New CAP entitlement rules to hit the land leasing market
Farm organisations have warned of potential chaos in the conacre and leasing market unless the Department of Agriculture can secure changes to the EU Commission rules on leasing entitlements.
Under the current CAP reform proposals, entitlements leased out under a Private Contract Lease Clause (PCC) will be lost both to the owner and the active farmer claiming them, unless the owner had claimed one or more entitlements in their own right in 2013, the reference year for entitlements.
Up to €25m of entitlements are leased every year in Ireland. In approximately half of these cases, the owners of the entitlements only leased part of their entitlements, ensuring that the farmer claimed at least one entitlement in their own right in 2013.
This leaves €12-13m of entitlements in danger of being lost in the new CAP. Farmers who leased their entire farms and entitlements into companies will take comfort from predictions from Tipperary-based agricultural consultant Tom Dawson.
"My understanding is that companies set up by the farmer who owned the entitlements won't be affected," he said.
"But it is still unclear as to whether the new entitlements will be assigned to the farmer or the company."
Both the ICMSA and IFA warned that farmers faced major financial losses unless the situation was rectified. Both organisations said the issue had the potential to seriously undermine confidence in the land and entitlements leasing market.