Rich pickings for landlords
This day next year could be the final time you will be applying for the Single Farm Payment scheme as we currently know it. If all the political machines required to get an agreement over the line finally get into gear, a new scheme will be in place for 2014.
But with all the debate and uncertainty about what the final rates per hectare will be and how much will be linked to greening, one key point appears to be going unnoticed. From 2014 the landowner, more so than the farmer, will be in the driving seat in relation to extracting the value of the entitlement.
For example, Jim has 100 entitlements. He's been claiming these on the 50ha he owns and 50ha that he rents. If the rented land disappears in the morning, Jim needs to find at least 50ha to keep claiming his entitlements.
But the plan is that from 2014 every hectare farmed in the country will have an entitlement attached. There will be no more 'naked acres' for Jim to rent to attach his entitlement to.
So if Jim doesn't have land to activate his entitlement in 2014, the entitlement vanishes.
This is what is supposed to be fuelling a 'land grab'. But the plot thickens.
Why would the land owner be interested in taking the land away from Jim? All things being equal, Jim will be paying the going rate for the land. If somebody outbids him, and secures the land for 2014, they will receive the entitlement for the plot. But why would another farmer pay more? Remember that as soon as they give up the land, they also lose the entitlement.
As a result, the entitlement just becomes factored into the rental rate for the land. In other words, it ends up going to the land owner.