Agriculture
Agriculture & Farm Payments Schemes
BPS ENTITLEMENTS
The Basic Payment Scheme (BPS) payment is based on the number of hectares farmed and the number and value of entitlements held. Farmers receive an allocation of entitlements for their farm under the Basic Payment Scheme. A farmer must declare at least one hectare of eligible farm land for each entitlement to qualify for their full payment. The number of entitlements each farmer holds, and their values, vary depending on various factors such as:
- payment rates received under previous direct payment schemes
- adjustments each year to move values towards the national average
- any allocations received from the National Reserve
- Convergence
- Under the Basic Payment Scheme, there is a process of convergence towards national average entitlement values. The convergence process involves gradually narrowing the width of the band of entitlement values by moving each closer to the average. Lower entitlement values are gradually increased in value, while those above the average gradually decrease.
- Usage rule
- All entitlements must be used at least once every two years. Any entitlement that remains unused for two years in a row will revert to the National Reserve. Please see here for more information on usage of entitlements
Transfer of entitlements
Farmers can choose to transfer entitlements to another farmer. It has been possible for farmers to transfer entitlements since their introduction in 2005. Entitlements are a monetary asset and under the Basic Payment Scheme and they can be transferred with or without land. An increasing number of transfer of entitlement applications have been submitted in each of the years 2015 to 2021.
Transferring entitlements allows farmers to adapt to their individual needs on an annual basis by changing their entitlement position. Transferring entitlements may increase or decrease the number of entitlements held by a farmer, subsequently raising or lowering their payments and ultimately leading them further away from the historic reference points.
Basic Payment Scheme Entitlements may only be transferred to an active farmer in the same member state, except in the case of inheritance or anticipated inheritance (gift). The farmer making the transfer and farmer receiving the transfer must apply to transfer entitlements by completing an online Transfer of Entitlements application.
Types of Transfer
The methods for transferring entitlements are:
- inheritance
- gift
- lease
- sale
- scission (division of an Unregistered Farm Partnership).
- merger (forming an Unregistered Farm Partnership)
- change of Legal Entity
- change of Registration Details of Herd Number
Leased or rented entitlements will revert to the farmer making the transfer at the end of the relevant scheme year – this is not considered a form of transfer. Entitlements may not be transferred more than once in a scheme year, unless by way of inheritance or anticipated inheritance.
Clawback’ rule
If entitlements are sold without land there is a “clawback” of 20% of the number of entitlements sold. For example, if 50 entitlements at €100 each are sold, the buyer would receive 40 entitlements at €100 each. To be considered as a sale of entitlements with land, one hectare of eligible land must be sold per entitlement and that land must be declared on that year’s Basic Payment Scheme application by the farmer receiving the transfer. Entitlements may be leased with or without land.
Transfer dates
The effective date of transfer of entitlements in all cases is the closing date, usually 15 May each year. However, if the entire holding or ownership of a herd number is transferred between the date of application for the Basic Payment Scheme and 31 May, the farmer receiving the transfer must agree to take on the responsibilities of the farmer making the transfer regarding the conditions of the relevant Basic Payment Scheme year by completing a Declaration of Undertaking Form (see below).
The Declaration of Undertaking Form must be completed by both the farmer making the transfer and farmer receiving the transfer and must be submitted online with the Transfer of Entitlements application. The farmer receiving the transfer must meet the conditions for granting the aid and honour the undertakings given by the farmer making the transfer and, if otherwise in order, payment of that year’s Basic Payment will issue to the farmer receiving the transfer. If the entire holding or ownership of the herd number changes after 31 May, the Basic Payment for that year will issue to the farmer who made transfer for that scheme year, it will issue to the farmer receiving the transfer from the year after.
