Farm Ireland
Independent.ie

Sunday 18 February 2018

Farmers in scramble to secure highest value SFP entitlements

Agriculture Minister Simon Coveney with French Minister for Agriculture Stephane Le Foll. Photo: Barbara Lindberg.
Agriculture Minister Simon Coveney with French Minister for Agriculture Stephane Le Foll. Photo: Barbara Lindberg.

Caitriona Murphy and Darragh McCullough

THE battle for high value entitlements has commenced, as auctioneers report unprecedented numbers of farmers looking to maximise their Single Farm Payment over the next seven years.

Despite efforts by the EU's agricultural commissioner, Dacien Ciolos, to bring entitlements to a standard value, farmers have realised that higher value entitlements still represent the best value for money over the next seven years.

In addition, farmers that were leasing in entitlements in recent years are being advised by agricultural consultants to buy out as many of these entitlements as possible before May 15 this year.

This follows suggestions from the Department of Agriculture that leased entitlements could be liquidated when the reformed CAP regime kicks off next year.

Following the Minister for Agriculture Simon Coveney's announcement regarding State and EU funding for the agricultural sector last week, entitlement traders such as Galway auctioneer Joseph Naughton described demand for entitlements as "frantic", with potential buyers outnumbering sellers by 20 to one.

URGING

"I would urge anyone who lost out on land as ineligible to see if they have been left with excess entitlements over their land. Those extra entitlements can be sold but this year is the farmers' last chance to sell them," he said.

"If the entitlements are not activated this year, they will vanish.

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"It's a seller's market at the moment and farmers who had ineligible land should think about cashing in their unused entitlements.

"Even fractions of entitlements are worth selling," he added.

Meath-based trader Helen McGee also said demand for entitlements was "unbelievable, just crazy" in recent days.

"At present we are getting an enormous amount of queries, with most people trying to improve what they will be getting in their single farm payment pot for the coming years," she said.

Ms McGee also sees a knock-on effect on the demand for con-acre. "I can see people taking more land this year to put entitlements on," she said.

The majority of buyers contacting her are anxious to trade up from units of €200-400 to units of €500-900.

This is despite Minister Coveney's declaration last week that no farmer will receive more than €700/ha after 2019.

"They have realised that they can still make more out of investing in a high value entitlement now than waiting for a low value one to increase over the next seven years to just €160/ha," said Ms McGee.

While most deals have yet to be hammered out, both Joseph Naughton and Longford agent James O'Meara predicted that entitlements in the range of €200-350/unit would sell this year for twice their value. The same units sold in 2013 for 1.6-1.7 times their value.

However, Carlow-based agri-consultant Pat Minnock cautioned farmers intending to purchase entitlements to be aware of the tax implications of such a move.

"There are VAT, income tax and capital gains tax implications for anyone looking to buy entitlements," he said.

Mr Minnock added that farmers should know exactly where they stood on the issue of leased entitlements before they signed up leases this year.

Irish Independent