Payment regulations leave farmers with a major legal headache
The changeover in 2015 from the single payment scheme to the new Basic Payment Scheme did not go smoothly for all farmers.
One of the new developments was private contract clauses, as a way to ensure that that entitlements revert to the landlord, when a lease ends.
Some landowners may have misunderstood the use of these complex clauses.
Clare Fine Gael TD Pat Breen asked Agriculture Minister Michael Creed in the Dáil when payment would issue to a landowner.
Unfortunately, the answer was no payment for that particular year, because the minister explained the farm in question no longer holds the herd number, having applied to transfer it to another person in 2015, and submitted a Private Contract Clause to the department seeking transfer of land and entitlements by lease, while retaining 1.08 hectares of land in 2015 and being allocated a corresponding number of entitlements.
But in applying for the PCC, the transferor signed a declaration that stated: “I understand that no payments from the Department of Agriculture, Food and the Marine will issue to me on foot of this PCC number.”
Therefore, no monies are due or owing in respect of 2015 Basic Payments Scheme.
There was a lot of movement of entitlements in 2014, in anticipation of the 2015 change from the single payment scheme to the new Basic Payment Scheme.
Unfortunately, many of these moves came a year too late, because only farmers entitled to receive a direct payment in 2013 had an automatic allocation right under the Basic Payment Scheme in 2015.
For example, a woman who received a gift of 14.94 entitlements under the 2014 scheme was contacted by the department and asked if land had transferred with the entitlements.
Unfortunately, she did not have a transfer of land to accompany her gifted entitlements, and thus was not eligible to receive a transfer of allocation right under the new Basic Payment Scheme.
Therefore, her application under the 2015 Basic Payment Scheme was in vain.
This emerged in a reply by Minister Coveney to former Cork South West TD Noel Harrington.
A 2014 buyer of land may have also thought he was buying entitlements.
In the Dáil, Limerick County Fine Gael TD Patrick O’Donovan asked the minister for an update on the Review of Entitlements sought by this person.
In Minister Coveney’s reply, it emerged land and entitlements were purchased in 2014, but the land seller hadn’t established an allocation right arising from the 2013 scheme year, and consequently there is no allocation right available to transfer in the sale.
Deputy Pat Breen also raised the predicament of a Co Clare person for whom 2013 proved unlucky.
The reply from the Agriculture Minister at the time, Simon Coveney, confirmed that only farmers entitled to receive a direct payment in 2013 (Single Payment, Grassland Sheep Scheme, Burren Life Scheme, or Beef Data Scheme) had an automatic allocation right under the Basic Payment Scheme in 2015.
An Areas of Natural Constraint Scheme application was received from the person on April 20, 2015.
However, he didn’t submit his 2013 Single Payment Scheme application form until June 28, 2013, deemed inadmissible because it was more than 25 days after the Single Payment Scheme closing date. Therefore, he did not qualify for an automatic Basic Payment allocation.
However, Minister Coveney said representatives from the department would make contact with the person, to resolve the issue.
A Co Kerry farmer discovered that his leased entitlements didn’t generate any 2015 entitlements for him, but convergence will boost the value of his Grassland Sheep Scheme by an impressive 800%.
Independent TD Michael Healy-Rae was told in the Dáil by former Mr Coveney that the farmer did not own any entitlements in 2014 nor during any year of the Single Payment Scheme.
He received a Single Payment of €4,743.35 under the 2014 scheme year, based on his leasing in of entitlements from another farmer.
For the purposes of calculating the value of entitlements in 2015, the value of these entitlements is attributed to the owner of the entitlements, not the lessee.
The value of entitlements allocated to a farmer in 2015 is based on the value of the entitlements owned by the farmer in 2014 plus any payment received under the Grassland Sheep Scheme. As the farmer did not own any entitlements in 2014, his single payment in 2014 does not give rise to any value to carry forward to 2015.
He received a payment under the Grassland Sheep Scheme of €591.36 and this payment forms the basis of his calculation in 2015.
The process of convergence increases this value to €2,023.45 in 2015 and to €7,818.06 by 2019. This represents an increase in value of almost 800% compared with 2014.
