There are two ways of trading your BPS Scheme Entitlements in 2022 by way of sale or lease.

This was the major change in trading in the BPS scheme compared to the previous single farm payment scheme where entitlements were not transferable by way of lease without land.

Farmers who leased out their Entitlements in 2021 to active farmers do not have to activate their Entitlements themselves in 2022 and are still in a position to lease them out again in 2022.

It is very important that farmers who leased out their Entitlements in 2021 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 2022 notifying them of any Entitlements that was not activated (payment drawn down in 2021) 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 2021 and did not activate them must either activate them in 2022 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 2021 or 2022 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. This may change in the future schemes from 2023 onwards.

A farmer is still entitled to sell their Entitlements but will be hit with a 20% percent claw back to the national reserve on any sale they make. 

The Department changed the claw back on sale of Entitlements in 2017 without land from 50% to 20%.

It then stayed at 20% for 2018/2019/2020/2021/2022 

The Minister for Agriculture, Food and the Marine, Michael Creed T.D., announced a cut in the amount of clawback applied to the sale of Basic Payment Scheme entitlements without land.  In 2016 the sale of entitlements without land was subject to a clawback of 50% of the number of entitlements sold.

The Minister commented “based on the experience of the level of sales of entitlements without land in 2016,

I believe that a reduction in the level of claw-back to 20% is appropriate for 2017 and will assist farmers in future business planning”.

If a farmer sells their entitlements in 2021 with their land then they will be exempt from the claw back.

We would recommend that farmers lease their Entitlements one year at a time as this gives them greater control over their Entitlements.

We would not recommend that farmers lease out their Entitlements under a long term lease with land as BPS Entitlements in their current phase was only due to run until 2019 and it is by no means certain what will happen in the coming years.

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 2022 by way of lease 

  • As it was in 2016/2021 farmers can lease out their Entitlements without land.
  • As it was in 2016/2021 there is no claw back on the leasing out of Entitlements without land.
  • If you are to sell your Entitlements in 2022 without land, you would be subject to a claw back of 20% to the national reserve.
  • 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 and be in a position to sell your Entitlements at a later date should the claw back percentage change in the following years.
  • From the 2021 guidelines you will achieve between 40 and 80 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 2022.

There are many benefits for a farmer to buy or lease in Entitlements in 2022

  • 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 2022 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 2022.

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.