AEOS was introduced in 2010 as a
replacement scheme for REPS. Both in
terms of its aspirations and payments it fell well short of its predecessor. Nevertheless the scheme opened for
applications in 2010, 2011 and again in 2012. Over the three rounds of the scheme approx
26,000 farmers joined.
AEOS has now been replaced by the
new GLAS scheme. This scheme will open
later this month and the Dept. of Agriculture hope to fill up to 30,000 places
this year. A further 20,000 places will
become available over the following two years. For commonage farmers who are out of contract the
decision to apply in 2015 will be relatively easy. For farmers who are still in AEOS the
situation is more complicated. They will
be allowed to transfer to the new scheme in 2015 but what are the factors that
farmers should consider in making this decision. I believe every farmer in this
position should consider the following issues before making up their mind.
· Transition into GLAS
· Access to the new scheme.
· Full term in the GLAS scheme.
· Input into the Commonage Management Plan.
· Costs.
Transition into GLAS
For AEOS 1 farmers, i.e. people
who joined AEOS in 2010, their contracts will finish at the end of 2015. If they transfer to GLAS this year they will
be paid AEOS for 9 months and GLAS for the remaining 3 months. They will get a full year’s payments in 2015. If they wait until 2016 to join GLAS they will
get a full year’s AEOS payment in 2015 but in 2016 they will only be paid for 3
months in GLAS. They will have lost the
opportunity to have a seamless transition from one scheme to the next. There are transaction costs associated with
joining GLAS but delaying until 2016 means that those costs will be at their
highest when their payments are at their lowest. For this group joining GLAS in 2015 ensures a
seamless transition to the new scheme with no break in payments.
For farmers in AEOS 2 & 3 while
the opportunity to avail of the seamless transition will be there in 2016 they should also consider the other three points.
Access to the scheme.
There are many thousands of farmers with SAC/ SPA land who are also in AEOS. They are barred from entry to GLAS in 2015 but
will be allowed to join in 2016. There
will only be 10,000 places in 2016 and it is quite possible that the demand
will exceed this. If this happens there
is no guarantee that you will get in. This
means that you may miss a year’s payments.
Full Term in the Scheme.
If anyone on your commonage
joins GLAS in 2015 the clock will start ticking on the Commonage Management
Plan. Later applicants will only get
paid for 4 years if they join in 2016 and only 3 years if they delay until
2017.
Input into the Commonage Management Plan.
With the Commonage
Management Plan in place, it is very unlikely that the initial applicants will
be willing to revisit large parts of this plan to accommodate new entrants. Farmers who join GLAS in later years will in
most cases have to accept the commonage plan as it is and will have very
limited capacity to contribute to it.
Costs.
Delaying will not result in any
reduction in costs, the advisor and most probably the original applicants will
insist that late applicants pay at least the same price as everyone else.
Discussion
Considering the turmoil over the
last 6 months on the whole GLAS commonage issue and in spite of recent progress,
some AEOS farmers may be tempted to adopt a wait and see approach to GLAS and
hold off their applications until 2016.
They may also feel that completing another year or two in AEOS and then
joining GLAS secures their payments for six or seven years rather than the five
available by joining GLAS now. While this
analysis appears logical it does not take into account the negative impacts of
delaying entry into GLAS. It is based on
several assumptions which may or may not be valid. These include;
1. That
they will be able to access GLAS in 2016 or 2017.
2. That
they will have the same opportunity to contribute to the Commonage Management
Plan as early entrants.
3. That
there will be no agri-environment scheme in the next round of the CAP.
There may be situations in some commonages where there are very small numbers of shareholders,
all of whom are in AEOS 2 or 3 and where everyone decides to hold off on
applying for the scheme until 2016 or 2017. In theory this would give them an extra 2 years
AEOS followed by 5 years in GLAS. This
may seem like a good idea but it is not without risk. Look back to when REPS 4
was introduced; the farmers who left REPS 3 early to join that scheme were the
winners. The people who stayed on in
REPS 3 with the hope of getting 5 years in each scheme missed the boat
completely.
I appreciate that for some people
there may be issues in respect of the costs associated with entry into GLAS, a determination
on this can only be made by the farmer himself and I do not pretend to be able
to advise on this. The decision to join
GLAS is one that each farmer has to make for themselves. Personally I believe that joining GLAS in 2015
is the best option. It virtually
guarantees entry for commonage farmers and gives them the opportunity to
contribute to the development of the commonage management plan. Delaying the application until 2016 puts off
the transaction costs for another year but for AEOS 1 farmers it will cost them
9 months payments (up to €3,750) and they will still face the same costs the
following year. For all commonage farmers
waiting until 2016 or 2017 carries the risk that they will not get in at all
and the near certainty that they will get a reduced term in GLAS and have
little or no input into the Commonage Management Plan.
To borrow a phrase from popular
economics, waiting until 2016 is just kicking the can down the road. It does not solve anything and quite possibly
creates new problems.