The value of entitlements held by farmers in 2014 will form the basis for the calculation of the value of their entitlements under the new Basic Payment Scheme in 2015. This is according to an update from the Department of Agriculture this afternoon.

“The decision completes the package of the three ‘reference points’ that will determine eligibility and value under the new scheme and provides farmers with a clear picture of how the transition from the Single Payment Scheme to the Basic Payment Scheme will be achieved,” it noted.

Agriculture Minister, Simon Coveney, had previously announced that only those farmers who receive a direct payment in 2013 have an automatic ‘allocation right’ to receive entitlements in 2015 while the number of entitlements to be allocated to a farmer will be based on the lesser of the hectares declared by a farmer in 2013 and 2015.

According to the department, today’s decision clarifies the calculation of the value of entitlements in 2015.

In a statement this afternoon Minister Coveney said: “I understand that it is a complicated situation but my reasoning for making the decision to use the value of entitlements rather than the value of payments is to ensure that reductions applied to farmers’ payments as a result of the ongoing review of land parcels will not be carried forward into the new scheme.”

In addition, according to the department, the decision significantly reduces the demand for land in 2014 and should make it easier for those who traditionally lease in land to continue to do so.

It explained: “As the calculation will not be based on the ‘payment’ received by the farmer in 2014, there is less need for farmers to maximise their payment in 2014 by ensuring that all their entitlements are covered by an eligible hectare. The value of all entitlements held by a farmer in 2014 will be taken into account, even where the farmer does not draw down payment on all such entitlements.”

The decision also clarifies the status of entitlements that are partially leased out in 2014 where the lessor was also paid in his/her own right in 2013 and therefore has an allocation right.

According to the department, the value of such leased entitlements will be attributed to the lessor rather than to the lessee provided that in such cases the lessor and lessee enter into a private contract clause (PCC) whereby the lessor may lease out together with the holding or part of it the corresponding payment entitlements that will be allocated in 2015. “Such PCC would have the effect of recognising a lease entered into under the single payment scheme and carries it forward into the basic payment Scheme in 2015.”

However the department clarified that persons who have leased out their entire holding and all entitlements for a period which includes 2013 do not have an automatic ‘allocation right’ and are not eligible to establish entitlements in their own right, nor enter into a PCC to transfer entitlements to the lessee.

“The value of such 100 per cent leased entitlements may be lost to both lessor and lessee unless action is taken. Persons in this situation may avoid the loss of the value of their leased entitlements by entering into a permanent transfer of the leased entitlements under the 2014 scheme year before the 15 May 2014.”

It is understood the department will write to all persons who find themselves in this position to advise them of their options.

The minister concluded: “I am confident that the measures I have put in place will ensure a smooth transition from the SFP to the BPS in the new Common Agricultural Policy (CAP). Of course, I would also encourage famers to talk in detail with their adviser or consultant to ensure that they understand the transition into the new CAP.”

Training sessions for both Teagasc and private farm consultants with the department is set to begin next week on all new measures.

Farmers and their representatives who have specific questions or require clarification on any aspect of the new basic payment scheme can contact the newly established 2015 Direct Payments Information Centre at 0761 064438 or by email at [email protected].