1 bernadette brennan
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description
Peter Young's slides from the Farmers Journal CAP meetings. With the key decisions on CAP reforms now in place, how the new system will work is becoming clear. In this series of CAP meetings, the Irish Farmers Journal is aiming to provide farmers with information on all aspects of CAP and how it will impact your direct payments for the next six years.
Transcript of 1 bernadette brennan
1. Progress to date2. Features of new Direct Payments scheme3. Basic Payments scheme4. Calculation of number + value entitlements5. Internal convergence6. Transfer of Entitlements7. Private Contract Clause8. Young Farmer Scheme9. National Reserve10. Greening
June 2013: EU Agreement
July 2013: Consultation process
Schemes to be implemented Conditions of each scheme Model of Convergence under Basic Payment
Scheme
January 2014: Shape of Direct Payments
All existing entitlements expire 31 December 2014
Final Year of Single Payment Scheme 2014
Ireland will also implement:
◦ Greening◦ Young Farmers Scheme◦ Coupled Support for Protein Crops (rate to be decided)
◦ National Reserve
Single Payment Scheme
Basic Payment Schemereplaced by
National Reserve
*minor adjustments to allow for Protein Support
Scheme% National
CeilingAmount
Greening 30% €364,500,900.00
Young Farmers Scheme 2% €24,300,060.00
Balance 68% €826,202,040.00
National Reserve 3% of Balance(first year only)
€24,786,061.20
2015 Basic Payment Scheme
€801,415,978.8
*Approximately 60% of 2014 SPS ceiling carried forward to 2015
Similarities Differences
Uses entitlements
Annual application process
Declare eligible land
One hectare per entitlement
Entitlements transferrable
Establishment of National Reserve
Entitlements subject to convergence: value will change from year to year
No Consolidation
No ‘rotation’ of entitlements
Entitlements allocated to ‘active farmers’ only
‘Definition of Active Farmer’
1. Farmer: rearing, growing, harvesting, milking, keeping animals or
2. Maintaining land in good agricultural and environmental condition or
3. Minimum Activity on marginal land (* to be defined)
‘Definition of Active Farmer’
1. Farmer: rearing, growing, harvesting, milking, keeping animals or
2. Maintaining land in good agricultural and environmental condition or
3. Minimum Activity on marginal land (* to be defined)
Other Categories to establish allocation right.
2013 ‘Gateway’ Clause farmers who receive a direct payment in 2013 (single payment scheme,
grassland sheep scheme, Burren Life, or Beef Data Programme) have an automatic ‘allocation right’
Scottish Derogation(Non-Entitlement Holder)
Never held entitlements (owned or leased) including in 2014
actively farming in 2013
Evidence of production in 2013
Objective criteria will be applied
Fruit and Vegetable Growers
No ‘allocation right’
produced fruit or vegetables in 2013
Minimum area may apply
National Reserve
Priority given to;
Young Farmers
New Entrants to farming
(see National Reserve)
Number of eligible hectares declared in
2013 or 2015whichever is lower
2015 Number of Entitlements
Additional land in 2014 or 2015 will have no impact on number of entitlements
Less land in 2015 compared to 2013 will reduce number of entitlements
Allocation Right
15 May 2013
15 May 2014
15 May 2015
Allocation Right1st Land
Reference
Value
2nd Land Reference
50 hectares
50 hectares
No. Of Entitlements = 50
Allocation Right15 May 2013
15 May 2014
15 May 2015
Allocation Right1st Land
Reference
Value
2nd Land Reference
50 hectares
40 hectares
No. Of Entitlements = 40
Allocation Right15 May 2013
15 May 2014
15 May 2015
Allocation Right1st Land
Reference
Value
2nd Land Reference
50 hectares
60 hectares
No. Of Entitlements = 50
Fixed Percentage of 2014 Value of Entitlements Owned* (and GLS)
Total Value in 2015
€9,000 (SPS Entitlements) + €1,000 (GLS)
€10,000 x 60% = €6,000
All farmers allocated an Initial Unit Value in 2015
Total Value of Entitlements (€6000) Initial Unit ValueNumber of Entitlements (50) (€120)
Status in 2013 Buy Entitlements in 2014?
Comments
2013 Allocation right(SPS, GLS, Burren, BDP)
Optional Will increase Initial Unit Value: increases impact of convergence; could cover surplus land
Scottish Derogation(Non-entitlement holder)
No To hold entitlements in 2014 would disqualify from allocation in 2015
Fruit and vegetable Optional Would give a 2014 ‘value’ if none held
YF or NE with allocation right
Optional But would reduce/negate allocation from Reserve
YF or NE with no allocation right
No Entitlements would not carry forward
National Average 90% National Average
Minimum Value of 60%◦ (by 2019)
(Transfer of €103m)
High Initial Unit Value
Low Initial Unit Value
The value of entitlements changes from year to year
€60
€170.87
€153.79
€93.79/3 = 31.26
€102.52
By 2019, all low value entitlements must reach at least 60% of national average entitlement value (estimate of €102.52)
2019 BPS ceiling National Average 2015 Eligible hectares (estimated €170.87)
Cannot be calculated until 2015
In 2019 no farmer will receive payment per hectare (BPS & Greening) over €700 per hectare (max. of €481 per entitlement)
• *National average = €170.87 (€248.58 with Greening) (2019 BPS ceiling/2015 hectares)
• 90% National average = €153.79 (€223.74 with Greening)
• 60% National average = €102.52 (€149.15 with Greening)
Farmer A (low value)
Farmer B (high value)
2014 Unit Value €80.00 €700.00
Initial Unit Value
€47.54 €415.94
2015 Value €58.53 (€85.15) €397.46 (€578.23)
2016 Value €69.53 (€101.15) €377.64 (€549.38)
2017 Value €80.53 (€117.16) €357.77 (€520.52)
2018 Value €91.53 (€133.16) €338.93 (€496.11)
2019 Value €102.52 (€149.16) €320.09 (€465.69)
*National average is estimated
No ‘rotation’ of usage; entitlements will revert if unused for two consecutive years
2015: restricted to inheritance, gift, merger, scission, admin transfer
sale and lease by PCC. Submitted by closing date 2015 No trading of new entitlements in
2015 by sale or lease
From 2016
Entitlements transferrable
Includes transfer by lease ‘with or without land’
No ‘clawback’ on transfers
Event Land Process
Inheritance With land Step into shoes
Gift With land Step into shoes
Admin Transfer With/without land Step into shoes
Partnership At least one party with land
No impact on number and value
Change of legal entity
At least one party with land
No impact on number and value
Scission At least one party with land
No impact on number and value
Sale (after 15 May 2014)
With land Private Contract Clause
Lease With land Private Contract Clause1. ‘Allocation right’ and ‘land reference’ accompany the land
2. ‘Value’ accompanies the entitlements
The Transferor The Transferee
Must hold Allocation right◦ and
Must be ‘active farmer’ in 2015◦ and
Must apply for and establish entitlements in 2015◦ and
(to fulfill these criteria should retain at least one hectare and one entitlements)
Must be ‘active farmer’ and
Must submit a BPS application in 2015 and declare land
and
Must submit a PCC application (with lessor)
The Problem The Solution
Owner must hold ‘allocation right’ and must establish entitlements in 2015
100% lessors in 2013; no ‘allocation right
Value of entitlements leased out in 2014 may only assigned to owner (lessor) as only definitively held entitlements may be used for calculation of unit value.
Neither lessor nor lessee can carry forward value
Danger of loss of value of entitlements
Entitlements should be transferred permanently in 2014
Ideally to existing lessee who holds the land
Or to any person with an allocation right
Requires agreement of both parties to existing lease
Letters will issue to all farmers affected next week.
‘Young farmer’ status
Eligibility for;
National Reserve
Young Farmers Scheme
Aged 40 or less in first year of BPS application
Established holding within previous 5 years
Agricultural Qualification (FETAC Level 6)
Groups Conditions
Joint herdnumber
Partnership
Company
At least one person must meet definition of ‘young farmer’
Must declare that effective control of decision making power lies with young farmer – declaration on application form
‘Five years’ dates from when young farmer takes such control.
Payment ceases when young farmer no longer in control
Scheme details The Payment
Additional payment for young farmers
maximum of five years of payment
‘Five years’ dates from set-up of holding by young person
(2015 is optimum year for establishing)
Legal entity eligible for payment if meets definition of ‘young farmer’
25% of national average payment per hectare
Payment on maximum of 50 entitlements
Details Reserve Uses Allocation to ‘Active farmers’
Funded by 3% of BPS ceiling in 2015
Replenished from unused entitlements
May allocate new entitlements or give ‘top-up’ to existing entitlements
Allocation based on BPS national average for year of allocation
Priority for;
1. Young Farmers (as defined under YFS)
2. New Entrants
commencing in 2013 or later
Must apply to BPS within two years of commencing
Agricultural qualification at FETAC level 6
Other criteria, e.g. Off-farm income and a limit.
All farmers subject to greening
Crop Diversification Permanent grassland Ecological focus area (EFA)
Arable hectares Minimum Number of
Crops
Percentage
Less than 10 ha No obligation
10 to 30 ha 2 Main crop not more than 75% of arable land
More than 30 ha 3 Main crop not more than 75%Two main crops not more than 95%
Definition of ‘Crop’ includes;
land lying fallow grasses or other herbaceous forage Winter crop Spring crop
National level Farmer Level
Managed at national level
Ratio of permanent grassland shall not decrease by more than 5% compared with 2012
Protection of grassland in
areas covered by Directives on Natural Habitats and Wild Birds
Conversion to forestry exempted
If 5% ratio breached, MS shall oblige farmers to reconvert land back to grassland
Fallow Terraces Landscape features (including
features adjacent to arable land) e.g. hedges, ditches, ponds, trees in line or group, etc.)
Buffer strips (including strips adjacent to arable land)
Agro-forestry Afforested areas Catch crops or green cover Areas with Nitrogen fixing crop
Weighting and Conversion Matrix
e.g. 1sq meter hedge = 10sq meters for EFA purposes
15 ha arable land (37.06 acres)
5% of arable allocated to EFA
(2017 review: possible 7%)
75% of eligible land is grassland, used for production of grasses or other herbaecous forage or fallow land, provided remaining arable land not more than 30 ha.
75% of arable land is used for production of grasses or other herbaceous forage or fallow land, provided remaining arable land not more than 30 hectares
Land farmed organically
