Farmland being snapped up as a result of entitlements loophole
SINGLE Farm Payments have become a good investment in Scotland.
At a recent public auction of farm subsidy entitlements, entitlements worth £306 (about €450) a year could be bought for £562.82 (about €844). It has become evident that investors — who may never have set foot on a farm — are buying up entitlements to claim the Payment.
Under EU regulations, only someone classified as a farmer can buy the right to receive subsidies. But official farmer classification — in Scotland at least— only requires holding a lease on at least 1.7 acres for 10 months of the year, and there’s no need to visit it.
As a result, Scottish landowners are now leasing out vast tracts of rocky highlands for as little as £5 (about €7.50) an acre a year, so that investors can claim to be farmers. For each acre you lease, you can buy annual subsidies averaging £100 (about €200) an acre, but which can rise to over £1,000 (about €1,500) an acre.
Agricultural brokers Hayes McCubbin Macfarlane have estimates that about 200,000 acres of Scottish highland and woodland are being leased to non-farmers. “We have been leasing 100,000 acres simply to allow them to meet the European definition of farmer. The total market could be double that.”
Classification is achieved by purchasing a registered small-holding, and then the investor simply rents in additional “bare acres” at a nominal £6 (about €9) per acre in a paper exercise that allows a legitimate claim on unlimited amounts of acquired SFP entitlements.
Andrew Arbuckle, the Liberal Democrats deputy spokesman on rural affairs, has calculated that £100m of the £420m annual SFP pay-out in Scotland now goes to non-active farmers.
The National Farmers’ Union has defended the speculative subsidy trading, pointing out that entitlements are tradeable, but only with an equivalent area of land, and the purchaser becomes responsible for meeting the same environmental conditions as the original owner.
