Agriculture Minister Michelle O’Neill has responded to queries raised by farmers who grow potatoes about potential difficulties in securing rented land in 2015 for this activity.
Minister O’Neill said: “CAP reform has brought challenges across the agricultural industry, but potato growers in particular are reporting difficulties acquiring conacre land in 2015. There are some unverified reports that landowners who are also farmers are reluctant to rent land out in 2015 as they want to establish entitlements on the land themselves.”
She went on to explain: “Although the landowner and conacre tenant (in this case the potato grower) may both be ‘active farmers’, it is important to understand that the EU regulations outline: ‘Entitlements should be allocated to the person enjoying the decision making power, benefits and financial risks in relation to the agricultural activity on the land for which such an allocation is requested’ and this applies at individual field level. In a context where a livestock farmer rents a five-hectare field to a potato grower in 2015, it will be the potato grower who is eligible to establish entitlements on this parcel of land.
“For this reason, it appears other farmers who traditionally rent land out as part of their crop rotation are reluctant to rent land in 2015. Farmers must also consider future implications of renting land out in terms of Greening and the Nitrates Regulations.”
The minister went on to outline some potential solutions for potato growers faced with a restricted supply of suitable ground for rent in 2015.
She said: “The farmer who owns the land and the conacre farmer could agree a land exchange for 2015. In this context, the potato grower would rent in a 5 ha field from a livestock farmer and establish entitlements. The livestock farmer would rent in a 5 ha field from the potato grower and establish entitlements. The net effect of the transaction is that both farmers are able to establish five entitlements in 2015. As entitlements are not attached to land, in 2016 the livestock farmer is able to use the five entitlements established on the potato grower’s land to claim on his own land and vice versa. It is essential that this arrangement be reflected on the ground and not simply be a paper exercise. I can see the scenario working best where both farmers are geographically close.
“Another potential solution could be for the potato grower to establish entitlements on conacre land in 2015 and transfer these back to the farm business owning the land in 2016. It may be possible for two businesses to come to agreement on this prior to the renting of the land.
“The landowner will want to compare the conacre rent offered in 2015 to the income forgone by not establishing entitlements in 2015 (and this impact across the CAP reform period). In addition to this, entitlements will be tradable again in 2016 and the two parties could agree that the entitlement could be transferred back to the landowner in 2016. It is recommended that both parties seek legal advice before entering any such agreement.
“A third option could involve the potato growing business altering its traditional rotation for one year and growing a greater area of potatoes on owned land.
“It would then establish entitlements on that land in 2015. It is anticipated that land availability will not be as big an issue in 2016 as, once entitlements are established in 2015, other farmers would be free to lease land with entitlements.
“Whatever the solution adopted, farmers need to be mindful of the need to adhere to greening requirements. The greening requirement for a business will be based on the area of eligible land found at an inspection. All businesses should carefully check to find out if they are required to undertake greening requirements or if they can claim exemption.
“Farmers will also need to consider compliance with the Nitrates Regulations The area of eligible land used to establish and activate entitlements will be considered the agricultural area on their holding and passed to the NIEA for the purposes of checking that they have complied with the nitrogen loading limit.
“Reducing the amount of eligible land declared could cause a breach of the Nitrates Regulations which would be treated as a cross compliance breach.”
Concluding, the minister highlighted help and advice that DARD can provide to farmers in this position.
“To assist farmers making decisions around establishing entitlements in 2015, I would encourage you to use the online calculator available on DARD Online Services. Your local crops and countryside management advisor can also provide advice,” she said.