Basic Payment Scheme Entitlements

Bernie Brennan

Entitlement Reference Points• Eligible to receive a direct

payment of €100 or more in 2013 (single payment scheme, grassland sheep scheme, Burren Life, or Beef Data Programme)

• Eligible land declared in 2013

• Value of Entitlements owned in 2014 (including entitlements leased out) plus value of 2014 Grassland Sheep Scheme

• Eligible land declared in 2015

• *The number of entitlements is established by using the lesser of the eligible hectares declared in 2013 or 2015

2013 Allocation Right

*2013 Land Reference

2014 Value Reference(a fixed % of this value will be carried forward)

*2015 Land Reference

Convergence of Entitlements

• National Average• 90% National Average

• Minimum Value of 60%– (by 2019)

(Transfer of €115m)

• High Initial Unit Value

• Low Initial Unit Value

*€171.82

*€154.64

*€103.09

*estimated values based on 2013 data

Provisional Statement• 120,000 statements have issued• Based on 2013 land and 2014 value• Values are estimated (national average)• Leased land included; but not leased in value

of entitlements. PCC to continue lease of entitlements with land.

• Gift/Inheritance in 2014: (5,000 letters issued) Provisional Statement will issue shortly for these cases.

• Final Statement will issue in March 2016

Review of Allocation Process

• 2013 land2014 value

• Partnerships in 2013 review required to identify land and value for each partner (Provisional Statement and letter will issue shortly)

• Restricted to those who believe 2013/2014 data inaccurate

• Online or Paper form

National Reserve &

Young Farmers Scheme

Young Farmers

Defining ‘Young Farmer’

40 or less in year of applicationEstablished within five years

FETAC level 6

Defining ‘Young Farmer’

40 or less in year of applicationEstablished within five years

FETAC level 6

Young Farmers

Defining ‘Young Farmer’

40 or less in year of applicationEstablished within five years

FETAC level 6

National Reserve

• Allocate on naked land• Increase value• maximum of 90• Off-farm income: €40,000

National Reserve

• Allocate on naked land• Increase value of entitlements• maximum of 90• Off-farm income: €40,000

Young Farmers

Defining ‘Young Farmer’

40 or less in 2015Established within five years

FETAC level 6

Young Farmer’s Scheme

• Additional payment• Maximum of five years• Flat rate payment• Paid on entitlements activated;• Maximum of 50

National Reserve

• Allocate on naked land• Increase value of entitlements• maximum of 90• Off-farm income: €40,000

Defining ‘Young Farmer’

40 or less in year of applicationEstablished within five years

FETAC level 6

Young Farmers

Defining ‘Young Farmer’

40 or less in 2015Established within five years

FETAC level 6

Defining ‘New Entrant’

Establish in 2013 or laterFETAC Level 6

Young Farmer’s Scheme

• Additional payment• Maximum of five years• maximum of 50

National Reserve

• Allocate on naked land• Increase value• maximum of 90• Off-farm income: €40,000

National Reserve

• Allocate on naked land• Increase value of entitlements• maximum of 90• Off-farm income: €40,000

Young Farmer’s Scheme

• Additional payment• Maximum of five years• Flat rate payment• Paid on entitlements activated;• Maximum of 50

Defining ‘Young Farmer’

40 or less in year of applicationEstablished within five years

FETAC level 6

Defining ‘Young farmer’ ‘ New Entrant’ in Groups

• Joint herdnumber

• Partnership

• Company

• At least one person must meet definition of ‘young farmer’

• Must declare that effective control of decision making power lies solely or jointly with young farmer – and provide supporting evidence

– Name on herdnumber– Name on Entitlements– Name on bank account– Legal declaration signed by all parties

– New Entrant in group- All members of group/ partnership/ company must be new entrants

National Reserve - Categories Young Farmers New Entrant

Aged 40 or less in first year of BPS application

Established the holding during the 5 years preceding the first submission of a BPS application

Agricultural Qualification (FETAC Level 6).

Has off farm income no greater than €40,000

Maximum allocation 90 hectares

No age restriction on applicants

Commencing in 2013 or later and must apply to BPS within two years of commencing

Agricultural qualification at FETAC level 6.

Has off farm income no greater than €40,000

Maximum allocation 90 hectares

National Reserve – Optional Categories Old Young Farmer

Aged 40 or less in first year of BPS application

Established the holding during 2008/2009

Agricultural Qualification (FETAC Level 6).

Has off farm income no greater than €40,000

Maximum allocation 90 hectares

Others options under considerationIncluding Force Majeure (clarification awaited from Commission)

Application form available in April

Closing date of 15 May

If National Reserve over subscribed, reduction coefficients may be applied

Threshold Joint Venture Company Registered Partnership

Young Farmers Scheme

Based on Entitlements activated by joint venture; maximum of 50

Based on entitlements activated by company; maximum of 50

Entitlements activated by young farmer; maximum of 50

Balance may be redistributed to other partners

National Reserve Allocation

Maximum of 90 for the joint venture. All entitlements below national average eligible for top up .

Maximum of 90 for the company

Maximum of 90 for the Partnership. Allocation to young farmer (s) only based on land declared by young farmer(s). Does not extend to other land.

NR Income Limit (€40,000)

Combined income of individuals

Off-farm income of Company and directors

Off-farm income of young farmer only

*Partnership using one herdnumber treated in same way as Joint Venture

Partnerships Each partner brings own reference points

Separate set of entitlements established for each partner

Each set retains own identity, convergence path, etc.

Partnerships can also operate under 1 herdnumber eg MPPs. However is treated as joint venture for Pillar 1 schemes.

In all cases partnerships can benefit from Young Farmers Scheme

In all cases, only one threshold applies to the Partnership for National Reserve and Young Farmer Scheme.

Must apply on line for BPS application in 2015

Land eligible for National Reserve

Change to Holding

• Reduction in size of holding

• Transfer of 2013 owned land without transfer of entitlements

• Loss of leased/rented land since 2013

• Farmers must declare all land available to them in 2015

Result 2013/2015 Rule applies

Land not available for NR

Land available for NR

Land farmed 2013/2014 and 2016???

Circumvention Clause Article 60 of Regulation 1306:

Without prejudice to specific provisions no advantage provided for under sectoral agricultural legislation shall be granted in favour of a natural or legal person in respect of whom it is established that the conditions required for obtaining such advantages were created artificially, contrary to the objectives of that legislation

EU Regulations require that all National Reserve applications be examined individually

z

Administrative and on-farm inspections on all Schemes including National Reserve and Young Farmers Scheme

Windfall profit Art 28 of 1307, ...where the increase would lead to windfall profit for the farmer concerned....

Scottish Derogation

• Farmers who farmed in the Beef, Sheep, Arable or Dairy sectors on 15th May 2013 and who never held (either owned or leased in) Single Payment Entitlements

• 2013/2015 rule applies• Entitlements allocated at base unit value

increasing to 60% of National Average by 2019 • Applications available in early April

Transfer of Allocation Right & Value

What is transferrable

• Allocation Right:

An Allocation Right established in 2013 is the right to be allocated one entitlement on one hectare of eligible land under the Basic Payment Scheme in 2015.

• Reference Value

The total value of entitlements owned (held or leased out) by a farmer under the Single Payment Scheme in 2014, and where relevant the value of payment received under the Grassland Sheep Scheme in 2014

Changes during Transition

15 May 2013: Farmer establishes Allocation Right

15May 2014: farmer establishes Reference Value

15May 2015: second ‘land’ test: Establishes Entitlements

2014 Scheme year • Allocation Right automatically transfers for certain

types of transfers that were submitted under the 2014 Scheme i.e. change of registration detailschange of legal entitymergers/scissions

• 2014 Gift /Inh letters issued to establish if land wastransferred with entitlements to enable transfer of allocation right

• PCC required to continue leasing of land & entitlements

2015 Methods of Transfer(Transfer of Allocation Right and Reference Value application form to be submitted)

Original Farmer

Process New Farmer

Sole Trader Change of legal entity

Company AR (and value) of each sole trader added together

Farmer Change of Registration details

New Farmer + farmer

AR (and value) of original farmer transferred to new farmer

Separate farmers

Merger One entity The AR(and value) held by each original farmer will retain original identity; two or more sets

One entity Scission Two or more farmers

The AR(and value) held by the original holding must be divided between the new holdings

2015 Transfer by Gift/Inheritance

Original Farmerpp

Process New Farmer

Farmer Gift New Farmer AR (and value) of original farmer transferred with the land

Farmer Inheritance New Farmer AR (and value) of deceased farmer transferred to beneficiary of the land. 2015 Transfer of Allocation Right and reference value application form to be submitted

Transfer by Sale/Lease• Sales and Leases processed by PCCOriginal Farmer

Process

Type 1 PCC Lease of Land and Entitlements

2013-2015 PCC allows for the leased land & entitlements to be included in the calculation of the transferors account and then transferred across to the lessee for period of lease agreement and returned at end of lease

Type 2 PCC Sale of Land and Entitlements

2015 scheme year

PCC allows for the inclusion of the land sold in the calculation of the sellers entitlements, these entitlements will then be transferred permanently to the account of the buyer

Type 3 PCC Lease/sale of land with Allocation Right

2013-2015 PCC Type 3 allows for transfer of Allocation Right with land.Transferee must have no existing Allocation Right

Conditions for using Private Contract Clause

The Transferor The Transferee

• Must hold Allocation right– and

• Must be ‘active farmer’ in 2015 (at least 1 hectare)– and

• Must submit a BPS application under the 2015 scheme year

• Must be ‘active farmer’• and

• Must submit a BPS application in 2015 and declare land

• and

• Must submit a PCC application (with lessor)

• Standard PCC form is available on Department Website

Clawback

• Sale of entitlements without land

• 50% clawback in 2016

• Not relevant to 2015

What Next?

• Closing date Phase 1 of NR and YFS: 31 March• Opening of Phase 2 of NR: 1 April• Closing date of all applications: 15 May– All supporting documentation must be submitted (late

penalties of 4% per day will apply)• May to October: Processing of NR, YFS, PCC, Transfer, Scottish

Derogation applications• Young Farmers Scheme payments commence in December

Thank You