Any farmer who was entitled to receive a direct payment in 2013 (Single Payment, Grassland Sheep Scheme, Burren Life Scheme, Beef Data Scheme) is automatically eligible to receive an allocation of entitlements under the Basic Payment Scheme in 2015. The status of entitlements held in 2013, whether leased or owned, has no impact on the establishment of such an allocation right.
The value of entitlements that will be allocated to a farmer in 2015 will be based on a percentage of the value of entitlements (and where relevant the payment received in 2014 under the Grassland Sheep Scheme) owned by the farmer on the closing date for applications under the 2014 scheme year. When carrying forward the value of leased entitlements to the Basic Payment Scheme in 2015, such value will be assigned to the owner of the entitlements (where the owner is eligible to participate in the Basic Payment Scheme) and not to the lessee.
The lessor and lessee in question may wish to carry forward the existing lease into the new Basic Payment Scheme and may do so by way of a Private Contract Clause. However, to enter into such an agreement, the lessor must hold an allocation right (from 2013) and must also establish entitlements in his own right in 2015.
If the parties concerned do not enter into a Private Contract Clause, and the lessee in question does not own entitlements in 2014, he/she has no value to carry forward into the new scheme. However he/she retains his allocation right and will establish new entitlements. Such entitlements will have an Initial Unit Value of zero but will be converged upwards immediately in the first year of the scheme.
Alternatively, the lessee has the option to purchase entitlements under the current 2014 scheme year and the value of such entitlements will carry forward to the calculation of his entitlements under the new Scheme in 2015.
I recommend that the parties concerned contact the 2015 Direct Payments Information Centre at 0761 064438 or CAPdirectpayments@agriculture.gov.ie to discuss their individual circumstances in more detail.