With less than a month to go before the submission deadline for the Basic Farm Payment application form, many letting agents around the country are in the final stages of their letting and land leasing campaigns.

While the appetite for land mellowed as the spring progressed, prices still remained strong, despite the generally downbeat mood across most of the farming sectors. What is clear is that the prevalence of the traditional 11-month conacre contract is diminishing as a result of the significant uptake in long-term lease arrangements.

Agents report that a major portion of their letting business now involves long-term lease arrangements, which is in complete contrast to a couple of years ago when the traditional 11-month conacre contract dominated.

Wet weather coupled with unfavourable commodity price forecasts did soften prices in some regions this spring, especially when compared with the hype of last year. Nonetheless, famers were still eager to get their hands on a lease and were willing to pay market value.

Depending on location, good quality bare (without entitlements) land generally made from €130 to €250/acre based on a five-year lease.

Where land is leased with entitlements, there is a land element and an entitlement element in the cost of the lease. In most cases, it was agreed that the annual entitlement value would return to the landowner.

However, there was the rare situation whereby the landowner and the tenant agreed to split/share the entitlement value between them. But few new deals were done this spring that involved the leasing of land with entitlements.

Leasing entitlements on their own is a new phenomenon this year. Although the volume of trading has been minimal, it’s understood that leased entitlements are making between 50% to 60% of their value.

While many farmers might find themselves with entitlements but not enough land, there are a significant number of farmers with land but no entitlements. One agent in the east is finding that the demand to either buy or lease entitlements is far outstripping supply at the moment.

The 50% clawback rule is deterring people from selling their entitlements and consequently, some are opting to lease them instead, at least for this year.