Download - Farmers Journal CAP meeting: Peter Young
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Irish Farmers Journal CAP meetings
• Five key points to take home 1. The pots of money 2. The impact of linear reduction3. The importance of years 4. The new payment5. The impact of convergence
• Do’s and don’ts of the new system
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1. The pots of money
Pillar 1 Pillar 2 Farm assist €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€1,216,000,000
€580,000,000
€99,500,000
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Maximising pillar 2
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2. Impact of linear reduction
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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
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Linear cut to entitlements (if over €5,865 in 2013)
2013 entitlement value 2014 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
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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
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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)
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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
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4 - The new payment
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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
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5 – The impact of convergence
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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
Cattle Other Sheep Other
Gains from convergence No change from convergence Loses from convergence
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• 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
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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
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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.