Entitlement trading update – RPA online transfer screen opens
2018 Entitlement trading has begun in earnest, with a marked increase in interest from buyers following Michael Gove’s speech at the Oxford Farming Conference on the 4th January where he set out the Government’s intention that farmers would continue to receive BPS payments in the same way during the term of this government (2022), and in questions he suggested it could remain the same until 2024 (albeit with a possibly increasing cap likely to be introduced on the bigger claimants). This is intended to give a long lead in to any new UK agricultural policy following Brexit to give landowners/farmers time to adjust their thinking/business plans to the eventual introduction of payments based on environmental benefits or “public goods” on their holdings. Mr Gove guaranteed also that BPS payments will continue in 2019 exactly as for 2018 before the five-year transitional period starts.
The Non-SDA sale price dropped as low as £140 per ha plus VAT before Christmas (with some other agents reporting sales at £120-130 plus VAT), however since the New Year demand has been stronger, and Non-SDA entitlements are currently trading steadily at £150 plus VAT. We expect this interest to be further boosted now the RPA has made the Entitlement Transfer screen live unusually early, as they have now paid the bulk of the 2017 BPS claims. If demand increases, as farming businesses and their agents should now have confidence in investing in entitlements now Mr Gove has confirmed they will have a life beyond the expected 2019 payment, this price could now rise.
SDA entitlements remain in short supply, and early sales achieved £175 plus VAT, however again, this price is expected to rise as demand outstrips supply. Moorland entitlements are also proving to be difficult to source for prospective purchasers, and with already strong demand, sale prices are expected to start at around £50-55 per ha plus VAT.
We have also started to trade Scottish Entitlements at face value for Region 1 entitlements (where there is still an historic element to the payment, plus a 30% siphon in the value of the entitlements in the first year of payment). All Scottish entitlements will be reaching a flat rate payment per ha by 2019, which it is suggested may be around £160 per ha, excluding greening. The trading deadline is the 2nd April.
There is no trade as yet in Welsh or Northern Irish entitlements despite interest. We expect sale prices to start at a multiple of between 0.8 and 1.2 of face value with a trading deadline of the 30th April.
If you would like to discuss your entitlements, or wish to buy or sell, please contact Julia Clark for English entitlements, or Jake Loftus for Scottish, Welsh or Northern Irish entitlements.
Trading to date