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in billion EUR -current prices
Export refunds Other market support M arket-related expenditure Coupled direct aids
Decoupled direct aids Direct aids Rural developm ent
EU-10
EU-12
EU-15
EU-25
EU-27
EU-28
2014
All existing entitlements expire 31 December 2014
Ireland‟s Net National Ceiling reduced from €
1.255 Billion to
1.216
Billion
a decrease of 3.15%
Total value of entitlements decreased from
1.34 Billion to
1.216
Billion
a decrease of 9.27%
Modulation deduction on amounts in excess of
5,000 no longer
applies
A linear reduction (10.49%) will apply to entitlements of greater value
than
5,585.97 to bring their total value into line with 2014 ceiling
Final Year of Single Payment Scheme
Farmers who claimed
5,000 or less under the 2013 SPS
Scheme are eligible for exemption
However, exemption only applies to activated entitlements
Example: A farmer with
5,000 who claimed
4,500 in 2013.
no linear deduction on
4,500 but will
there will be a
reduction on
500 worth of entitlements.
Leased out entitlements will be based on the position of the
lessee in 2013
claimed more or less than
5,000
Many smaller-scale farmers will have two sets of entitlements
for the first time in 2014
no change in number of
entitlements.
A linear reduction (10.49%) will apply to entitlements of greater
value than
5,585.97
A pro rata reduction will apply for entitlements between
5,000 and
5,585.97
No reduction to entitlements less than
5,000 (if all used)
The full reduction will apply to all entitlements leased out even
where these are less than
5,000
Entitlements could have 2 sets of values
Band
Gross Payment
Claim
Exemption to
Linear Cut
Applicable
Action
No
SPS
No claim
No
All entitlements subject to
linear cut
1
0 -
5000
Yes
All utilised ents exempt from
linear cut:
all non-utilised ents subject to
linear cut
2
5000.01 -
5586
Limited
Partial exemption for all
utilised ents;
all non-utilised ents subject to
linear cut
3
>
5586
No
All entitlements subject to
linear cut
• All unused entitlements in 2013 are subject to linear cut
• Exemption where gross payment claim is €5000 or less
• Exemption applies to utilised entitlements only
No other significant changes in 2014
Article 68 Schemes;
Beef Data Programme (
9 million), BFCP
(
1 million) and Grassland Sheep Scheme (
15 million)
no
modulation applies.
On-line applications opened 6
th
March
Maps send to farmers this week
Paper applications available in about 2 weeks
Pre-print details of temporary grassland
Years 1 to Year 4
required for greening
.
NB Take care when calculating your EFA‟s
G1
Tillage 2012; Grass 2013
G2
Tillage 2011; Grass 2012 and 2013
G3
Tillage 2010; Grass 2011, 2012 and 2013
G4
Tillage 2009; Grass 2010, 2011, 2012 and 2013
Ireland will also implement the following measures:
Greening Payment
Young Farmers Top-Up
National Reserve
Coupled Aid for Protein Crops
Single Payment Scheme
Basic Payment Scheme
replaced by
Similarities
Differences
Uses entitlements
Annual application
Declare eligible land
One hectare per entitlement
Entitlements transferrable
Establishment of National
Reserve
Entitlements subject to
convergence: value will change
from year to year.
Will not apply to unit values
between 90% and average
No Consolidation
(NB Watch
decisions in 2014 and esp in
2015)
No „rotation‟ of entitlements
(Important change)
Other Options
2013 „Gateway‟ Clause
farmers who receive a direct payment in 2013 (single payment, grassland sheep
scheme, Burren Life, BDP) have an automatic
„allocation right‟
Must be active farmer in 2015
Non-Entitlement Holder
(Scottish derogation)
Never held entitlements
(owned or leased)
including in 2014
actively farming in 2013
Important for lessors
before (2013) considering
returning to farming
Fruit and Vegetable
Growers
No ‘allocation right’
produced fruit or
vegetables or potatoes
in 2013
National Reserve
Priority given to;
Young Farmers
New Entrants to farming
(see National Reserve)
Number of eligible hectares
declared in 2013 or 2015
(whichever is lower)
2015 Number of Entitlements
Additional land acquired in 2014 or 2015 will have no impact on number of entitlements
Less land in 2015 compared to 2013 will reduce number of entitlements
value of each
entitlements will increase
Option for farmers renting/leasing land to make medium to longer-term decisions
(Consider land available to you for following 5 years; buffer for future years)
2015 Land for New Entrants
payments under 2014 Grassland Sheep Scheme
(
15 million
no modulation)
will be integrated into calculation for farmers
concerned
„Value of entitlements‟
owned in 2014
Percentage of 2014 Value
Value in 2015
2014
Value
SPS & GSC
2013/2015 (lower)
Land = No. of
entitlements
2013 Direct Payment
(SPS, GLS, BDP, Burren)
Allocation right
No „production‟ reference year
Land Reference: Decrease
Allocation Right
15 May 2013
15 May 2014
15 May 2015
Allocation Right
1
st
Land
Reference
Value
2
nd
Land
Reference
50 hectares
40 hectares
No. Of Entitlements = 40
Land Reference: Increase
Allocation Right
15 May 2013
15 May 2014
15 May 2015
Allocation Right
1
st
Land
Reference
Value
2
nd
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
Initial Unit Value
Number of Entitlements
Now fixed for most farmers
2013 eligible land and 2014
owned entitlements
All Entitlements must be “definitively held in 2014”
100% leased entitlements - All Leased entitlements lost to Lessor AND
Lessee
Transfer to lessee by sale / gift?
Farmers Retiring in 2014?
must transfer to successor
Private Contract Clause for Leases
The Problem
The Solution
Danger of loss of value as
outlined below;
Value of entitlements leased
out in 2014 assigned to owner
(lessor)
Owner must hold „allocation
right‟
and must establish
entitlements in 2015
100% lessors in 2013; no
„allocation right‟
Neither lessor nor lessee can
carry forward value
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.
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)
High Initial Unit Value
Low Initial Unit Value
The value of entitlements changes from year to year
By 2019, all low value entitlements must reach at
least 60% of national average entitlement value
% of 2019 national ceiling
National Average
2015 number of entitlements
allocated
Cannot be calculated until 2015 processing
concluded
By 2019 no farmer will receive payment per hectare
(BPS & Greening) over
700 per hectare
National average *
90% national average *
60% National average *
*
Based on 2012 data using payment
figures
171.00
153.90
102.50
Entitlements transferrable
Includes transfer by lease
„without land‟
No „rotation‟ of usage; will
revert if unused for two
consecutive years
short time
span
No „clawback‟ on transfers
The Transition Period
15 May 2013
15 May 2014
15 May 2015
Allocation Right
1
st
Land
Reference
Value
2
nd
Land
Reference
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 Clause
1. ‘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)
Does the Lessor have a 2013 Allocation
Right?
YES
Will the Lessor apply for allocation of
entitlements in 2015 ?, i.e. retains some
land/ents, will be "active in 2015, will
submit 2015 BPS Application
YES
This
Lessor can enter a PCC covering the lease of
part of his holding where:
* Lease entered into before 15th May 2013, or
*Lease entered into between 15th May 2013 and
15th May 2015
In each case the lease must extend beyongd15th
May 2015.
The Lessee must be "active" in 2015 and declared
the hectares covered by the PCC on the 2015 BPS
form.
NO
- Farmer wishes to
lease out entire holding
.
A PCC is not possible. The lessor must be
"active" in 2015, retain some land and
submit a
valid 2015 BPS Application
(be
allocated entitlements in 2015 in his
own right).
NO
A PCC is not possible.
100% Leased out
farmers in this scenario.
Only option is to definitively transfer
entitlements to a farmer with an allocation
right.
Will the sale occur after 15th
May 2014?
YES
Does the Seller have a
2013 Allocation Right?
YES
Will the Seller apply for allocation of
entitlements in 2015 ?, i.e. retains
some land/ents, will be "active in
2015, will submit 2015 BPS Application
YES
This
Seller can enter a PCC covering the
sale of part of his holding.
The Buyer must be "active" in 2015 and
declared the hectares covered by the
PCC on the 2015 BPS form
NO
- Farmer
wishes to sell
entire holding
.
A PCC is not possible. The Seller must be
"active" in 2015, retain some land and
submit a
valid 2015 BPS Application
(be
allocated entitlements in 2015 in his own
right).
NO
A PCC is not possible.
Only option is to definitively
transfer entitltmeents to a
farmer with an allocation right.
NO
For a sale occurring before the 15th
May 2014, a PCC cannot be entered
into. For the BUYER the
entitlements purchased will be
brought forward to 2015 but the
extra land will not be taken into
account and will remain free of
entitlements.
Lease commenced prior to 2013 and continues to 2016 or
later
Lessor holds „allocation right‟ and establishes entitlements in
2015: lessee „active‟ in 2015
Eligible to enter into PCC agreement to continue leasing
arrangement
entitlements established in account of lessor
value and convergence path dependent on lessor‟s reference
points (land & 2014 value)
Land transferred to buyer before closing date for 2015
PCC submitted; land and corresponding BPS entitlements
transferred to buyer
Seller holds „allocation right‟ and establishes entitlements in
2015; buyer „active‟ in 2015
entitlements established in account of seller and then
transferred to buyer
value and convergence path dependent on seller‟s reference
points (land & 2014 value)
Land and SPS Entitlements transferred to buyer in
March 2014
Value of entitlements will carry forward to buyer‟s
„value‟ in 2015
Land will not be taken into account in 2015 for buyer
(or the seller) (due to lesser of 2013/2015 rule)
PCC not recommended in this scenario
All farmers subject
to „greening‟
Crop Diversification
Permanent grassland
Ecological focus area
(EFA)
Payment calculated
as percentage of BPS
payment
Under 10ha of Arable
(Includes area under arable)
Between 10 ha- 30 ha of
Arable Land
Over 30ha of Arable Land
Exempt
2 Crops
3 Crops
Exemptions
Organic Farmers
75% of eligible area is permanent or temporary grass (max
30 ha of arable land)
75% of the arable land is temporary grassland and lands
lying fallow (max 30 ha of arable land)
50% of arable land was not declared in a previous year by
applicant
all arable land must be cultivated by a different
crop
Similar exemptions bar third indent apply to EFA‟s
Definition of separate crops means
Different Crops
Winter and Spring Barley = two crops
Land lying fallow
Temporary Grassland
Note: each hectare can only be counted once in a scheme year
Main Crop
not more than 75% - this applies to
both 2 and 3 crop requirements
Two main crops
not more than 95%
Mixed cropping regarded as one crop
Landscape features that form part of the eligible
area can
be taken into account in the
measurement of areas of separate crops.
Land, which is used for grass production for five
years or more
No ban on ploughing and reseeding
2012 is reference year
updated to 2015
Ban on ploughing and reseeding and for
production of arable crops of certain Natura
2000 area
Ban applies to permanent grassland in these
areas
Farmers with 15 ha or less of arable land exempt
Farmers with more than 15 ha of arable land
(including temporary grassland)
must ensure
that at least 5% of their arable land is an
ecological focus area
– known as EFA‟s
Areas includes temporary grassland but excludes
permanent grassland with the exception of
buffer strips and landscape features, which can
be declared as EFA‟s
Also includes afforested areas (SPS eligible) and
Short rotation Coppice in establishment of 15 ha
Types of EFA
Land lying fallow
Landscape features
including those situated
adjacent to arable land
Buffer Strips
including buffer strips situated in
permanent grassland
Short Rotation Coppice
no use of mineral
fertiliser and/or plant protection products
Eligible SPS Afforested Areas
TYPES OF EFA
Areas of catch crops or green cover
Areas of nitrogen fixing crops
Field margins
no agricultural production
Ponds
maximum of 0.1 ha
Ditches
- maximum width of 6 meters
(including watercourses)
Traditional stonewalls
Farmers with 80% of the holdings in same region
Farmers with 80% of the holding within a
maximum radius of 15 kilometres
Contiguous EFA area‟s required
Members must have at least 50% of EFA area on
their own holding
Features
Conversion
Factor
Weighting
Factor
Ecological Focus
Area
Hedges /wooded strips (per
1m)
5
1.5
7.5 m
2
Trees in line (per 1m)
5
1.5
7.5 m
2
Field margin (per 1 m)
6
1.5
9 m
2
Ditches (per 1 m)
3
1
3 m
2
Buffer Strips (per1m)
6
1.5
9 m
2
SPS Eligible Afforested
Areas
N.A
0.3
0.3 m
2
Areas with catch crops or
green cover (per 1m
2
)
N.A
0.3*
0.3 m
2
Areas with nitrogen fixing
crops (per 1m
2
)
N.A
0.3*
0.3 m
2
*under discussion
Crop Diversification - Examples
Crop Rotation
Winter Soil Cover
Catch Crops
Numbers of farmers with
15 ha or more:
6,647
Total Arable Area
320,618 ha
EFA
16,030 ha
Average size of holding
48.23 ha
Average EFA
2.41 ha
Scheme details
Who is Eligible?
Top-up on BPS payment for
young farmers
maximum of five years of
payment
„Five years‟ dates from set
-up
of holding
(2015 is optimum year for establishing)
Payment on maximum of 50
entitlements
25% of national average
payment per hectare
Aged 40 or less in first year of BPS
application
Established holding within
previous 5 years
Agricultural Qualification (FETAC
Level 6)
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
Linear Reduction 2014
10.49
Entitlement Value
2013
No
Used
Total Value 2013
Linear Reduction
2014
Purchase of Entitlements
120
55
55
6,600
107
Number
0
Income from New Ent only
0
0
0
Net Unit
0
Income from Current Ent
only
5,908
Total Income post Purchase
5,908
0
0
55
55
6,600
5,908
Sale of Entitlements
2013 Area
55
Number
0
Loss of Income due to Ent
Sale
0
2015 Area
55
Ref Area
0
Net Unit
0
Ent income after Pur / Sale
5,908
2014 current unit value
107 Based on
55
Purchases
Sale
Initial unit value
70
Value of Transaction
0
0
2019
2014 post trading unit
value
107 Based on
55
Total Increase in Payments
(Convergence)
139%
6,266
Initial unit value
70
Linear Reduction 2014
10.49
Entitlement Value
2013
No
Used
Total Value 2013
Linear Reduction
2014
Purchase of Entitlements
400
55
55
22,000
358
Number
0
Income from New Ent only
0
0
0
Net Unit
0
Income from Current Ent
only
19,692
Total Income post Purchase
19,692
0
0
55
55
22,000
19,692
Sale of Entitlements
2013 Area
55
Number
0
Loss of Income due to Ent
Sale
0
2015 Area
55
Ref Area
0
Net Unit
0
Ent income after Pur / Sale
19,692
2014 current unit value
358 Based on
55
Purchases
Sale
Initial unit value
232
Value of Transaction
0
0
2019
2014 post trading unit
value
358 Based on
55
Total Decrease in Payments
over 5
years (Convergence)
139%
13,082
Initial unit value
232
Linear Reduction 2014
10.49
Entitlement Value
2013
No
Used
Total Value 2013
Linear Reduction
2014
Purchase of Entitlements
370
50
50
18,500
331
Number
Income from New Ent only
0
500
20
20
10,000
448
Net Unit
Income from Current Ent only
25,510
Total Income post Purchase
25,510
0
0
70
70
28,500
25,510
Sale of Entitlements
2013 Area
70
Number
Loss of Income due to Ent
Sale
0
2015 Area
70
Ref Area
0
Net Unit
Ent income after Pur / Sale
25,510
2014 current unit value
364 Based on
70
Purchases
Sale
Initial unit value
237
Value of Transaction
0
0
2019
2014 post trading unit
value
364 Based on
70
6 yr Income from Ent pre Purchases /
Sale
84%
137,956
Initial unit value
237
6 yr Income from Ent post Purchases /
Sale
84%
137,956
Linear Reduction 2014
10.49
Entitlement Value
2013
No
Used
Total Value 2013
Linear Reduction
2014
Purchase of Entitlements
487
16
16
7,792
436
Number
50
Income from New Ent only
15,000
0
0
Net Unit
300
Income from Current Ent only
6,975
Total Income post Purchase
21,975
0
0
16
16
7,792
6,975
Sale of Entitlements
2013 Area
66
Number
Loss of Income due to Ent
Sale
0
2015 Area
66
Ref Area
0
Net Unit
Ent income after Pur / Sale
21,975
2014 current unit value
106 Based on
66
Purchases
Sale
Initial unit value
69
Value of Transaction
35,826
0
2019
2014 post trading unit
value
333 Based on
66
6 yr Income from Ent pre Purchases /
Sale
141%
49,666
Initial unit value
216
6 yr Income from Ent post Purchases /
Sale
87%
120,514
Linear Reduction 2014
10.49
Entitlement Value
2013
No
Used
Total Value 2013
Linear Reduction
2014
Purchase of Entitlements
810
35
35
27,945
725
Number
Income from New Ent only
0
372
5.4
5.4
2,003
333
Net Unit
Income from Current Ent
only
32,403
318
20
20
6,252
285
Total Income post Purchase
32,403
0
0
60
60
36,200
32,403
Sale of Entitlements
2013 Area
64
Number
20
Loss of Income due to Ent
Sale
14,580
2015 Area
64
Ref Area
0
Net Unit
810
Ent income after Pur / Sale
17,823
2014 current unit value
506 Based on
64
Purchases
Sale
Initial unit value
329
Value of Transaction
0
29,160
2019
2014 post trading unit
value
278 Based on
64
6 yr Income from Ent pre Purchases /
Sale
77%
167,892
Initial unit value
181
6 yr Income from Ent post Purchases /
Sale
92%
100,831
Linear Reduction 2014
10.49
Entitlement Value
2013
No
Used
Total Value 2013
Linear Reduction
2014
Purchase of Entitlements
300
50
50
15,000
269
Number
Income from New Ent only
0
0
0
Net Unit
Income from Current Ent only
13,427
Total Income post Purchase
13,427
0
0
50
50
15,000
13,427
Sale of Entitlements
2013 Area
50
Number
Loss of Income due to Ent
Sale
0
2015 Area
30
Ref Area
0
Net Unit
Ent income after Pur / Sale
13,427
2014 current unit value
268 Based on
50
5 Year Income based on 50 Ha in 2015
63,537
Initial unit value
174
5 Year Income based on 30 Ha in 2015
57,293
2014 post trading unit
value
447 Based on
30
Increase Rate of Convergence of
6,000
Initial unit value
290
Saving in Land Rent over 5 years
37,065
Linear Reduction 2014
10.49
Entitlement Value
2013
No
Used
Total Value 2013
Linear Reduction
2014
Purchase of Entitlements
120
55
55
6,600
107
Number
55
Income from New Ent only
16,500
0
0
Net Unit
300
Income from Current Ent
only
5,908
Total Income post Purchase
22,408
0
0
55
55
6,600
5,908
Sale of Entitlements
2013 Area
55
Number
55
Loss of Income due to Ent
Sale
5,940
2015 Area
55
Ref Area
0
Net Unit
120
Ent income after Pur / Sale
16,468
2014 current unit value
107 Based on
55
Purchases
Sale
Initial unit value
70
Value of Transaction
39,408
11,880
2019
2014 post trading unit
value
299 Based on
55
6 yr Income from Ent pre Purchases /
Sale
139%
41,675
Initial unit value
195
6 yr Income from Ent post Purchases /
Sale
90%
91,950
Number of Entitlements
55
55
2014
5,869
16,323
2015
6,112
15,428
2016
6,636
15,274
2017
7,161
15,124
2018
7,686
14,975
2019
8,211
14,825
41,675
91,950
Option 1 High
91,950
50,275
Option 2 Low
41,675
Cost
Purchase
Sale
Number of Entitlements
55
55
Value per Entitlement
300.00
120.00
Multiple
2.25
1.8
Commission
5
VAT
23
Value of Transaction
39,408
11,880
Net Cost / Net Surplus
27,528
Change in Income after Trading Entitlements
50,275
Change in Cashflow (year of trading)
22,747
Gross Income Tax Rate (varies 26-52)
28
Increase in Income Tax payable over 6 years
14,076.99
Increase in Income over 6 years after Income Tax
36,197.96
CGT Exemption
1,270
Capital Gains tax rate
33
CGT Liability
3,501
Increase in Net Income after Taxes
32,696.66
Increase in Net income after Taxes per year
5,449.44
AREAS of NATURAL CONSTRAINTS
(Now known as the Disadvantaged Areas Scheme
New Designation
Physical Constraints
Ireland
Soil Moisture Deficit, Soil Characteristics
and Slope
Implemented by 2018
New Regulation governing 2015 ANC Scheme
SUCKLER SCHEME
BEEF DATA and GENOMICS
52 Million funding per annum
Consists of elements of the Beef Data programme
and Beef Genomics Scheme
May alter during negotiations on Rural
Development Programme 2014 to 2020
KNOWLEDGE TRANSFER MEASURES
Contains elements of BTAP and STAP
Priority Sectors
Dairy Expend /New Entrant
Beef and Sheep Sector
Pig/Poultry Sectors
Agri-Environment
(Water Quality/Biodiversity)
Other sectors (dairying, tillage, equine)
Professional training for Advisors
Telephone: 0761 064438
Email:
CAPdirectpayments@agriculture.gov.ie
Tipperary Office
(062) 52040
info@reagroup.ie
Richard Rea
086
607 0686
Tom Dawson
086
823 8283
AnnMarie Clarke
086
251 1012
Susan Clancy
086
603 1847
Shane Hennessy
086
312 9451
Ian Kenny
087
250 1683