In areas where agricultural land can be used for arable farming, payment entitlements have little effect on the (lease) price of agricultural land. In 2019, the value of 1 payment entitlement has been set at €262,91 per hectare.
"When you can rent out land for seed potato cultivation, thousands of euros are paid per hectare. However, there are also regions where payment rights are indeed an important factor in determining the value of the (lease) land. depending on the region," said Hans Peters, the chairman of the Rural and Agricultural Real Estate section at VBO Makelaar.
Political Negotiations
The amount of the payment entitlements is also fixed for next year, with possible minor adjustments due to the modulation discount. What will happen in 2020 is currently an important topic of political negotiations in the European Union and the House of Representatives. However, the negotiation process is delayed, Minister Carola Schouten (Agriculture, Nature and Food Quality) announced this week.
William Moorlach, Member of Parliament for the Labor Party (PvdA), stated during the debate about the future European agricultural policy that the payment rights drive up the land price. He therefore believes that the rights should be abolished. Schouten shares the opinion that these have a price-increasing effect.
Value is going to fall
In the letter to parliament that Minister Schouten sent on Wednesday 8 May about the National Strategic Plan (Common Agricultural Policy 2021 to 2027), she writes: "The conclusion is that this basic premium must inevitably be reduced, compared to the current hectare premium of approximately €380 per hectare (including the greening premium). However, my idea is to do this step by step and to ensure that farmers continue to participate in the Common Agricultural Policy at the end of the period."
This will also lead to a shift in budgets: from payment entitlements to eco-schemes. Despite the shift from 2021, payment entitlements have continued to be traded in recent months. After all, there are still agricultural companies that have land, but no payment rights.
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