1 Closed period

The closed period to apply to the Department of Agriculture’s register of farm partnerships runs from 31 March until 15 May 2018. Farm partnerships may still be registered after this. However, they will most likely experience BPS payment delays.

Teagasc has developed a set of guidelines when it comes to developing a farm partnership which farmers should examine if contemplating going down the partnership route, with some of the key points to consider examined here.

In the majority of cases, dairy farmers have been the most active entering into a farm partnership with a young farmer but it may also be a very attractive option for other enterprises.

2 Requirements

The minimum term for a farm partnership is five years. With that in mind, there is no specific penalty if a farmer was to leave the partnership before five years. That said, both Revenue and Department schemes have certain rules in relation to maintaining the partnership in order to receive payment.

Both parties of the partnership are required to submit all of their agricultural holdings and farming assets into the farm partnership. One of the main requirements for a farmer who wishes to be the experienced farmer in the partnership is that they must be engaged in farming on either owned or leased land for at least two years before the date of formation of the partnership.

A registered farm partnership must consist of at least two people. One must be a farmer who has been farming in their own right for two years preceding the date on which the partnership is established. The other must be a person with an appropriate agriculture qualification whose contribution to the farm partnership entitles them to at least 20% of the profit from the farm.

Where there are two farms in partnership, they must not be more than 75km away from each other. A farm partnership can have up to 10 partners.

3 Benefits

The profits of the partnership will be calculated at the end of the year and profits split in accordance with profit-sharing ratio decided upon in the partnership. The low rate of tax is set at 20% and with profits shared each partner could avail of this tax ban up to the current limit of €33,800. A young trained farmer under 35 years of age could also gain stock relief against the growth in the value of livestock during the accounting year. The maximum stock relief that can be claimed is €70,000 over a four-year period or a maximum of €30,000 in one year.

The young farmer top-up can be obtained up to a maximum of 50 activated entitlements declared by the partnership in the year of application if one of the partners qualifies as a young trained farmer. The young farmer may also apply to the National Reserve to receive a top-up to their low value entitlements, if the entitlements are less than the national average. They may also apply for new entitlements on naked land that has no entitlements.

To be eligible for either the Young Farmer Scheme (YFS) or the National Reserve, the qualifying young farmer must be added to the existing herd number, named on the partnership bank account, and sign a legal declaration of control.

The National Reserve is subject to an off-farm income limit of €40,000. This includes the off-farm income off all partners. However, where a qualified young trained farmer has farmed in their own right for at least one year, then only their off-farm income is counted, but any top-up is only paid on the hectares that they themselves contribute to the partnership.

Where farmers have farmed in their own right prior to forming a partnership, they are eligible to continue to receive payments due to them under ANC, GLAS and the Organic Scheme.

4 Setting up the partnership number

The existing herd number(s) must be changed into the same name as the partnership and partnership bank account, which generally means adding numbers to a herd number. This will be done through the district veterinary office (DVO). The forms used for this are an ER1.1 where names are being added to the existing herd number, and an ER1 form is required where the herd keeper is changing. Both forms are available from the local DVO office or on the Department’s website.

Where two herd numbers are being put into one, a separate ER1.1 form must be completed for each herd number. It is important that farmers are aware that any change to the names on a herd number will require a transfer of entitlements, which must be completed online for 2018.

For the majority of cases, a new partnership bank account must be set up in the names of the partners, if a new partner cannot be added to the existing bank account.

5 Register the partnership

The completed application form must be returned to the Farm Partnership Registration Office, Agriculture House, Kildare Street, Dublin 2. The farm partnership agreement must be included which will outline the details of the partnership including the profit-sharing ratio, the farm assets, areas of responsibility for each partner and time off and holidays, among other aspects. It is vital that farmers do not rush when deciding on the partnership agreement.

  • Farm partnership agreement.
  • File plans and folio copies of each applicants holdings, showing proof of ownership or leasing.
  • Evidence of the joint bank account that has been established for the partnership.
  • Evidence of agricultural qualifications where required.
  • Collaborative Farming Establishment Grant

    Grant aid is available to go towards the cost of setting up a registered farm partnership. A grant of 50% is available up to a maximum spend of €5,000 meaning grant aid up to a maximum of €2,500 is available. Receipts and invoices specifically targeted at the setup of the partnership can be included. Where the partnership includes a young farmer the grant will be withheld until the education is complete. The partnership registration office will email a link to the partnership email to apply for this grant.