Slow BPS entitlements market as May deadline approaches

The muted market for Basic Payment Scheme entitlements could change in the final two weeks of trading, according to brokers.

Jack Jones of Cheshire-based Rostons said values for non-severely disadvantaged area (non-SDA) units were ranging from about £80 to £120/ha, depending on the lot size and the buyer.

See also: New factors emerge in final year of entitlement trading

It is quite an open market this year because of the difference in value of Basic Payment Scheme (BPS) payments for individual claimants, depending on the size of the claim.

English farmers suffering the highest level of progressive cuts to their BPS income are only prepared to pay prices at the lower end of the scale, while smaller claimants can justify paying slightly more.

The value of a non-SDA BPS payment is currently £151/ha for those in the lowest claim band (35% reduction in 2023), compared to £105/ha for someone in the highest (55% reduction).

Mr Jones said trade was currently steady, and although there had been about the same level of enquiries, some of these had been from prospective purchasers who had ultimately decided not to proceed after learning more about delinked payments.

Defra has said that farmers must claim for BPS payments in the 2023 scheme year to receive their delinked payments for 2024 to 2027.

However, the delinked payment itself will be based on BPS payments received in 2020, 2021 and 2022, so buying more entitlements is not going to increase a claimant’s delinked payment.

Hugh Townsend of Devon-based Townsend Chartered Surveyors said the market for non-SDA entitlements had opened at £100/ha, but this had slipped to £75-£110/ha in recent weeks, depending on lot size and VAT status.

“It is hanging in the balance as to whether the price is going to slide further or start moving up – it could go either way.

“Because the value of claims is much less than in previous years, [buying entitlements] is a lower priority than ever before.

“However, we could see a really concentrated period of trading close to the end of the period.”

Vendors and purchasers were both “dithering” at the moment, he said.

As usual, the bulk of the trade so far has involved non-SDA entitlements, although Mr Townsend has done a couple of SDA deals at £100/ha.

He is yet to sell any moorland entitlements but was expecting them to change hands for £20/ha.

George King of Webb Paton, in Wiltshire, said there did not seem to be as much interest in entitlements as last year, with quite an even balance between vendors and purchasers.

“So, while there is less interest from both sides, it is quite consistent.

“So far this season I haven’t sold anything for more, or for less, than £100/unit plus VAT.”

Mr King expected the market to continue as it was until perhaps the last 10 days of trading and then it would depend on how many buyers and sellers there were at that point.

“Prices will either stay where they are and entitlements will disappear, or vendors will need to be prepared to lower the values so they can get rid of them. But at the moment there isn’t a need to do that.”