Entitlements clawback: What is changing in the next CAP?
The Department of Agriculture, Food and the Marine has confirmed that all entitlement values will change in 2023.
It has planned changes for the clawback mechanism around the sale and leasing of entitlements from next year onwards under the next CAP.
During a recent public information meeting on the Common Agricultural Policy Draft Strategic Plan 2023-2027, Fran Morrin of the DAFM confirmed the following concerning payment entitlements:
- No new allocation in the draft regulations – no ‘reference years’
- The number of entitlements stays the same. However, the value of each is adjusted to match the funding ceiling. According to the DAFM, the new average will be in the region of €155-160;
- All entitlement values will fall into a range from approximately €130-€285 by 2026;
- Transfers are still possible in what the DAFM described as “the usual way”. However, it confirmed that there are some changes planned around clawback;
- In recent weeks, farmers received a statement of entitlements for 2022, which sets the value of entitlements for this year. Furthermore, the DAFM confirmed that farmers will receive another statement around February 2023 for the entirety of the new CAP;
- Convergence will continue throughout the new CAP, reaching a minimum of 85% by 2026 in “equal steps”. According to the DAFM, the proposed level of convergence, reaching a minimum value of 85% of the average by 2026, will see a new average payment entitlement value of an estimated €158.68. It added that the minimum payment entitlement value will reach €134.88 by 2026 under this scheme.
Entitlements clawback from 2023
Morrin outlined, in detail, the Department of Agriculture, Food and the Marine’s planned clawback changes.
Currently, if you sell entitlements without land in Ireland, there is a 20% clawback.
Morrin explained: “For example, if you sold ten entitlements without land, the recipient would get eight of these entitlements.”
“The two that are clawed back go to the National Reserve to help fund that. Of course, the price that the recipient pays is reflective of the right rather than the ten that you were selling.”
The DAFM proposes to lift that clawback completely for two years, in 2023 and 2024.
In tandem with that, the DAFM proposes a new clawback for new leases of entitlements from 2023, whereby a farmer leases out all or “nearly all” of their entitlements on a shorter-term basis.
“The particulars of that are that if a farmer leases out more than 80% of their entitlements for less than five years, there will be a 10% clawback per lease.”
“If I have ten entitlements and in 2023, I lease out nine or ten of them for less than five years, then the recipient will get 10% less. When the lease ends, I will get back my entitlements, but minus that 10%.”
“If I did a lease for two years or three years, the 10% is per lease, rather than annual.”
Morrin stated that this proposal reflects “much of this discussion” that the DAFM has had with “a whole variety” of stakeholders coupled with analysis it has conducted in recent years.
He said the proposal’s benefits include:
- Facilitating farm handovers;
- Security of tenure for those renting in;
- Sync with eco-schemes and some agri-environmental schemes in the future;
- “Strengthening” active farmers and targeting of payments.
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