The option of spreading single payment entitlements on owned land will, in many cases, save farmers money, even if convergence comes into play,” according to Irish Cattle and Sheep Farmers Association (ICSA) general secretary Eddie Punch.
“This is based on the premise that no land is rented and the savings made by so doing are factored into the equation,” he said.
“As a consequence, cattle and sheep farmers must take a fundamental and long-term perspective of their businesses prior to taking land in conacre this spring.
“We have had quite a number of farmers asking for advice on how best to spread their single payment entitlements over owned and rented land, given the complexity of the new Pillar 1 arrangements.
“All of this brings the issue of renting ground down to the fundamental point: what levels of profit can be generated from additional land that is taken in conacre?
“And this is a question that each farmer must ask themselves,” he said.
Punch went on to point out that a big question mark must be put over the renting of land in poor fertility, particularly if it is some distance from the home farm.
“Buying expensive store cattle just to have them ticking over on land of this type for the next six months makes no sense at all,” he said.
“Age is also a factor to be considered. Farmers in their 50s and 60s are the people who are most challenged when it comes to determining where they will be with their businesses 10 years hence. I find it hard to make a long-term case for people in this age bracket to get involved in expensive conacre deals.”
But the ICSA representative does see value in farmers on poor land renting ground that will genuine allow them improve the output and efficiency of their businesses.