STRICT PENALTIES will be applied to French farmers looking to trade their future single farm payments in an attempt to dissuade them from speculative transfers, agriculture minister Herve Gaymard has revealed.

Entitlements that are sold with real estate attached will be subject to a 3% tax, rising to 10% where the transfer takes their holding above a certain size to be determined by the local authorities.

But sales of rights without land will be taxed at 50%, according to a government statement.

New entrants will be exempt from all taxes, as will those who have been farming for less than five years.

And entitlements that are not used for three years will be taken into the national reserve.

France will not be introducing the SFP until 2006.

But the minister has made it clear that all land transfers between May 15, 2004 and May 15, 2006 will still have a direct impact on a farmer‘s SFP calculation.