Farmers Journal CAP meeting: Peter Young
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This document summarizes key points from CAP meetings for Irish farmers. It outlines the amounts allocated to Pillar 1 and Pillar 2 payments, and how the linear reduction will impact entitlement values from 2013 to 2014. It stresses the importance of 2013 for setting allocation rights and the maximum entitlements that can be established in 2015. It also explains the impact of convergence on payment amounts and identifies different groups that will gain, stay the same, or lose payments under the new system. The document provides recommendations for farmers regarding leased entitlements, eligible land submissions, and investment decisions in light of the CAP reforms.
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Farmers Journal CAP meeting: Peter Young
- 2. Irish Farmers Journal CAP meetings • Five key points to take home 1. The pots of money 2. The impact of linear reduction 3. The importance of years 4. The new payment 5. The impact of convergence • Do’s and don’ts of the new system
- 3. 1. The pots of money €1,216,000,000 €580,000,000 €99,500,000 €0 €200,000,000 €400,000,000 €600,000,000 €800,000,000 €1,000,000,000 €1,200,000,000 €1,400,000,000 Pillar 1 Pillar 2 Farm assist
- 5. 2. Impact of linear reduction
- 6. Shrink to fit Linear Reduction Gross Payment Claim in 2013 Impact of Linear Cut on 2014 entitlement values No SFP claim in 2013 All entitlements subject to linear cut €0 - €5000 Only unused entitlements cut €5001- €5586 Brought down to €5,000 (unused still cut) > €5586 All entitlements subject to linear cut of 10.49% • Exemption applies where gross payment claim is no greater than €5000 and only to entitlements utilised in 2013
- 7. Linear cut to entitlements (if over €5,865 in 2013) 2013 entitlement value2014 entitlement value €100 €89.5 €200 €179.0 €300 €268.5 €400 €358.0 €500 €447.6 €600 €537.1 €700 €626.6 €800 €716.1
- 8. 3 - The importance of years • 2013 - Key year in reforms – Sets allocation right – automatic entry • Scottish derogation, fruit and veg, national reserve, buy entitlements in 2016 – Sets maximum number of entitlements you can establish in 2015 • Extra land in 2014 or 2015 not taken into account
- 9. The importance of years • 2014 – value of entitlements held • Benefits – Farmers with more entitlements than land – Farmers that lost land though LIPIS review – Dept – easier to calculate in 2014 • 100% leased entitlements? – Other option - money automatically went to active farmer • Deadline 15 May to transfer permanently • Tax implications (assume the worst)
- 10. The importance of years • 2015 – Need to be active (even if retired) • 1 ha with 1 entitlement worth over €100 – PCC if leasing or selling land and entitlements – Consider reducing number of entitlements established • Increase value/ha vs increase options
- 11. 4 - The new payment
- 13. Basic payment - National average • National average = €171 – (2019 BPS ceiling/2015 hectares) – ( €1.216bn/4.83m ha) • 90% National average = €153.90 • 60% National average = €102.50
- 14. 5 – The impact of convergence
- 16. Impact on convergence (Teagasc) 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 Dairy Mixed Livestock Tillage Cattle Rearing CattleOther Sheep Other Gainsfrom convergence No change from convergence Loses from convergence
- 17. • Accelerated gainers <€136 • Gainers €136-€263 • Static €263-€292 • Loser €292 - €1150 • Accelerated losers - > €1150 • Left outside the gate - €0 – Fruit and veg – Scottish – National reserve Six different groups - based on 2013 entitlement values
- 19. Do’s for CAP reforms • 100% leased entitlements - Permanently transfer entitlements to active farmer by May 15 2014 if you leased them out 100% in 2013 • Eligible land - Make sure you just submit eligible land in 2014 and especially in 2015 • Online - use online to submit SFP especially if you are arable farmer forced into crop diversification • National reserve - Get educated if you are young farmer or new entrant • Make good investment decisions – Consider buying entitlements in 2014 if you have naked land and money on deposit (get advice) • Rented land - Look at the option of dropping land in 2015 to consolidate your entitlements
- 20. Don’ts for CAP reform • Make bad investment decisions – Increase entitlements values held in 2014 without looking at tax implications • Buy entitlement in 2014 if you could potentially get the Scottish derogation • Lose entitlements to national reserve under no rotation (2015 on- Leasing without land option) • Farm just for premiums –CAP budget will not get bigger and inflation alone reduces it each year. Farm system has to make a profit.