Farmers who are in the market for Basic Payment Scheme (BPS) entitlements are opting to lease for the 2021 scheme year, rather than buy them through an outright sale.
It stems from uncertainty about the long-term structure of farm support schemes in NI, with DAERA currently giving no guarantee that entitlements will be used for allocating payments in 2022.
“Our advice is to keep leasing this year until we see what’s coming. We have been pretty busy so far and deals are being agreed at similar levels to last year,” said Omagh-based auctioneer Roy McCracken.
Some deals for the outright sale of entitlements are still being done, although this is mainly for smaller areas, usually where a farmer has recently purchased land.
“If you only need entitlements for a few hectares and you can buy them at around face value, then buy them. They will pay for themselves this year and if things change next year then it will not be a big issue,” McCracken said.
The cost of leasing entitlements varies and depends on the value and number of entitlements on the table. In general, entitlements are leased for one year at 40%-60% of value.
Despite DAERAs’ online service for transferring entitlements not opening until 1 March, local brokers want to get deals agreed early so that entitlements can be officially transferred once the system goes live.
“We have been trading since Christmas. The early bird gets the safest entitlements with the best returns,” maintained McCracken.
Agreeing deals early on also avoids a last-minute rush to secure entitlements before the online transfer services closes on 4 May.
The department has already opened the entitlement register function on DAERA online services. This allows each farmer to view the number and value of entitlements available to their business in 2021.
All BPS entitlements for this scheme year differ to 2020, as values are now quoted in sterling instead of euros and are 44% higher because the Greening payment has been added on.