value without a clawback

Leasing them brings in about 50% but you keep ownership

Dont drop your land rental price,just get an auctioneer to get you the best price and best renter but at a sustainable rent

On that note,get paid monthly as you'll find out quickly if the farmer cant pay

No point renting if the renter stops paying,hence make the rent sustainable but lol don't halve it

Good loser

Your auctioneer will advise you as to best practice and usual options. Should do.

wrangler

https://www.boards.ie/discussion/comment/122020350#Comment_122020350

Lease the land and the entitlements to the farmer, make it a condition of lease that 100% of the biss comes back to you.

If you don't do it that way you'll have to pay income tax on your income from the entitlements. Income from the entitlements is only tax free if leased with the land. I didn't lease my entitlements with the land and I regret it now, but there wasn't the same demand in 2016, the landlord can make the running now

So if you get 400/acre for the land and 70/acre (or whatever your entitlement is) for the entitlements, it'll be a nice income tax free.

pureza

https://www.boards.ie/discussion/comment/122020529#Comment_122020529

Fair points

I guess the only thing to reiterate is to treat the entitlements as extra on top of the land rental which is making 3 or 400 (round me anyway) without any entitlements at all

wrangler

https://www.boards.ie/discussion/comment/122020547#Comment_122020547

Yea, that's it, I've to give 50% of my entitlements to get someone to draw them and then 50% of the remainder to inland revenues

Seadin

So to be clear if I lease my land and entitlements to an interested farmer, I should be getting back 100% of the BISS payment?

What happens with the ANC CRISS and ECO payment if the farm I'm leasing is under the same herd number as my own farm?

What about the Young farmers payment? How does that work then?

TIA

J.O. Farmer

Your not necessarily entitled to 100% of the BISS only whatever amount you agree with whoever is leasing the entitlements. This could be 100% or it could be less. You may find you get more leasing separately if someone wants land without entitlements so they can draw their own.

You can't lease out the land and claim any of the other schemes on it. Also whoever leases your land may not get them either if they already have enough land to meet the caps on those payments.

You can only claim the YFS if you are farming and claiming BISS either alone or as part of a partnership and meet the qualifying criteria.

Bass Reeves

https://www.boards.ie/discussion/comment/122021638#Comment_122021638

No you should not be. You should get the market rent. If you are getting all the BISS the tenant cannot draw BISS on it for himself tgat is why naked land makes more . ANC and CRISS are area limited. Tenants may be maxed out elsewhere. ECO payments is conditional on certain actions or having environmental features on a farm.

Young farmers payments are there to get a young farmer established. What is going on with renting/leasing of land is starting to be similar to a protection racket.

Depending on the setup, I personally woukd not give more than 120-200/ acre for land and that inudes everything. Lots of lads leasing are busy fools

Seadin

I am farming 40 acres myself but the other farm is a good distance away so I'm deciding to let. Its about 32 acres.

Bass just to ask, if you were paying 120acre surely you would have to allow the owner to get all the entitlements as well as that would be a max payment of €3840 otherwise in my case, (32 acres by €120\acre). Without any entitlements that would be a good €2500 down in payment for that farm before any entitlements come into it. Surely I would just let the land free and draw away the money if I was to lose money to it to the extent of that in letting it at that rate? Not having a go btw Bass just trying to understand your logic at €120/acre?

Thanks to all for the previous responses and info.

minerleague

https://www.boards.ie/discussion/comment/122021896#Comment_122021896

With 40 acres you will get the CRISS yourself ( front loaded ) Think you will get ECO on that 40 acres aswell.

Bass Reeves

https://www.boards.ie/discussion/comment/122021896#Comment_122021896

It would depend on the land quality, fencing and setup. Biss by the end of this CAP will average 160/ unit approx or about 65/ acre.

The lad renting is entitled to a margin as well, too many are busy fools, I do not intend joining them. At giving the owner half the Biss adds 30 onto the rent at 150/ acre on 32 acres its 4.8k/ year, at 200/ acre for decent land with 50% Biss its 230/ acre or 7.35k

Allowing for the tax free status of leasing that equivalent to payments of 8.5k and 13k before tax at the higher rate . Orginally the tax status of leasing was for to encourage leasing but also to reduce costs to farmers.

Since tax free leasing has come in the biggest benefit has been to owners and it has not been beneficial to tenants.

On the young farmer you only get one bite of the cherry fir the national reserve and the top up if in year two you get extra land none of that is available to you.

1848

Normal arrangement is to lease land & BiSS to tenant with BISS repaid. Income from leased land & BiSS is tax free subject to upper limits. Eco scheme is not tax free if returned to owner. Eco scheme payment should be retained by the active farmer.

Donald Trump

https://www.boards.ie/discussion/comment/122020271#Comment_122020271

Very few dairy farmers would be interested in renting your land without the maps.

In theory you might get an arrangement where he buys the grass from your farm, and you import slurry back. Messy though. Especially with new regulations.

grass10

https://www.boards.ie/discussion/comment/122021638#Comment_122021638

You mention that the 2 blocks of land are under the 1 herd number which would be standard but you have to understand that when you let out 1 block that will no longer be operated under your herd number and will be in another farmers biss application also it would be totally unrealistic to expect anybody leasing land to give you back 100% of your biss unless he is either getting the land at a cheap rent or else he doesn't know what he is doing and the big danger with the latter is they often run into financial difficulties also in relation to money you should be looking for full rent up front every year it quickly sorts out the messers

You should strongly consider just selling your biss payment and let your land at a fair rent to a farmer that can actually pay

Hyland17

https://www.boards.ie/discussion/comment/122044330#Comment_122044330

Have yet to see fair prices. With the money being thrown around at the minute its hard to see how lads are making money. Either money from an off farm income or alot of land already under their name hold up the price. Have seen young farmers giving over everything they are getting just to get started. No mention on what happens after lease is over. I've been in that spot and won't do it again. Still no shed and only limping along. Tried to get on another bit of ground and was told I should have more to give from YFS. Its going to put alot of lads out yet before long. Once bitten twice shy and all that. Could come back to haunt landlords

grass10

Fully agree its next to impossible for a young farmer to get going I wonder if a lot of high rents from last year were fully paid not to mention a whole new round of crazy rents this year what are the odds of even half the.lads even paying the full rent A few big farmers with big egos and even bigger EU payments have taken extra land near young farmers where they could have let the young farmer get a chance of getting some extra land and some of these ego lads are drawing the pension with many years

Who2

All the ground around me for letting has been taken by young farmers giving absolutely ridiculous rents all based on the backing of getting entitlements of the national reserve.
the base seems to be set at 350 base for poor ground rising up.
this year it seems to all beef operations taking it too.
the big eu payment argument is dying a death and should be null and void in the next couple of years so I don’t think it’s having much of an effect.
I know of one young lad who drove rents mental in one area, eventually got a farm then headed off for Australia a couple of months later.
The whole system is a joke with too much interference causing most of the issues.

Hyland17

https://www.boards.ie/discussion/comment/122045637#Comment_122045637

When I was chatting to my advisor he was saying in the next round of CAP nothing is certain. Wasn't to sure where entitlements are heading. Could be converged more and given less. Will sting alot of lads giving big money just to say they are farming. Next year or the year after I'm surewe will start to hear a few bits.