The new CAP scheme comes in on 1st Jan 2015.
The Basic Payment Scheme (BPS) will replace the Single Payment Scheme (SPS).
SPS entitlements will become BPS entitlements on 1 January 2015 (but their values will change)
Any leased entitlements that are due to be returned to their owner after 21st October will still be able to be returned and any entitlements that are part of an inheritance will also be able to be transferred after 21st October however if the deadline for transferring entitlements before 21st October is missed then they the farmer will have to wait until Mid-January next year (the exact date is yet to be determined) to effect the transfer which must be to an active farmer.
Reasons why farmers may want to trade their entitlements:
1. Farmers will no longer be able to ‘rotate’ their entitlements – this means that if they hold more entitlements than eligible land to activate them against they will lose them; 2. At least once in every two years farmers must activate all of their entitlements in a single year; 3. Entitlements will only be kept if the farmer has enough eligible land declared to support them.
For a BPS application to be valid the farmer must have at least 5 entitlements – which means they will need at least 5 hectares of eligible land to activate them against.
Therefore any contracts for sales of land with entitlements or transfers of entitlements where a related RLE1 form cannot be submitted before 21st October will have to include relevant clauses for the seller to submit the RLE1 as soon as they are able to in the new year and an indemnity to cover any loss in BPS if they don’t.
For advice and information contact Helen Gough on 01905 610410.