This Tuesday saw the end of the first entitlement transfer window for the 2015 Scheme Year.  The preceding period was a somewhat uncertain and frantic scramble for vendors looking to offload their surplus entitlements prior to the 21st October, to a substantially smaller number of purchasers.  Overall trade has been extremely busy, especially for this time of year, and we set out below a summary of the season up to the 21st October, together with some ‘what next?’ options moving forward.



The increase in the minimum claim area from one hectare to five hectares has had a substantial impact on the Non-SDA market this season.  Those claimants with fewer than five entitlements and no prospect of obtaining additional land before the first Basic Payment Scheme (BPS) claim in May 2015 (predicted) added to an already oversupplied market.  As the news that they would no longer be able to claim filtered through the farming, and other, press, large numbers of vendors in this position came to the market.  The first transfers were arranged at the beginning of May at the £140 per hectare level ahead of this news filtering through, however once this announcement was made the prospects for the coming period were a little uncertain. Many were of the opinion that the market would soon become saturated with these smaller blocks of entitlements, combined with larger blocks from institutional claimants falling within the new EU ‘negative list’ of entities that will not be able to claim unless they can demonstrate viable agricultural practices (e.g. golf courses, airports, estate agents).  It was also apparent that large numbers of entitlements were coming to the market from claimants who had been rotating surplus entitlements for many years, following land losses.


Initially the smaller blocks did not come to the market in any great quantity, and prices began at £140/ha in May, rising to £155/ha by the start of August, with a season high of £170/ha during this period.  However as greater numbers of entitlements came onto the market, particularly following DEFRA correspondence to claimants under five hectares regarding the increase in minimum claim, we saw the price decline slightly to between £130 and £140 per hectare by mid-September.  Prices in the following weeks remained within this range, dipping a little to £125/ha for larger blocks in the 50ha plus range. 


As the season progressed however and purchasers became well aware of the surplus of entitlements, many began to push for a ‘bargain’.  Some purchasers who made sensible lower offers, i.e. not opting to offer sub £100/ha, were successful, however very few sales were agreed below £110/ha.  Vendors, despite the surplus, were not willing to go below this level, and rightly so considering the second trading window is still available and it will be interesting to see what prices do between now and mid-January 2015.  There remain a good number of vendors with large and small blocks of entitlements, who will need to register on the CAP Information Service (CAPIS) if they wish to sell their entitlements before the next deadline, which is expected to be the 2nd April 2015 or slightly later.  The question at present is whether those with smaller blocks will take the time to go through this process for relatively little reward for their efforts.  No doubt some will, however the CAPIS registration barrier may well prove too much of a burden for others, meaning that we could see the surplus fall back between now and the New Year.  The effect of this is of course yet to be seen, but it could suggest a steadying of prices and perhaps even a slight rise.


Looking realistically at the current price and the present attitude of vendors, many will find it difficult to consider accepting prices under £100/ha, especially when one considers the returns that are to be had.  Purchasing at the 2015 first window Non-SDA season average of £127.88/ha, produces an estimated return on investment, in 2015 alone, of approximately 45%, therefore one can see why vendors are reluctant to be stripped of their entitlements for these low prices and many are considering other options, such as entitlement leasing, until the price improves.  Many purchasers seem to have forgotten, or been unaware, that vendors do have a second opportunity to sell their entitlements in the New Year, and many were unsuccessful in their bids to argue that vendors would have had to ‘take what they could get’, or else lose their entitlements after the 21st.  This was not the case, as the point at which one loses one’s entitlements will be after claims are submitted on the 15th May 2015 (predicted).


Our results for the 2015 first trading window for Non-SDA entitlements were:  Highest sale price – £170 per hectare (plus VAT); Lowest – £100 per hectare (plus VAT); Average – £127.88 per hectare.



Demand for SDA at the start of the season, which only really began in July, was strong and prices remained, as they were towards the end of last season, higher than Non-SDA on the back of a shortage in supply compared to the Non-SDA market.  The season ‘kicked off’ at £180 per hectare, approximately 22% higher than Non-SDA, which is interesting considering that SDA and Non-SDA payment rates will be aligned from 2015.  This leads to the conclusion that the higher SDA price was purely demand driven.  As the season progressed SDA prices dropped back to circa £155 per hectare as demand dropped off and evened out with supply.  Despite this ‘equivalency’ SDA prices still did not align with Non-SDA.


Overall the SDA market stayed fairly stable over the trading period, with supply and demand on a relatively ‘even keel’ following a slightly undersupplied start.


Our results for the 2015 first trading window for SDA entitlements were:  Highest sale price – £170 per hectare (plus VAT), £180 per hectare (Non VAT Vendor); Lowest – £130 per hectare (plus VAT); Average – £151.06 per hectare.


SDA Moorland


For the majority of this season, from April 2014, the Moorland entitlement market was relatively quiet and despite good demand for Moorland entitlements there were few vendors willing to meet demand at that level.  On this basis trade began late when purchasers began to offer at higher levels in October, and thereafter prices held firm throughout at £55 to £60 per hectare.


Some purchasers were not willing to offer at this level and were left without entitlements as trading closed.  It is not unsurprising that vendors were not willing to accept offers 25% below the market rate, particularly considering the Moorland payment is expected to increase by approximately 37% compared to the 2013 payment of €45.47 per hectare.


Our results for the 2015 first trading window for SDA Moorland were:  Highest sale price – £60 per hectare (plus VAT); Lowest – £55 per hectare (plus VAT); Average – £55.69 per hectare.




As most will now be aware, the second window for transferring entitlements in England will begin in mid-January 2015 and is expected continue until at least the 2nd April as usual.  This may be pushed back as the RPA may not require the normal six weeks processing window as there will be no paper RLE1 forms, as entitlement transfers will be completed online from 2015.


However in the meantime there remain a good number of vendors who were unable to sell their entitlements prior to the 21st October transfer window and who would prefer to agree a sale now rather than wait.  We have therefore devised a mechanism to sell forward entitlements, which entails agreeing the sale prices and quantities now, and effecting the transfer once the new online system (CAPIS) is up and running in January 2015.


All vendors with surplus entitlements they wish to sell will need to register on CAPIS, even if they are not intending or able to claim in 2015.  Those with fewer than five hectares however may consider it is not worth their while going through the registration process, if the returns are not reasonable.


Forward buying will be particularly useful for those farmers and agents looking to source additional entitlements for the 2015 BPS claim in good time, so that they can concentrate on fulfilling greening requirements and coming to terms with the new CAPIS system.  Those interested in either buying or selling entitlements before January 2015 should contact us as soon as possible to register their interest.  Agreements made during this period will become binding on ‘exchange of contracts’ in order to avoid parties reneging due to potential price fluctuations in the New Year.  Those requiring full details of how selling forward will operate should contact Ashley Taylor in the first instance.




With the oversupply of Non-SDA over the past few months demand is now very strong for Non-SDA naked acres.  Landowners and farmers who have more land than entitlements, who have no intention of purchasing entitlements, are advised to contact us as soon as possible in order to benefit from this situation.  Many claimants with surplus entitlements who have either been unsuccessful in finding buyers, or who would prefer to lease out their entitlements rather than sell at the current low prices, are looking for land to activate them on.


From 2015 BPS entitlements can be leased without land, and those with surplus entitlements are currently offering between £40-55 per acre (£99-135 per hectare) for landowners to transfer in the entitlements, using them to make a claim on one’s own land.  This will keep the entitlements ‘live’, rather than the entitlement owner with insufficient land losing them to the National Reserve in 2015.  Details of how these arrangements will work contractually will not be available until the New Year, when we have full details about the BPS and the CAPIS system.  However due to the likely shortage of land available for this option, interested parties are advised to contact us sooner rather than later in order to try and arrange provisional agreements, subject to contract.


This is an interesting new market as one would expect a landowner, without sufficient capital to purchase a ‘full set’ of entitlements to cover their land, to pay a rent lower than the purchase price in order to rent in additional entitlements.  However, the pressure is on entitlement owners to ensure any surplus entitlements are activated in 2015, or they will be lost to the National Reserve.  Therefore it is the entitlement owners who are expected to incur the upfront cost of keeping their entitlements ‘live’ as we move into the BPS.


We currently have demand for in excess of 300ha of naked land for surplus entitlements to be leased or hosted.  Please contact Ashely Taylor for further details.


Once again thank you to all who placed their business with us for this first 2015 transfer window.  We look forward to working with you again in the future.  If you have any queries regarding entitlements, the transition into the Basic Payment Scheme, or indeed on any other rural matters please do not hesitate to contact our team, who are always on hand to provide assistance.


Our historical entitlement price graphs are available on our website, and we will shortly be uploading the latest graphs for the first 2015 trading window.

Hugh Townsend

Hugh Townsend

01392 823935

Ashley Taylor

Ashley Taylor

Julia Clark

Julia Clark

01392 823935