‘Scope for further reduction’ on 20% entitlements clawback

There is “scope for further reduction” on the 20% clawback currently implemented on land entitlement sales, according to the Irish Creamery Milk Suppliers’ Association (ICMSA).

Commenting on the clawback, the deputy president of the ICMSA, Lorcan McCabe, said that it was the ICMSA that had proposed its reduction from 50% and the association feels that there is scope for a further reduction “in the interests of farmers”.

“ICMSA does have a concern that – yet again – we have created an expensive industry around farmers and any changes introduced need to address and simplify the process,” McCabe said.

The ICMSA is firmly of the view that entitlements should be in the hands of active producers and, under the current rules, there is a genuine concern that this is not always the case.

“Under the Common Agricultural Policy (CAP) post-2020, the rules must ensure that active farmers’ benefit from direct payments and that the industry built up around direct payments is kept to an absolute minimum,” McCabe said.

These comments come in light of the revelation that there has been a 25% increase in the trade of entitlements compared to last year – of which the vast majority is through leasing.

Michael Guiry of Guiry Auctioneers in Waterford city has estimated that the sale of entitlements is accounting for just 5% of the market, due to the 20% clawback.

“There’s very few selling; the 20% clawback is stopping that,” Guiry explained. High-value entitlements – which may be up to €600 – are trading for 2.5 times their value, while low-value entitlements (starting at €150) are trading for two times their value.