Entitlement Trading in 2014

It will be possible to transfer SPS entitlements after the 2014 claim and before they are rolled into the BPS scheme at the start of 2015.  However, there will be a closed window for trading at the end of 2014, so farmers need to ensure they get entitlements in the right place early.

It was thought that DEFRA would not allow any trading at all between the 2014 claim and the start of 2014.  Thankfully, this position has softened and the following key dates apply;

• 2^nd April 2014 – the deadline for transferring SPS entitlements in time for them to be used in the 2014 claim
• 3^rd April to 19^th October – SPS entitlements can be transferred using the normal RLE1 form
• 20^th October to mid-Jan 2015 – there will be a ‘closed period’ on trading whilst the entitlement register can be collated and then the entitlements rolled-forward into the BPS
• Mid-Jan 2015 onwards – farmers will presumably be notified of their ‘new’ BPS entitlements early in the New Year.  The RPA will then open a trading window for these entitlements – the exact date will be confirmed nearer the time.  The process for trading under the BPS will be different.  This apparently includes the scrapping of the RLE1 form and conducting trades online.  it is not yet clear whether this will make the process more ‘real-time’ and therefore the 6-week notification period will no longer apply.

An exemption to the closed transfer period between October and January is where leases are ending.  If entitlements have been leased along with land, these will be returned to landlords in that period, and thus be held by landlords when they are rolled-over into BPS entitlements. 

In Wales and Scotland there will be no entitlement trading after the 2^nd April 2014 deadline.  New BPS entitlements cannot be traded until after they have been established – i.e. from 15^th May 2015 onwards (in practice it is likely to be after this as vendors will need some notification from the relevant administration that they have successfully established BPS entitlements).

There are two options in terms of calculating the historic element within new BPS entitlements.  This will be based on either;

• the amount paid under the 2014 SPS
• the value of entitlements held in 2014

If the latter method is chosen, we may see landowners purchase extra entitlements prior to the 2^nd April to boost the historic element (even if there is not the land to claim them).  But if the first option is chosen, this this would turn out to be a waste of time and money.   It seems unlikely that either the Welsh or Scottish Governments will make this choice before the trading deadline – therefore a risk.