Farm Ireland

Wednesday 24 January 2018

Rush for land in run up to 2014 'is farming and financial suicide'

Darragh McCullough

Darragh McCullough

The rush by farmers to maximise their EU payments when a new regime kicks off in 2014 is threatening their very viability, according to agricultural experts.

Already reports are circulating that conacre and lease rates have jumped by 30pc since the EU announced that 2014 would be a new reference year. The amount of land farmed by individuals during this period will form the basis of their Single Farm Payments for the following five years.

While a lot of conacre made €150/ac last year, it appears that farmers are willing to bid closer to €200/ac for the same parcels this year, with up to €250 being occasionally reported. Leases have also increased in value, with one leasee prepared to pay €180/ac up front for three years rent.

However, the Agricultural Consultants' Association president, Pat Minnock, says that these rates represent both "farming and financial suicide" for most farmers.

"These guys forget that there will be no option to stack or consolidate the payments after 2014," said Mr Minnock. "So if they make a loss trying to maximise their holding for 2014 and still end up giving the land up again during the subsequent years, they will also lose the entitlements that went with that land."

The fresh start to the farm payment regime in 2014 will also open the door to over one million acres of farm-land that have no entitlements currently attached to come into the Single Farm Payment system. Depending on how much of this land is submitted for the Single Farm Payment in 2014, it could dilute payments to farmers by up to 3.5pc.

In addition, Mr Minnock also believes that there will be a "flood" of force majeure cases before the Department of Agriculture's appeals committee on foot of the proposed measures. "It won't be just the obvious cases such as young farmers who start farming between now and 2014," said Mr Minnock. "What about all the farmers who incorporated this year? It'll be their farming companies that will be claiming the SFP next year but, because the company wasn't claiming entitlements in 2011, they won't be eligible for anything in 2014."

Strong returns encouraged up to 1,000 farmers to incorporate their farming enterprises during the last 12 months, according to IFAC's Declan McEvoy. "I wouldn't be surprised if there was another 1,000 farmers very close to making the change," he said.

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