Farmers are entering the second year of the Basic Payment Scheme (BPS) payment mechanism for the period 2016 to 2020. Questions are starting to arise about entitlement use and, in particular, if there will be changes to the 50% clawback rule on entitlements sold without land or changes to the two-year use-it-or-lose-it entitlement rule.

Starting with the latter point, payment must be claimed on each entitlement in 2016 or 2017. If not, as it stands, entitlements will be lost to the national reserve. This is said to be adding life into the rental market in some areas at an earlier stage this year, with some farmers keen to move early and be in a position to claim the entitlements themselves rather than have to explore the option of leasing.

Entitlements can be claimed by the applicant or can be claimed through a lease or rental arrangement. Where entitlements were transferred for one year through a short-term arrangement, it is important to note that they will revert to the owner for the 2017 scheme year.

It is also important where entitlements were leased out in 2016 to ensure that they were activated, ie the transferee must declare 1ha of land to support each entitlement. This takes place between the transferor and the transferee and the Department has no role in these agreements on entitlement usage.

50% clawback rule

There were very low numbers of entitlements transferred by sale without land in 2016 due to the 50% clawback rule, meaning half the entitlements transferred in such a situation would be lost to the national reserve. To be considered a sale with land, 1ha must be sold per entitlement.

The Irish Farmers Journal understands that the Department of Agriculture is reviewing current circumstances and that information on the 2017 scheme will be released in the coming weeks.

The assessment will also be presented to the direct payments advisory committee in early February. IFA direct payments chair Richard Kennedy said: “The IFA will be making a case at the meeting for a national reserve for new entrants to farming in 2016/2017, to be funded from unused funds. We will also be looking for a review of the 50% clawback rule.”