Entitlement trade boosted by CAP progress
The trade in English non-SDA entitlements is firm on volumes higher than usual following confirmation that entitlements held on 31 December 2014 will be rolled into the new Basic Payments Entitlements Scheme under CAP reform.
English non-SDA entitlements are trading at £290-300/ha, while SDA entitlements have firmed in price but are still at generally lower levels than non-SDA entitlements.
“What is being traded is the ability to receive payments from 2014 to at least 2020,” said broker George Paton of WebbPaton.
Entitlement holders with insufficient hectares against which to set their entitlements in 2015 should be selling these now for 2014, advises Mr Paton, as unused entitlements will be confiscated in 2015.
Those with claims smaller than 5ha will also have their entitlement holdings confiscated for 2015 and are already transferring their holdings to farm businesses that will be eligible post-2015.
“Some buyers appear to be holding back, thinking that there will be surplus entitlements when the list of non-eligible claimants comes into force in 2015,” said Mr Paton. “We can see no real prospects of a massive surplus of entitlements for 2014 trading.”
Entitlements in brief
- Relatively strong demand for non-SDA English entitlements at about £300/ha
- SDA and Moorland at lower volumes but prices firming on relatively short supply
- English entitlements to be rolled over to new Basic Payment Scheme (BPS) so that each SPS entitlement held on 31 December 2014 will become one BPS entitlement
- English entitlements bought now for the 2014 claim year will be available to be claimed on until 2020
- Entitlement holdings smaller than 5ha will be confiscated for 2015
- Deadline for 2014 transfers is Wednesday 2 April 2014 – transfers usually take several days to complete so agents advise leaving plenty of time
Siwan Roberts of Entitlement Trading is transferring non-SDA entitlements at £290/ha. “The £300 mark seems to be a bit of a barrier at the moment,” she said.
While the new entitlements would be transferable once they were established, it was not clear what the mechanism would be for transferring in the transition period between 2 April 2014 and early November 2014, nor from 1 January 2015 to 2 April 2015.
Townsend Chartered Surveyors is seeing strong demand and supply for non-SDA entitlements, with the volume of trade up 59% on the same trading period in 2012.
“Some vendors are slightly reluctant to sell so early after confirmation of the rollover,” said the firm’s Ashley Taylor.
“However with a strong flow of offers being received around £300/unit plus VAT, it seems that the ‘rolled-on’ price is now set to continue around this level.”
SDA entitlement trade was relatively slow, although offers of £260-280/ha were attracting vendor interest. “However with little supply and good demand, prices are expected to rise, with some vendors already asking prices closer to £290/ha.”
Moorland entitlements are trading in a wide range from £50/ha, with the prospects of higher prices once the outcome of DEFRA’s CAP consultation is clear.
There has been little or no trade in Welsh, Scottish & Northern Irish entitlements yet this season.
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