With clarity on this year’s Basic Payment Scheme (BPS) emerging in recent weeks, the entitlement trading process for the 2020 scheme year has started across NI.
According to Stephen Keys of RA Noble and Co, there is already early demand for both buying and leasing entitlements.
“We haven’t many deals over the line yet, but we are getting a lot of calls from farmers to tell us how many surplus entitlements they have for trading, then on the other side we are being contacted by farmers that need entitlements,” he said.
The Clogher-based auctioneer said that entitlements are being sold for around 90% of their value, and agreements for one-year leases range from 40% to 60% of entitlement values.
“Leasing depends on the value of the entitlement. If you lease an entitlement worth €400 at 60% of its value, it will make you more than a €200 entitlement leased at 40%,” Keys said.
DAERA is expected to convert the value of all entitlements in NI from euro to sterling in the coming weeks.
In January 2020, the overall budget for direct payments in the UK was converted at the same exchange rate as last year of €1 = £0.89, and the same rate is expected to be used for converting entitlements in the 2020 scheme year.
Also, with entitlements now frozen for 2020, it means that entitlements in NI will gross the same money in sterling terms this year as they did in 2019.
Beyond 2020
However, uncertainty surrounding the structure of farm support schemes in 2021 has meant that entitlements are being sold for slightly less this year. In 2019, entitlements were generally worth 100% of their value to buy, and before last year they typically sold for one and a half times their value.
In August 2018, DAERA proposed retaining entitlements as the basis for direct payments in both 2020 and 2021, although no final decision has been made on next year yet.
“We are only guaranteed this year, so we have to keep our customers right and market entitlements on that basis, even though there is a possibility that entitlements will still have a use beyond 2020,” Keys said.
Timeline
DAERA’s online entitlement transfer service usually opens at the beginning of March and closes in early May, around a fortnight before the Single Application Form deadline.
However, auctioneers recommend agreeing deals for buying or leasing entitlements in good time to avoid a last-minute rush. Any deals struck before DAERA’s entitlement transfer window opens are agreed in principal and then are finalised once the online service becomes live.
Read more
Debate heats up on area payments
100% of BPS money this October
With clarity on this year’s Basic Payment Scheme (BPS) emerging in recent weeks, the entitlement trading process for the 2020 scheme year has started across NI.
According to Stephen Keys of RA Noble and Co, there is already early demand for both buying and leasing entitlements.
“We haven’t many deals over the line yet, but we are getting a lot of calls from farmers to tell us how many surplus entitlements they have for trading, then on the other side we are being contacted by farmers that need entitlements,” he said.
The Clogher-based auctioneer said that entitlements are being sold for around 90% of their value, and agreements for one-year leases range from 40% to 60% of entitlement values.
“Leasing depends on the value of the entitlement. If you lease an entitlement worth €400 at 60% of its value, it will make you more than a €200 entitlement leased at 40%,” Keys said.
DAERA is expected to convert the value of all entitlements in NI from euro to sterling in the coming weeks.
In January 2020, the overall budget for direct payments in the UK was converted at the same exchange rate as last year of €1 = £0.89, and the same rate is expected to be used for converting entitlements in the 2020 scheme year.
Also, with entitlements now frozen for 2020, it means that entitlements in NI will gross the same money in sterling terms this year as they did in 2019.
Beyond 2020
However, uncertainty surrounding the structure of farm support schemes in 2021 has meant that entitlements are being sold for slightly less this year. In 2019, entitlements were generally worth 100% of their value to buy, and before last year they typically sold for one and a half times their value.
In August 2018, DAERA proposed retaining entitlements as the basis for direct payments in both 2020 and 2021, although no final decision has been made on next year yet.
“We are only guaranteed this year, so we have to keep our customers right and market entitlements on that basis, even though there is a possibility that entitlements will still have a use beyond 2020,” Keys said.
Timeline
DAERA’s online entitlement transfer service usually opens at the beginning of March and closes in early May, around a fortnight before the Single Application Form deadline.
However, auctioneers recommend agreeing deals for buying or leasing entitlements in good time to avoid a last-minute rush. Any deals struck before DAERA’s entitlement transfer window opens are agreed in principal and then are finalised once the online service becomes live.
Read more
Debate heats up on area payments
100% of BPS money this October
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