There are two ways of trading your BPS Scheme Entitlements in 2024 by way of sale or lease.
Farmers who leased out their Entitlements in 2023 to active farmers do not have to activate their Entitlements themselves in 2024 and are still in a position to lease them out again in 2024.
It is very important that farmers who leased out their Entitlements in 2023 make sure that these Entitlements were drawn down by the transferee and that the transferee activated these Entitlements by submitting 1 HA of land to draw down payment on each Entitlement.
Farmers will be getting a statement from the Department in 2024 notifying them of any Entitlements that was not activated (payment drawn down in 2023) and it is very important that they activate these Entitlements by submitting land themselves or leasing them out to active farmers.
Farmers who owned Entitlements in 2023 and did not activate them must either activate them in 2024 by submitting the correct land or lease out these entitlements to active farmers. They also have the option of selling these entitlements.
If these Entitlements are not activated (payment drawn down) in 2023 or 2024 they will be lost to the National reserve
This comes into effect under the usage rules were a farmer cannot roll over their entitlements and must use them under the two year usage rule or risk losing them to the national reserve
This opens up many benefits to the farmer as they are now in a position to hold onto the ownership of their entitlements even if they have no land to draw them down.
Under the current scheme a farmer is able to lease out their Entitlements with or without land for whatever number of years they require. There is no claw back to the national reserve when leasing out your entitlements once payment is drawn down one in every two years under the the use it or loose it rule.
A farmer is still also entitled to sell their Entitlements in 2024 and there will be no claw back to the national reserve unlike previous years were they were hit with a 20% percent claw back on any sale they made. This looks like the most popular way of trading for 2024. It is expected that this clawback will reintroduced in 2025
We would recommend that farmers who are leasing their Entitlements do this one year at a time as this gives them greater control over their Entitlements.
The benefits of trading out your entitlements by lease with HMG one year at a time is you are sure of your payment providing the Dept approve your transfer.
Benefits of trading out your Entitlements in 2024 by way of lease
- As it was in 2016/2022 previous scheme farmers can lease out their Entitlements without land.
- As it was in 2016/2022 previous scheme there is no claw back on the leasing out of Entitlements without land.
- If you want to take on more land in the following years you will have your own Entitlements to activate.
- You will be holding on to the ownership of the Entitlements subject to usage.
- From the 2023 guidelines you will achieve between 30 and 70 percent of your yearly payments depending on the unit value Eg. Higher the unit value the higher percentage received.
We at HMG currently have a huge demand from farmers looking to lease and buy in entitlements for 2024.
There are many benefits for a farmer to buy or lease in Entitlements in 2024
- Increase their yearly payment
- Upgrade their current entitlements to a higher yearly income
- Make use of any available land they have, that they are currently not drawing down Entitlements on.
- Entitlements are set to go beyond the current scheme and are a great asset to sustain your future in farming
This is a brief guideline on the trading rules for 2024 and we at HMG urge all farmers to discuss their requirements with their Agri advisers.
Please click on the Contact tab to discuss your requirements for BPS Entitlements in 2024.
Disclaimer
HMG Entitlements/McGee Auctioneers accept no liability for any information provided on our website that may have errors or omissions. We do not accept any liability that may cause loss to anybody who uses information that we have provided. This information should not be used in any way as legal advice.