Éamon Ó Cuív (Galway West, Fianna Fail)
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96. To ask the Minister for Agriculture, Food and the Marine the way the rules as laid down by the European Commission on the leasing of entitlements will operate here, in particular in cases where the owner of the entitlements has not activated any entitlements in the reference year; the reference year that will be applied; and if he will make a statement on the matter. [6340/14]

Simon Coveney (Cork South Central, Fine Gael)
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Any farmer who received 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 number of entitlements that will be allocated to a farmer under the new Basic Payment Scheme will be based on the number of eligible hectares the farmer declares in 2013 and 2015, whichever is less. The value of entitlements that will be allocated to a farmer in 2015 will be based on a percentage of the value held by the farmer in 2014. As of yet it has not been decided whether the "value" will be based on the total value of "entitlements" held by a farmer in 2014 or on the value of the "payments" received by the farmer in 2014 as these options have differing impacts on the status of leased entitlements.

If Ireland chooses "entitlements", then the calculation of 2015 value would be based on the entitlements "definitively held" by each farmer in 2014. As per the Delegated Act, the value of any entitlements leased out by a farmer in 2014 would be attributed to the lessor. In this scenario the lessor and lessee may enter into a Private Contract Clause (PCC) whereby the lessor may lease out together with the holding or part of it the corresponding payment entitlements that will be allocated in 2015. Such PCC would have the effect of recognising an existing lease agreement and would allow both lessor and lessee to benefit. However, such a transfer requires that the lessor has an "allocation right" based on receiving a direct payment in 2013, or based on any of the other optional measures which would give rise to an "allocation right", and that the lessee is an active farmer as defined in article 9 of the Direct Payment Regulation.

The difficulty arises therefore where lessors have leased out their entire holding and all entitlements in 2013 and consequently do not have an automatic "allocation right". As a consequence, they will neither be eligible to receive entitlements in their own right, nor can they enter into a PCC to transfer entitlements to the lessee. The value of such 100% leased entitlements would be lost to both lessor and lessee but would remain in the overall fund for redistribution.

This issue remains the subject of negotiation with the EU Commission where Ireland continues to argue for increased flexibility in dealing with leased entitlements. However, if no resolution can be found, the parties involved in the lease may safeguard the value of the leased entitlements by entering into a permanent transfer of the entitlements in question under the 2014 scheme year.