Deals for trading Basic Payment Scheme (BPS) entitlements are being concluded ahead of the closure of DAERA’s online transfer service on 4 May.
According to Omagh-based auctioneer Roy McCracken, transactions are being completed earlier this year as farmers aim to submit Single Applications in good time due to coronavirus restrictions.
“The market is still strong and there is good demand for high value entitlements, although a bigger volume of lower value entitlements has made them harder to move,” he said.
Auctioneers note that a significant number of entitlements continue to be offered up for sale or lease that have the NI average value of €229 (excluding Greening). Most of these would have originated from a claim by a young farmer or new entrant to the regional reserve.
“High value entitlements are still around half their value to lease. Prices for low value entitlements have had to be reduced to try and match the yield of a high value one. Entitlements below €200 are very difficult to shift,” McCracken said.
Prices for low value entitlements have had to be reduced to try and match the yield of a high value one
Another factor impacting the sale (but not lease) of low value entitlements is that the transition of all NI entitlements towards the regional flat rate has now stopped (at year five of seven). It has meant that below average entitlements are unlikely to yield the buyer more money next year, unless DAERA minister Edwin Poots decides to re-start this transition process.
McCracken maintained that uncertainty surrounding the future of BPS is not having a significant impact on entitlement sales.
“Entitlements to buy are about £40 under what they would earn from Basic Payment (including Greening) in sterling terms this year.
“Most farmers are living in the hope that things won’t change much next year. They reckon we will get another year similar to 2020,” he said.
Cash pressure
However, one-year entitlement leasing is still proving more popular than outright sales this year, but McCracken maintains that this is mainly due to cashflow pressures on farms.
He said a common issue raised by farmers is that cash is tight because livestock cannot be sold through marts due to coronavirus restrictions.
“We have been encouraging farmers to go for the short term return in leasing so that if you take the lease and pay your money now, within six months you’ll have more than the double of it back,” the entitlement broker said.
Read more
Auctioneers line up deals for entitlements
100% of BPS money this October
Deals for trading Basic Payment Scheme (BPS) entitlements are being concluded ahead of the closure of DAERA’s online transfer service on 4 May.
According to Omagh-based auctioneer Roy McCracken, transactions are being completed earlier this year as farmers aim to submit Single Applications in good time due to coronavirus restrictions.
“The market is still strong and there is good demand for high value entitlements, although a bigger volume of lower value entitlements has made them harder to move,” he said.
Auctioneers note that a significant number of entitlements continue to be offered up for sale or lease that have the NI average value of €229 (excluding Greening). Most of these would have originated from a claim by a young farmer or new entrant to the regional reserve.
“High value entitlements are still around half their value to lease. Prices for low value entitlements have had to be reduced to try and match the yield of a high value one. Entitlements below €200 are very difficult to shift,” McCracken said.
Prices for low value entitlements have had to be reduced to try and match the yield of a high value one
Another factor impacting the sale (but not lease) of low value entitlements is that the transition of all NI entitlements towards the regional flat rate has now stopped (at year five of seven). It has meant that below average entitlements are unlikely to yield the buyer more money next year, unless DAERA minister Edwin Poots decides to re-start this transition process.
McCracken maintained that uncertainty surrounding the future of BPS is not having a significant impact on entitlement sales.
“Entitlements to buy are about £40 under what they would earn from Basic Payment (including Greening) in sterling terms this year.
“Most farmers are living in the hope that things won’t change much next year. They reckon we will get another year similar to 2020,” he said.
Cash pressure
However, one-year entitlement leasing is still proving more popular than outright sales this year, but McCracken maintains that this is mainly due to cashflow pressures on farms.
He said a common issue raised by farmers is that cash is tight because livestock cannot be sold through marts due to coronavirus restrictions.
“We have been encouraging farmers to go for the short term return in leasing so that if you take the lease and pay your money now, within six months you’ll have more than the double of it back,” the entitlement broker said.
Read more
Auctioneers line up deals for entitlements
100% of BPS money this October
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