Department of Agriculture's slides from the Farmers Journal CAP meetings. With the key decisions on CAP reforms now in place, how the new system will work is becoming clear. In this series of CAP meetings, the Irish Farmers Journal is aiming to provide farmers with information on all aspects of CAP and how it will impact your direct payments for the next six years.

2. 1. Progress to date
2. Features of new Direct Payments scheme
3. Basic Payments scheme
4. Calculation of number + value entitlements
5. Internal convergence
6. Transfer of Entitlements
7. Private Contract Clause
8. Young Farmer Scheme
9. National Reserve
10. Greening

3.  June 2013: EU Agreement
 July 2013: Consultation process
 Schemes to be implemented
 Conditions of each scheme
 Model of Convergence under Basic Payment Scheme
 January 2014: Shape of Direct Payments

4.  All existing entitlements expire 31 December 2014
 Irelands Net National Ceiling reduced from €1.255 Billion to €1.216
Billion
 Modulation deduction no longer applies
 A linear reduction of 10.49% will apply to entitlements to bring their
total value into line with 2014 ceiling. This reduction will be viewable
on the SPS preprint and INET. Not applicable to farmers with SPS
payment claim in 2013 of less than €5000
Final Year of Single Payment Scheme 2014

6.  Ireland will also implement:
◦ Greening
◦ Young Farmers Scheme
◦ Coupled Support for Protein Crops (rate to be decided)
◦ National Reserve
Single Payment Scheme Basic Payment Schemereplaced by

7. National Reserve

8. *minor adjustments to allow for Protein Support
Scheme
% National
Ceiling
Amount
Greening 30% €364,500,900.00
Young Farmers Scheme 2% €24,300,060.00
Balance 68% €826,202,040.00
National Reserve 3% of Balance
(first year only)
€24,786,061.20
2015 Basic Payment Scheme €801,415,978.8
*Approximately 60% of 2014 SPS ceiling carried forward to 2015

10. Similarities Differences
 Uses entitlements
 Annual application process
 Declare eligible land
 One hectare per entitlement
 Entitlements transferrable
 Establishment of National
Reserve
 Entitlements subject to
convergence: value will change
from year to year
 No Consolidation
 No ‘rotation’ of entitlements

11.  Entitlements allocated to
‘active farmers’ only
‘Definition of Active Farmer’
1. Farmer: rearing, growing, harvesting,
milking, keeping animals or
2. Maintaining land in good agricultural
and environmental condition or
3. Minimum Activity on marginal land (* to
be defined)
‘Definition of Active Farmer’
1. Farmer: rearing, growing, harvesting,
milking, keeping animals or
2. Maintaining land in good agricultural
and environmental condition or
3. Minimum Activity on marginal land (* to
be defined)

12. Other Categories to establish allocation
right.
 2013 ‘Gateway’ Clause
 farmers who receive a direct payment in 2013 (single payment scheme, grassland sheep
scheme, Burren Life, or Beef Data Programme) have an automatic ‘allocation right’
Scottish Derogation
(Non-Entitlement Holder)
 Never held entitlements
(owned or leased) including
in 2014
 actively farming in 2013
 Evidence of production in
2013
 Objective criteria will be
applied
Fruit and Vegetable
Growers
 No ‘allocation right’
 produced fruit or
vegetables in 2013
 Minimum area may
apply
National Reserve
Priority given to;
 Young Farmers
 New Entrants to farming
 (see National Reserve)

13. Number of eligible hectares
declared in 2013 or 2015
whichever is lower
2015 Number of Entitlements
 Additional land in 2014 or 2015 will have no impact on number of
entitlements
 Less land in 2015 compared to 2013 will reduce number of
entitlements

14. Allocation Right15 May 2013
15 May 2014
15 May 2015
Allocation Right
1st
Land
Reference
Value
2nd
Land
Reference
50 hectares
50 hectares
No. Of Entitlements = 50

15. Allocation Right15 May 2013
15 May 2014
15 May 2015
Allocation Right
1st
Land
Reference
Value
2nd
Land
Reference
50 hectares
40 hectares
No. Of Entitlements = 40

16. Allocation Right15 May 2013
15 May 2014
15 May 2015
Allocation Right
1st
Land
Reference
Value
2nd
Land
Reference
50 hectares
60 hectares
No. Of Entitlements = 50

17. Fixed Percentage of 2014 Value of
Entitlements Owned* (and GLS)
Total Value in 2015
 €9,000 (SPS Entitlements) + €1,000 (GLS)
 €10,000 x 60% = €6,000

18. All farmers allocated an Initial Unit Value in 2015
Total Value of Entitlements (€6000) Initial Unit Value
Number of Entitlements (50) (€120)

19. Status in 2013 Buy Entitlements
in 2014?
Comments
2013 Allocation right
(SPS, GLS, Burren, BDP)
Optional Will increase Initial Unit Value:
increases impact of
convergence; could cover
surplus land
Scottish Derogation
(Non-entitlement holder)
No To hold entitlements in 2014
would disqualify from
allocation in 2015
Fruit and vegetable Optional Would give a 2014 ‘value’ if
none held
YF or NE with allocation
right
Optional But would reduce/negate
allocation from Reserve
YF or NE with no
allocation right
No Entitlements would not carry
forward

21.  National Average
 90% National Average
 Minimum Value of 60%
◦ (by 2019)
(Transfer of €103m)
 High Initial Unit Value
 Low Initial Unit Value
The value of entitlements changes from year to year
€60
€170.87
€153.79
€93.79/3 = 31.26
€102.52

22.  By 2019, all low value entitlements must reach at least 60% of
national average entitlement value (estimate of €102.52)
 2019 BPS ceiling National Average
2015 Eligible hectares (estimated €170.87)
 Cannot be calculated until 2015
 In 2019 no farmer will receive payment per hectare (BPS &
Greening) over €700 per hectare (max. of €481 per entitlement)

23. • *National average = €170.87 (€248.58 with Greening)
(2019 BPS ceiling/2015 hectares)
• 90% National average = €153.79 (€223.74 with
Greening)
• 60% National average = €102.52 (€149.15 with
Greening)
Farmer A
(low value)
Farmer B
(high value)
2014 Unit Value €80.00 €700.00
Initial Unit Value €47.54 €415.94
2015 Value €58.53 (€85.15) €397.46 (€578.23)
2016 Value €69.53 (€101.15) €377.64 (€549.38)
2017 Value €80.53 (€117.16) €357.77 (€520.52)
2018 Value €91.53 (€133.16) €338.93 (€496.11)
2019 Value €102.52 (€149.16) €320.09 (€465.69)
*National average is estimated

24. No ‘rotation’ of usage; entitlements
will revert if unused for two
consecutive years
 2015: restricted to inheritance, gift,
merger, scission, admin transfer
 sale and lease by PCC.
 Submitted by closing date 2015
 No trading of new entitlements in 2015
by sale or lease
From 2016
 Entitlements transferrable
 Includes transfer by lease ‘with or
without land’
 No ‘clawback’ on transfers

26. Event Land Process
Inheritance With land Step into shoes
Gift With land Step into shoes
Admin Transfer With/without land Step into shoes
Partnership At least one party with
land
No impact on number and
value
Change of legal
entity
At least one party with
land
No impact on number and
value
Scission At least one party with
land
No impact on number and
value
Sale (after 15 May
2014)
With land Private Contract Clause
Lease With land Private Contract Clause
1. ‘Allocation right’ and ‘land reference’ accompany the land
2. ‘Value’ accompanies the entitlements

27. The Transferor The Transferee
 Must hold Allocation right
◦ and
 Must be ‘active farmer’ in 2015
◦ and
 Must apply for and establish
entitlements in 2015
◦ and
 (to fulfill these criteria should
retain at least one hectare and
one entitlements)
 Must be ‘active farmer’
 and
 Must submit a BPS
application in 2015 and
declare land
 and
 Must submit a PCC
application (with lessor)

28.  Lease commenced prior to 2013 and continues to 2016 or later
 Lessor holds ‘allocation right’ and establishes entitlements in 2015:
lessee ‘active’ in 2015
 Eligible to enter into PCC agreement to continue leasing
arrangement
 entitlements established in account of lessor
 value and convergence path dependent on lessor’s reference points
(land & 2014 value)

29.  Land transferred to buyer before closing date for 2015
 PCC submitted; land and corresponding BPS entitlements
transferred to buyer
 Seller holds ‘allocation right’ and establishes entitlements in 2015;
buyer ‘active’ in 2015
 entitlements established in account of seller and then transferred to
buyer
 value and convergence path dependent on seller’s reference points
(land & 2014 value)

30. Land and SPS Entitlements transferred to buyer in March
2014
Value of entitlements will carry forward to buyer’s ‘value’ in
2015
Land will not be taken into account in 2015 for buyer (or
the seller) (due to lesser of 2013/2015 rule)
PCC not recommended in this scenario

31. The Problem The Solution
 Owner must hold ‘allocation right’
and must establish entitlements in
2015
 100% lessors in 2013; no
‘allocation right
 Value of entitlements leased out in
2014 may only assigned to owner
(lessor) as only definitively held
entitlements may be used for
calculation of unit value.
 Neither lessor nor lessee can carry
forward value
 Danger of loss of value of
entitlements
 Entitlements should be
transferred permanently in 2014
 Ideally to existing lessee who
holds the land
 Or to any person with an
allocation right
 Requires agreement of both
parties to existing lease
 Letters will issue to all farmers
affected next week.

33.  ‘Young farmer’ status
 Eligibility for;
 National Reserve
 Young Farmers Scheme
 Aged 40 or less in first year
of BPS application
 Established holding within
previous 5 years
 Agricultural Qualification
(FETAC Level 6)

34. Groups Conditions
 Joint herdnumber
 Partnership
 Company
 At least one person must meet definition
of ‘young farmer’
 Must declare that effective control of
decision making power lies with young
farmer – declaration on application form
 ‘Five years’ dates from when young
farmer takes such control.
 Payment ceases when young farmer no
longer in control

35. Scheme details The Payment
 Additional payment for young
farmers
 maximum of five years of payment
 ‘Five years’ dates from set-up of
holding by young person
 (2015 is optimum year for establishing)
 Legal entity eligible for payment if
meets definition of ‘young farmer’
 25% of national average payment per
hectare
 Payment on maximum of 50
entitlements

37. Details Reserve Uses
 Allocation to ‘Active farmers’
 Funded by 3% of BPS ceiling in
2015
 Replenished from unused
entitlements
 May allocate new entitlements or
give ‘top-up’ to existing
entitlements
 Allocation based on BPS national
 Priority for;
1. Young Farmers (as defined under YFS)
2. New Entrants
 commencing in 2013 or later
 Must apply to BPS within two years of
commencing
 Agricultural qualification at FETAC
level 6
 Other criteria, e.g. Off-farm income
and a limit.

39.  All farmers subject to greening
 Crop Diversification
 Permanent grassland
 Ecological focus area (EFA)

40. Arable hectares Minimum
Number of
Crops
Percentage
Less than 10 ha No obligation
10 to 30 ha 2 Main crop not more than 75% of
arable land
More than 30 ha 3 Main crop not more than 75%
Two main crops not more than
95%
Definition of ‘Crop’ includes;
 land lying fallow
 grasses or other herbaceous forage
 Winter crop
 Spring crop

41. National level Farmer Level
 Managed at national level
 Ratio of permanent grassland
shall not decrease by more than
5% compared with 2012
 Protection of grassland in areas
covered by Directives on Natural
Habitats and Wild Birds
 Conversion to forestry exempted
 If 5% ratio breached, MS shall
oblige farmers to reconvert
land back to grassland

42.  Fallow
 Terraces
 Landscape features (including
features adjacent to arable land)
 Buffer strips (including strips adjacent to
arable land)
 Agro-forestry
 Afforested areas
 Catch crops or green cover
 Areas with Nitrogen fixing crop
 Weighting and Conversion
Matrix
 15 ha arable land
 (37.06 acres)
5% of arable allocated to EFA
(2017 review: possible 7%)

43.  75% of eligible land is
grassland, used for production of
grasses or other herbaecous
forage or fallow land, provided
remaining arable land not more
than 30 ha.
 75% of arable land is used for
production of grasses or other
herbaceous forage or fallow land,
provided remaining arable land
not more than 30 hectares
 Land farmed organically

44.  Telephone: 0761 064438
 Email: CAPdirectpayments@agriculture.gov.ie
Thank you for your attention