1. Progress to date2. Features of new Direct Payments scheme3. Basic Payments scheme4. Calculation of number + value entitlements5. Internal convergence6. Transfer of Entitlements7. Private Contract Clause8. Young Farmer Scheme9. National Reserve10. Greening

June 2013: EU Agreement

July 2013: Consultation process

Schemes to be implemented Conditions of each scheme Model of Convergence under Basic Payment

Scheme

January 2014: Shape of Direct Payments

All existing entitlements expire 31 December 2014

Irelands Net National Ceiling reduced from €1.255 Billion to €1.216 Billion

Modulation deduction no longer applies

A linear reduction of 10.49% will apply to entitlements to bring their total value into line with 2014 ceiling. This reduction will be viewable on the SPS preprint and INET. Not applicable to farmers with SPS payment claim in 2013 of less than €5000

Final Year of Single Payment Scheme 2014

Ireland will also implement:

◦ Greening◦ Young Farmers Scheme◦ Coupled Support for Protein Crops (rate to be decided)

◦ National Reserve

Single Payment Scheme

Basic Payment Schemereplaced by

National Reserve

*minor adjustments to allow for Protein Support

Scheme% National

CeilingAmount

Greening 30% €364,500,900.00

Young Farmers Scheme 2% €24,300,060.00

Balance 68% €826,202,040.00

National Reserve 3% of Balance(first year only)

€24,786,061.20

2015 Basic Payment Scheme

€801,415,978.8

*Approximately 60% of 2014 SPS ceiling carried forward to 2015

Similarities Differences

Uses entitlements

Annual application process

Declare eligible land

One hectare per entitlement

Entitlements transferrable

Establishment of National Reserve

Entitlements subject to convergence: value will change from year to year

No Consolidation

No ‘rotation’ of entitlements

Entitlements allocated to ‘active farmers’ only

‘Definition of Active Farmer’

1. Farmer: rearing, growing, harvesting, milking, keeping animals or

2. Maintaining land in good agricultural and environmental condition or

3. Minimum Activity on marginal land (* to be defined)

‘Definition of Active Farmer’

1. Farmer: rearing, growing, harvesting, milking, keeping animals or

2. Maintaining land in good agricultural and environmental condition or

3. Minimum Activity on marginal land (* to be defined)

Other Categories to establish allocation right.

2013 ‘Gateway’ Clause farmers who receive a direct payment in 2013 (single payment scheme,

grassland sheep scheme, Burren Life, or Beef Data Programme) have an automatic ‘allocation right’

Scottish Derogation(Non-Entitlement Holder)

Never held entitlements (owned or leased) including in 2014

actively farming in 2013

Evidence of production in 2013

Objective criteria will be applied

Fruit and Vegetable Growers

No ‘allocation right’

produced fruit or vegetables in 2013

Minimum area may apply

National Reserve

Priority given to;

Young Farmers

New Entrants to farming

(see National Reserve)

Number of eligible hectares declared in

2013 or 2015whichever is lower

2015 Number of Entitlements

Additional land in 2014 or 2015 will have no impact on number of entitlements

Less land in 2015 compared to 2013 will reduce number of entitlements

Allocation Right

15 May 2013

15 May 2014

15 May 2015

Allocation Right1st Land

Reference

Value

2nd Land Reference

50 hectares

50 hectares

No. Of Entitlements = 50

Allocation Right15 May 2013

15 May 2014

15 May 2015

Allocation Right1st Land

Reference

Value

2nd Land Reference

50 hectares

40 hectares

No. Of Entitlements = 40

Allocation Right15 May 2013

15 May 2014

15 May 2015

Allocation Right1st Land

Reference

Value

2nd Land Reference

50 hectares

60 hectares

No. Of Entitlements = 50

Fixed Percentage of 2014 Value of Entitlements Owned* (and GLS)

Total Value in 2015

€9,000 (SPS Entitlements) + €1,000 (GLS)

€10,000 x 60% = €6,000

All farmers allocated an Initial Unit Value in 2015

Total Value of Entitlements (€6000) Initial Unit ValueNumber of Entitlements (50) (€120)

Status in 2013 Buy Entitlements in 2014?

Comments

2013 Allocation right(SPS, GLS, Burren, BDP)

Optional Will increase Initial Unit Value: increases impact of convergence; could cover surplus land

Scottish Derogation(Non-entitlement holder)

No To hold entitlements in 2014 would disqualify from allocation in 2015

Fruit and vegetable Optional Would give a 2014 ‘value’ if none held

YF or NE with allocation right

Optional But would reduce/negate allocation from Reserve

YF or NE with no allocation right

No Entitlements would not carry forward

National Average 90% National Average

Minimum Value of 60%◦ (by 2019)

(Transfer of €103m)

High Initial Unit Value

Low Initial Unit Value

The value of entitlements changes from year to year

€60

€170.87

€153.79

€93.79/3 = 31.26

€102.52

By 2019, all low value entitlements must reach at least 60% of national average entitlement value (estimate of €102.52)

2019 BPS ceiling National Average 2015 Eligible hectares (estimated €170.87)

Cannot be calculated until 2015

In 2019 no farmer will receive payment per hectare (BPS & Greening) over €700 per hectare (max. of €481 per entitlement)

• *National average = €170.87 (€248.58 with Greening) (2019 BPS ceiling/2015 hectares)

• 90% National average = €153.79 (€223.74 with Greening)

• 60% National average = €102.52 (€149.15 with Greening)

Farmer A (low value)

Farmer B (high value)

2014 Unit Value €80.00 €700.00

Initial Unit Value

€47.54 €415.94

2015 Value €58.53 (€85.15) €397.46 (€578.23)

2016 Value €69.53 (€101.15) €377.64 (€549.38)

2017 Value €80.53 (€117.16) €357.77 (€520.52)

2018 Value €91.53 (€133.16) €338.93 (€496.11)

2019 Value €102.52 (€149.16) €320.09 (€465.69)

*National average is estimated

No ‘rotation’ of usage; entitlements will revert if unused for two consecutive years

2015: restricted to inheritance, gift, merger, scission, admin transfer

sale and lease by PCC. Submitted by closing date 2015 No trading of new entitlements in

2015 by sale or lease

From 2016

Entitlements transferrable

Includes transfer by lease ‘with or without land’

No ‘clawback’ on transfers

Event Land Process

Inheritance With land Step into shoes

Gift With land Step into shoes

Admin Transfer With/without land Step into shoes

Partnership At least one party with land

No impact on number and value

Change of legal entity

At least one party with land

No impact on number and value

Scission At least one party with land

No impact on number and value

Sale (after 15 May 2014)

With land Private Contract Clause

Lease With land Private Contract Clause1. ‘Allocation right’ and ‘land reference’ accompany the land

2. ‘Value’ accompanies the entitlements

The Transferor The Transferee

Must hold Allocation right◦ and

Must be ‘active farmer’ in 2015◦ and

Must apply for and establish entitlements in 2015◦ and

(to fulfill these criteria should retain at least one hectare and one entitlements)

Must be ‘active farmer’ and

Must submit a BPS application in 2015 and declare land

and

Must submit a PCC application (with lessor)

Lease commenced prior to 2013 and continues to 2016 or later

Lessor holds ‘allocation right’ and establishes entitlements in 2015: lessee ‘active’ in 2015

Eligible to enter into PCC agreement to continue leasing arrangement

entitlements established in account of lessor

value and convergence path dependent on lessor’s reference points (land & 2014 value)

Land transferred to buyer before closing date for 2015

PCC submitted; land and corresponding BPS entitlements transferred to buyer

Seller holds ‘allocation right’ and establishes entitlements in 2015; buyer ‘active’ in 2015

entitlements established in account of seller and then transferred to buyer

value and convergence path dependent on seller’s reference points (land & 2014 value)

Land and SPS Entitlements transferred to buyer in March 2014

Value of entitlements will carry forward to buyer’s ‘value’ in 2015

Land will not be taken into account in 2015 for buyer (or the seller) (due to lesser of 2013/2015 rule)

PCC not recommended in this scenario

The Problem The Solution

Owner must hold ‘allocation right’ and must establish entitlements in 2015

100% lessors in 2013; no ‘allocation right

Value of entitlements leased out in 2014 may only assigned to owner (lessor) as only definitively held entitlements may be used for calculation of unit value.

Neither lessor nor lessee can carry forward value

Danger of loss of value of entitlements

Entitlements should be transferred permanently in 2014

Ideally to existing lessee who holds the land

Or to any person with an allocation right

Requires agreement of both parties to existing lease

Letters will issue to all farmers affected next week.

‘Young farmer’ status

Eligibility for;

National Reserve

Young Farmers Scheme

Aged 40 or less in first year of BPS application

Established holding within previous 5 years

Agricultural Qualification (FETAC Level 6)

Groups Conditions

Joint herdnumber

Partnership

Company

At least one person must meet definition of ‘young farmer’

Must declare that effective control of decision making power lies with young farmer – declaration on application form

‘Five years’ dates from when young farmer takes such control.

Payment ceases when young farmer no longer in control

Scheme details The Payment

Additional payment for young farmers

maximum of five years of payment

‘Five years’ dates from set-up of holding by young person

(2015 is optimum year for establishing)

Legal entity eligible for payment if meets definition of ‘young farmer’

25% of national average payment per hectare

Payment on maximum of 50 entitlements

Details Reserve Uses Allocation to ‘Active farmers’

Funded by 3% of BPS ceiling in 2015

Replenished from unused entitlements

May allocate new entitlements or give ‘top-up’ to existing entitlements

Allocation based on BPS national average for year of allocation

Priority for;

1. Young Farmers (as defined under YFS)

2. New Entrants

commencing in 2013 or later

Must apply to BPS within two years of commencing

Agricultural qualification at FETAC level 6

Other criteria, e.g. Off-farm income and a limit.

All farmers subject to greening

Crop Diversification Permanent grassland Ecological focus area (EFA)

Arable hectares Minimum Number of

Crops

Percentage

Less than 10 ha No obligation

10 to 30 ha 2 Main crop not more than 75% of arable land

More than 30 ha 3 Main crop not more than 75%Two main crops not more than 95%

Definition of ‘Crop’ includes;

land lying fallow grasses or other herbaceous forage Winter crop Spring crop

National level Farmer Level

Managed at national level

Ratio of permanent grassland shall not decrease by more than 5% compared with 2012

Protection of grassland in

areas covered by Directives on Natural Habitats and Wild Birds

Conversion to forestry exempted

If 5% ratio breached, MS shall oblige farmers to reconvert land back to grassland

Fallow Terraces Landscape features (including

features adjacent to arable land)

Buffer strips (including strips adjacent to arable land)

Agro-forestry Afforested areas Catch crops or green cover Areas with Nitrogen fixing

crop

Weighting and Conversion Matrix

15 ha arable land (37.06 acres)

5% of arable allocated to EFA

(2017 review: possible 7%)

75% of eligible land is grassland, used for production of grasses or other herbaecous forage or fallow land, provided remaining arable land not more than 30 ha.

75% of arable land is used for production of grasses or other herbaceous forage or fallow land, provided remaining arable land not more than 30 hectares

Land farmed organically

Telephone: 0761 064438

Email: CAPdirectpayments@agriculture.gov.ie

Thank you for your attention