It has been interesting to muse on how any new scheme expected to start in 2015 will differ across the UK. We may see England with rolling on entitlements, but the Welsh, Scottish and Northern Irish having a reallocation under a scheme similar to the existing English system, where there is a historic and flat rate element, with the historic element being phased out during the life of the new scheme. If you would like a copy of our factsheets for the regional predicted payments and how the different regional schemes compare or may in the future, please contact us. We are finding it is important for those who claim in more than one region to have comprehensive advice. We are currently involved in a case where two regions do not agree on the interpretation of part of the EU legislation relating to the Single Payment Scheme. There are also different rules applying for “dual use” in the regions, and different systems for naked acre lettings.
Farmers Guardian – 07.12.12 – The Single Farm Payment
The uncertainty continues but as expected, with MEPs delaying decisions on the CAP reform, whilst not yet officially announced, practically it can be assumed that the current Single Payment Scheme will continue to the end of 2014 at least. With the “default setting” for the 2013 EU budgets if nothing otherwise is agreed, hopefully we are looking at the same agricultural budget for 2013, with modulation being no higher than in 2012. However no-one is yet in a position to confirm exactly what the Euro value of the SPS will be for 2013, and this, combined with the official uncertainty as to the length of the current scheme has seen the entitlement market kicking off 10% lower than last year, with lower volumes traded. We suspect however this will change once the 2012 SPS payments start coming out in December, and it is too late to be trying to drill late winter cereals.
We are often asked how much entitlement trade there is every year, and over recent years this has undoubtedly increased from our view point, most likely reflecting the increased activity of farming businesses and the number of changing tenancies. From early indications we feel there is much, if not more, interest this year, as other indicators suggest the pace of change has not declined, and as always there is a steady flow of land that has not been claimed on before entering the system, increasing demand for a finite number of entitlements in each region. Recent comments from Brussels which would support Member States with flat rate payments “rolling on” existing entitlement ownership, rather than applying a new allocation process, has already sparked additional interest in entitlements in England. Any further such comments, we believe, will increase prices. Last year English Non-SDA entitlement sale prices averaged £230 per ha, but peaked at £250. Currently we are seeing prices at between £210 and £220, with higher prices for smaller lots below 10 ha, hitting £255 per ha for non-VAT vendors.
With the chance now of existing English entitlements having added value if rolled into the next scheme, there is also renewed interest in naked acre letting, which also offers tenants the opportunity of producing a similar amount of money from their entitlements over the remaining two years of the current scheme, as selling them. Also there is a slim chance that there may be an alternative benefit, if subsequently there is a reallocation, if a farmer has been claiming Single Payment on a larger land area, or any, in 2013 and 2014 which may help with the “golden ticket” proposal. On top of this it also ensures you do not miss out, should entitlements be “rolled over” into the new scheme, on the opportunity of continuing to claim them with naked acres, or selling them. English SDA entitlement sales have kicked off at £180 per ha, SDA Moorland at £30 per ha. The Welsh market has started with a multiplier of just over one times the Euro value, with Scotland at up to 1.25 times the Euro value for average lot sizes. The Northern Irish market has not yet got going.
Naked Acre rentals for 2013 in England are currently running at £50-60 per acre for Non-SDA, SDA are expected to be around £40 per acre with SDA Moorland at £4 per acre, Welsh at £35-40 per acre and Scottish at £4 per acre.