As the meetings went on, the questions became more focused on the details of what is going to be implemented. It was obvious that many farmers had read the Department of Agriculture CAP booklet and were starting to get a better handle on the changes in the new system. They were there for specific information on how it will affect their own situation. The Department panel each night was made up of Bernadette Brennan, Valarie Kirwan, Michelle McNamara and Andy McGarrigle, who fielded the written questions from the floor.

Young farmers

Young farmers were definitely the most asked about across all venues. Many of the questions were to clarify the criteria for both the National Reserve and the Young Farmers’ Scheme (YFS).

To meet the definition of a “young farmer”, applicants must be 40 or less in the first year they apply for the basic payment scheme. They must have started farming within the five years prior to their first application under the Basic Payment Scheme (BPS) and have FETAC Level 6 agriculture qualifications.

Persons who meet the definition of a young farmer are eligible to participate in both the National Reserve and the YFS. However, in the case of the National Reserve, additional criteria may be added such as off-farm and on-farm income thresholds.

How much does a young farmer get under each scheme? Payment under the YFS is based on the national average payment per hectare (BPS plus Greening) which will be around €256/ha. It means the YFS 25% payment will be around €64/ per entitlement activated by the young farmer up to a maximum of 50 hectares.

An allocation from the National Reserve will be based on the national average entitlement value (BPS) of approximately €171.

As well as new entitlements, the National Reserve can also give a top-up to bring the applicant’s entitlement value up to but not over the estimated national average of €171 per entitlement. The Department has not made a decision on the maximum amount that will be given from the National Reserve. They are very conscious that the pot of money is limited.

Another point that was clarified was that when a person received their herd number is the date from which they are deemed to have started farming – it is not when they submit their first SFP form.

This week, the Department clarified that they are taking a year to mean from 1 June to 31 May for the YFS and National Reserve schemes. This is important as it gives some young farmers an extra year top up. For example, take a young farmer who started in November 2013. The SFP application in 2014 is deemed to be his first year of startup. This will ensure they get an extra year top-up (four instead of three). For farmers who started between June and December 2010, it means they can squeeze in for one year of top-up and priority access to the National Reserve and a potential grant top-up to 60% in 2015.

Young farmers in a partnership or company can get the 25% YFS payment but they must have a controlling say in the affairs of the business. A son/daughter will qualify for top-up if they have the education criteria and a controlling say in the running of the farm.

‘Old young farmers’

The most vocal group across all meeting was the “old young farmers”. These are farmers who started farming between 2008 and 2011. They felt particularly hard done by as there was no installation aid or any other incentives when they started farming.

“The Department is fully aware of this group of farmers and is looking closely at the National Reserve to see if they can be looked after,” said Bernadette Brennan from the Department on more than one occasion.

However, she made it clear that their hands are tied on the definition of a young farmer as it is clearly stated in the regulations that eligible farmers must have stared in the previous five years. This definition excludes these farmers from not just the YFS and the National Reserve but also the 60% grant aid under Pillar II

Buying/selling entitlements

There were plenty of questions on buying entitlements and even some farmers looking to sell to reduce the impact of convergence. Every situation is different and the key message here was that farmers need to get advice. Increasing the value of entitlements held in 2014 will increase the amount of money you bring into the new system. The initial value of the basic payment scheme entitlements will be established by dividing the number of hectares you submitted in 2013 or 2105, whichever is lower, by the value you carry forward from 2014. Establishing a higher initial unit value will expose you to higher cuts from the process of convergence if you are over the average of €171/ha basic payment (around €250/ha currently).

Farmers should work out the difference in income streams. There is a calculator on www.farmersjournal.ie/sfp to do this. It uses the net entitlement value printed on your SFP application.

The Department has also put up it calculator on www.agriculture.ie. It uses gross entitlement values that are also printed on your SFP application. Both are just estimates at this stage.

In general, farmers with spare land and who have money on deposit – and were paying at the low rate of tax – have the most to gain. You can pay too much for entitlements especially if you are paying the high rate of tax.

100% leased entitlements

The message was clear: approximately 6,000 farmers leased out all their land and entitlements in 2013 and did not automatically get an allocation right in the new system. These entitlements will have to be permanently transferred by 15 May 2014 or they will be lost. If you are in a lease which covers the 2014 scheme year, both sides have to agree to break the entitlement aspect of the lease to enable a permanent transfer. There is a form on the Department website for this and it should be returned with the transfer of application form. The most clear-cut option is a straight sale but there are tax implications.

Consultants are facilitating a deal between owners and active farmers. They are complicated so make sure to take your time. Talk to your consultant or adviser early to see what is possible.