O.K. now for the numbers.
You can buy entitlements from many local chartered surveyors - however many have a minimum fixed fee for their service, on top of the actual price you have to pay the seller. In my area, (East Anglia) all the local agents could lay there hands on entitlements, but the prices they quoted were far higher than I could find online (see 2 examples below)
www.townsendcharteredsurveyors.co.ukwww.entitlementtrading.infoIf you want any advice, then both these firms gave excellent information.
Entitlements really are simple to buy: you call an agent, tell them how many you need, they check their database of sellers, match you up, they give you an indicative price, you make an offer, they liase with seller, you agree a price, they send you paperwork, you fill in & pay......simples.
SDA = Severely Disadvantaged area (i.e. upland farmers)......could be you in Wales?
Non-SDA = non Severely Disadvantaged area (normal producing land)
The price of entitlements does fluctuate, but not so wildley that if you are only buying for 12 acres it won't make too much difference.
SDA = £185 -200 per hectare + VAT
Non SDA = £210 -£230 per hectare +VAT
If you are not VAT registered (and therefore can't claim back the VAT) than you can buy them from non VATable sellers - these tend to go for more money:
SDA = £200 -220 per hectare
Non SDA = £225 -£240 per hectare
So I'll assume you are non-SDA land: 12 acres = 4.85 hectares, you'll need to buy 4.85 entitlements x say £230 = £1115....................................so you have forked out this much, just to buy the right to make a claim via the Single Farm Payment system.
What am I going to get back?Once you've got the entitlements, you have to make a claim each year to the Rural Payment Agency (15th May this year). Once your claim is lodged, you have to wait until November to receive payment.
What you get paid fluctuates each year (as its set by EU), and we are at the mercy of the exchange rates as its set in Euros.
for 2011/12 year, it was:
SDA = £207.72 per hectare
Non-SDA = £258.50 per hectare
(there is a little tricky thing called 'modulation' whereby they take some (circa 14%) of this payment back off you - but I believe that all payments under 5000 euros are exempt from this)
i.e. you should receive back in the region of:
4.85 x £258.50 = £1253.73 per year
Effectively, in your first year of claiming, you should just about breakeven.
But in the second (and subsequent) years of claiming, you will be quids in!
HOWEVERThe current payment arrangements were all meant to change in 2012, but due to ongoing discussions in the EU, this has been delayed until Jan 2015. There is speculation that this may be delayed further....but no-one knows for sure.
No-one also knows for sure what shape or form the new system will take either.
What is for sure is that if you bought entitlements NOW, you would at least be able to claim 2 years worth of payments.
i.e. in your instance payout £1115.....get back circa £2500.
There is a lot of paperwork to plough through............is it worth it for £1385 extra...........
My own view was that:
a) I'd apply as it was a good learning curve, and gives me a new topic of conversation with some farming friends
b) It at least pays for itself this year
b) It increases my 'return' on my investment in the land
c) There is a small chance that the scheme continues for another year (i.e. 3 yrs of claiming)
d) No one knows what the new system will look like, and I wanted to be 'in the club', just in case it makes me eligible for the new scheme (or rather not receiving payments now could exclude me from any new scheme)
Hope this helps.