Cap reform convergence

wrangler · 07-05-2021 10:42pm

RedDevil55 wrote: »

How did that work for the last cap do you mind me asking. How much did the purchaser pay for the entitlements?

We're leasing some entitlements currently.

About twice the face value I think

Western Pomise · 08-05-2021 10:41am

Is it likely that stocking numbers will be taken into account rather than hectares farmed in deciding new CAP payments?
Through circumstances out of my control I had to reduce sheep numbers by 70% this year so have a far lower number on this years Census than last few years.
Would screw me if they decided to pick this year or and average over last few years to work out your payments under the new CAP.
Interested in people’s thoughts on likelihood of there being a ‘reference years’ type scenario in the new CAP?

Dinzee Conlee · 08-05-2021 10:45am

Western Pomise wrote: »

Is it likely that stocking numbers will be taken into account rather than hectares farmed in deciding new CAP payments?
Through circumstances out of my control I had to reduce sheep numbers by 70% this year so have a far lower number on this years Census than last few years.
Would screw me if they decided to pick this year or and average over last few years to work out your payments under the new CAP.
Interested in people’s thoughts on likelihood of there being a ‘reference years’ type scenario in the new CAP?

Extremely doubtful they would return to a production based model in my opinion...
But, that’s just an opinion, which means nothing really

morphy87 · 08-05-2021 11:32am

What way will payments work for someone new starting off next year that never drew money? Will they just get the average payment and if so how much is it? I think it’s 100 an acre

wrangler · 08-05-2021 11:40am

morphy87 wrote: »

What way will payments work for someone new starting off next year that never drew money? Will they just get the average payment and if so how much is it? I think it’s 100 an acre

The budget is very much reduced so unlikely to be the same average as now also there's proposal that some will be paid out as environmental payment, so I could see the greening being a seperate payment to be paid on completion of tasks. leaving otu the greening will reduce it by 25%ish .
I could see the average being €60 or €70 /acre so

MIKEKC · 08-05-2021 12:47pm

Western Pomise wrote: »

Is it likely that stocking numbers will be taken into account rather than hectares farmed in deciding new CAP payments?
Through circumstances out of my control I had to reduce sheep numbers by 70% this year so have a far lower number on this years Census than last few years.
Would screw me if they decided to pick this year or and average over last few years to work out your payments under the new CAP.
Interested in people’s thoughts on likelihood of there being a ‘reference years’ type scenario in the new CAP?

Why would you think that it would revert to stock numbers?. The pressure is on to cut stock ? Very doubtful I would think.

morphy87 · 08-05-2021 1:10pm

wrangler wrote: »

The budget is very much reduced so unlikely to be the same average as now also there's proposal that some will be paid out as environmental payment, so I could see the greening being a seperate payment to be paid on completion of tasks. leaving otu the greening will reduce it by 25%ish .
I could see the average being €60 or €70 /acre so

So possibly when greening is added it could be up around the 100? How would greening work in conjunction with reps?

08-05-2021 1:32pm

morphy87 wrote: »

So possibly when greening is added it could be up around the 100? How would greening work in conjunction with reps?

It won't be Greening, that's history. It'll be a repurposed payment called the Eco Scheme. You will likely have to either incur costs or losses to meet the requirements of the Eco Scheme. Until all the details about that comes out the answer is "It depends".

morphy87 · 08-05-2021 3:41pm

So at the moment if a new entrant,young farmer, went in with no payments I think they get 100 an acre and a top up of 25 for a five year scheme, so if eligible would this be a better option to go for next year? These figures were given to me by an advisor

Dinzee Conlee · 08-05-2021 3:45pm

morphy87 wrote: »

So at the moment if a new entrant,young farmer, went in with no payments I think they get 100 an acre and a top up of 25 for a five year scheme, so if eligible would this be a better option to go for next year? These figures were given to me by an advisor

Do you or did you apply to the national reserve for these?
Does that have to be done by SFP submission date?

morphy87 · 08-05-2021 3:52pm

Dinzee Conlee wrote: »

Do you or did you apply to the national reserve for these?
Does that have to be done by SFP submission date?

Yes it has to be done by SFP date, no I didn’t apply as I will still be eligible for a few years yet, but I will apply next year before it changes, I was told once your in the scheme it has to be honored for the 5 years, that’s what my advisor told me

wrangler · 08-05-2021 3:52pm

Dinzee Conlee wrote: »

Do you or did you apply to the national reserve for these?
Does that have to be done by SFP submission date?

Says here the 17may

https://www.agriland.ie/farming-news/applications-to-national-reserve-2021-to-open-in-february/

morphy87 · 08-05-2021 4:10pm

wrangler wrote: »

Says here the 17may

https://www.agriland.ie/farming-news/applications-to-national-reserve-2021-to-open-in-february/

You seem to be very up to date with these schemes, would I be correct in what I am saying? Do you think going into the scheme I mentioned would be a better move than waiting for the new cap?

mayota · 08-05-2021 4:19pm

morphy87 wrote: »

You seem to be very up to date with these schemes, would I be correct in what I am saying? Do you think going into the scheme I mentioned would be a better move than waiting for the new cap?

Why do you think you’d be entitled to anything in the new CAP? There might not be a national reserve available.

Dinzee Conlee · 08-05-2021 4:31pm

morphy87 wrote: »

You seem to be very up to date with these schemes, would I be correct in what I am saying? Do you think going into the scheme I mentioned would be a better move than waiting for the new cap?

I don’t understand - why would you wait?

Surely you would have been better off applying this year and getting paid sooner than hanging on year after year to see if there might be a better payment?

Like, even if it was a worse payment applying now - at least applying now means you’re in the system getting a payment, and should continue to get a payment vs nothing by not applying...

I’m confused by your approach...

RedDevil55 · 08-05-2021 5:04pm

wrangler wrote: »

About twice the face value I think

Would the face value be excluding or including any greening/eco-scheme premium?

wrangler · 08-05-2021 5:12pm

--

RedDevil55 wrote: »

Would the face value be excluding or including any greening/eco-scheme premium?

Including greening
High entitlements the last time were making 2.5 +times and low were making under 2 times from what I cn remember
Buying entitlements is the same as buying land, you have to pay for them from after tax profits, they cannot be claimed for tax relief

morphy87 · 08-05-2021 5:16pm

mayota wrote: »

Why do you think you’d be entitled to anything in the new CAP? There might not be a national reserve available.

Well considering there is so much talk about active farmers I presume an active farmer will be getting something hopefully, whatever it will be

morphy87 · 08-05-2021 5:20pm

Dinzee Conlee wrote: »

I don’t understand - why would you wait?

Surely you would have been better off applying this year and getting paid sooner than hanging on year after year to see if there might be a better payment?

Like, even if it was a worse payment applying now - at least applying now means you’re in the system getting a payment, and should continue to get a payment vs nothing by not applying...

I’m confused by your approach...

We are getting payments all right but the reason for waiting to transfer the payments to me is that I am taking on extra land next year that is naked so this will be eligible for the young farmers scheme, so if I joined the young farmers scheme say this year I couldn’t add this parcel next year

wrangler · 08-05-2021 5:32pm

morphy87 wrote: »

You seem to be very up to date with these schemes, would I be correct in what I am saying? Do you think going into the scheme I mentioned would be a better move than waiting for the new cap?

No i'm not up to date, I used to be in IFA at national level, I'm just telling you what I remember from 2013 when I could've nearly wrote the book.
Like any market, no one could forecast what entitlements will be worth in two years time

J.O. Farmer · 08-05-2021 9:40pm

morphy87 wrote: »

We are getting payments all right but the reason for waiting to transfer the payments to me is that I am taking on extra land next year that is naked so this will be eligible for the young farmers scheme, so if I joined the young farmers scheme say this year I couldn’t add this parcel next year

Naked land is no good unless looking to the NR. I don't know if you can do that for extra entitlements. You can get new ones where you've none or existing ones brought up to the national average.

The top up is on whatever entitlements you claim each year but you need the land to claim them.

Donald Trump · 08-05-2021 9:49pm

wrangler wrote: »

I was drawing €900/ha inc REPS for a while, it helped concentrate the mind I can tell you.
Last reform, dept took your payment and spread it over what ever you applied for in the first year so anyone that doubled their acreage since decoupling halved their entitlement value and if it was under the national average convergence click in and increased their entitlement value.
Some farmers with high values then brought it a stage further and sold most of their entitlements so their payment was small and convergence has brought them up now too even though they sold entitlements worth over a thousand each, sold at 2-3 times their value.
If that is the way it's done this time and some dairy farmers even trebling their land base, they will benefit hugely from convergence at the expense of small suckler farmers whose payments are being decimated due to convergence

Well the other side of that coin is that there is nothing stopping that suckler lad with the healthy BPS payment, from building a parlour and buying a few cows himself! The lad who was always dairying probably has a relatively low BPS. The recent newcomer to it is probably bringing a healthy one with him!

morphy87 · 08-05-2021 9:51pm

J.O. Farmer wrote: »

Naked land is no good unless looking to the NR. I don't know if you can do that for extra entitlements. You can get new ones where you've none or existing ones brought up to the national average.

The top up is on whatever entitlements you claim each year but you need the land to claim them.

Our payments are very small,so if I went in as a new entrant with no payments would I be entitled to the national average plus the top up for the young farmers scheme? I would like as much feedback on this as possible as it seems a vague area,

Donald Trump · 08-05-2021 9:52pm

morphy87 wrote: »

Our payments are very small,so if I went in as a new entrant with no payments would I be entitled to the national average plus the top up for the young farmers scheme? I would like as much feedback on this as possible as it seems a vague area,

As long as you satisfy the conditions - age and qualifications I think - and do your paperwork correctly, then you should get them from what I understand

morphy87 · 08-05-2021 10:09pm

Donald Trump wrote: »

As long as you satisfy the conditions - age and qualifications I think - and do your paperwork correctly, then you should get them from what I understand

So if I took over with no payments, I should then get the average plus the top up which would come to 125 an acre I think? I presume if I went in next year before the cap changes I would be ok for 5 years as the scheme is for 5 years

Donald Trump · 08-05-2021 10:21pm

morphy87 wrote: »

So if I took over with no payments, I should then get the average plus the top up which would come to 125 an acre I think? I presume if I went in next year before the cap changes I would be ok for 5 years as the scheme is for 5 years

My understanding is that as long as you have naked land, you can establish entitlements on it. You would get one per hectare submitted from the national reserve at the national average rate - whatever that is. Then you'd also get the YFS 25% top up for up to 5 years I think.

Don't take my word as gospel though - just as a starting point in your own research

alps · 09-05-2021 12:48am

wrangler wrote: »

I was drawing €900/ha inc REPS for a while, it helped concentrate the mind I can tell you.
Last reform, dept took your payment and spread it over what ever you applied for in the first year so anyone that doubled their acreage since decoupling halved their entitlement value and if it was under the national average convergence click in and increased their entitlement value.
Some farmers with high values then brought it a stage further and sold most of their entitlements so their payment was small and convergence has brought them up now too even though they sold entitlements worth over a thousand each, sold at 2-3 times their value.
If that is the way it's done this time and some dairy farmers even trebling their land base, they will benefit hugely from convergence at the expense of small suckler farmers whose payments are being decimated due to convergence

Most likely that the dairy farmer who has trebled his land base, is drawing the current payment and giving it back in total to the landowner. Many leases have actually factored in that the leasing of the entitlements may not continue, and there are clauses within that if that eventuality occurs, the lease price changes to ag value plus what the new payment to the active farmer represents...

Well covered off by those who got good advise..

wrangler · 09-05-2021 7:40am

alps wrote: »

Most likely that the dairy farmer who has trebled his land base, is drawing the current payment and giving it back in total to the landowner. Many leases have actually factored in that the leasing of the entitlements may not continue, and there are clauses within that if that eventuality occurs, the lease price changes to ag value plus what the new payment to the active farmer represents...

Well covered off by those who got good advise..

Yea I missed a trick there , I knew i could do it alright but at my age it's not going to make a lot of difference. forfeiting the entitlements aren't a big deal.
I expected the tenant taht's using mine to end up with them.
Have a pension still to cash in which'll take the sting out of it

Dinzee Conlee · 09-05-2021 7:51am

alps wrote: »

Most likely that the dairy farmer who has trebled his land base, is drawing the current payment and giving it back in total to the landowner. Many leases have actually factored in that the leasing of the entitlements may not continue, and there are clauses within that if that eventuality occurs, the lease price changes to ag value plus what the new payment to the active farmer represents...

Well covered off by those who got good advise..

Do many leases have this?

It doesn’t affect me, but would have thought this was going a bit too far? And it would only cover a few years til the lease was up and then in a new lease the entitlements are the property of the farmer who leased the land...

I don’t know, not sure I agree with it...

wrangler · 09-05-2021 7:55am

Dinzee Conlee wrote: »

Do many leases have this?

It doesn’t affect me, but would have thought this was going a bit too far? And it would only cover a few years til the lease was up and then in a new lease the entitlements are the property of the farmer who leased the land...

I don’t know, not sure I agree with it...

That was my thoughts too, if they mind my land and get an advantage out of the change. well best of luck to them.

Cap reform convergence

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