Farm Ireland
Independent.ie

Sunday 19 November 2017

Land scarcity drives rental worry for 2015

Landowners 'take a punt' on SFP and refuse to renew leases

Darragh McCullough

Darragh McCullough

There are growing fears that the volume of farmland available to rent over the next three years will be slashed as landowners remove holdings from the market.

Increasing numbers of landowners are refusing to renew leases on their farms on the back of advice from agri-consultants that they could be in line to activate Single Farm Payment (SFP) entitlements of their own from 2015.

Farmers who rely on rented land to claim their existing entitlements are anxious that this trend will reduce the land available and spark the land grab predicted when the EU first revealed its CAP reform proposals.

"The land grab is starting to happen already. There were a lot of people left out of the system the last time and landowners have been thinking about this all summer," said Meath-based farm advisor, Cyril Darcy.

"They're prepared to take a punt now for a year or two. But this is going to be a major problem," he said.

Tipperary agronomist PJ Phelan agreed that the situation was heating up for all parties: "It's going to put a lot of pressure on the genuine farmer."

Mr Phelan said there would be a lot of share farming arrangements emerging "on paper" but that landowners could actually find themselves worse off if they began farming in order to generate entitlements on their land.

"Share farming arrangements will leave the landowner much more exposed to cross-compliance penalties from the Department and may even make the land less attractive because it will have lower entitlements," he said.

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Limerick-based advisor David Walsh said that livestock areas would not be as badly affected by landowners looking to take land back.

"It's more difficult to start up a livestock enterprise.

"In tillage areas, landowners can get contractors to do all the work for them," said Mr Walsh.

However, Richie Hackett, who works as a farm advisor in Dublin said that the reforms would up the demand for land to activate entitlements.

"The farmer who had 50 entitlements and 80ha of land will have 80 lower value entitlements in 2015 that he'll need every one of his 80ha of land to activate.

"That's a situation that's going to favour the land owner.

"But I can understand why land owners would be keen to take land back. It makes sense," he said.

Speaking at the Ploughing Championships, the IFA's deputy president, Eddie Downey, said the current proposals appeared to leave it wide open for landowners who had never farmed before to qualify for entitlements in 2015.

"If they declare themselves as new entrants, they will be able to apply to the national reserve for new entitlements at the lower rate. What exactly that rate will be, nobody knows," he said.

Meanwhile, the Minister for Agriculture, Simon Coveney, has confirmed the details of his opening position for the crucial negotiations due to commence next month.

"My proposal centres on an average cut of less than 10pc to the 50,000 farmers that are getting more than the national average of €270/ha. This will allow payments to farmers that currently get less than this to be brought up by an average of 30pc," the minister said in New Ross last week.

The minister now has support from Portugal, Spain, Denmark, Italy and Luxembourg on his 'approximation' model for CAP reform.

He is hopeful that France will lend its support to the concept but admitted that the ultimate outcome was more likely to be a mix of this model and Commissioner Ciolos' stated aim of a flat rate to all SFP recipients.

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