The Montgomeryshire branch of the Farmers’ Union of Wales held a successful first ever county Farming Conference, which discussed the future of the industry in light of Brexit.
The well attended event was held at the Elephant & Castle Hotel, Newtown, on Thursday 16 November and guest speakers on the night were Steve Hughson Chief Executive of Royal Welsh Agricultural Society, Helen Davies NSA Cymru, Adam White Barclays National Performance Manager – Agriculture and Kevin Roberts Chair of Hybu Cig Cymru.
‘Ffermio’ presenter Alun (Elidyr) Edwards, who chaired the evening, opened the conference saying: “I would like to congratulate the CEO Emyr Wyn Davies for organising this event and also thank you all for being here and supporting the evening.
"The panel will be focused on what we as an industry can do to secure a viable future now, by consistent self-improvement. We should be proud of where we are as an industry, and you will hear words like markets, profits and efficiency, resilience, competitiveness and sustainability, but don’t forget that all those words are about things - not people. However, our lives are to do with community.
“With this in mind, I am bothered by the consultation culture we have inherited over the years. We used to be able to fill our forms in ourselves, we used to be able to manage our businesses - it has become so complicated now that we are almost forced to turn to somebody for help.
“Brexit was supposed to be a part of the solution for that, but the closer we get to it the more unlikely I think it is. There is a brutalism in statements from politicians, like that only the top 25% of some sectors will thrive post-Brexit. So, what about the rest of the people? It is very easy to be elitist, and to take with you the people from Farming Connect, who want advice from mediocre consultants. But how do you take the rest of the people with you? For our communities and societies to work, we need everyone to have a chance. I don’t think we live in a country that says - the rest of you can go to hell.
“We also hear a lot about competition, but I would like to hear a lot more about cooperation and maybe, coming back to my theme of the 75%, pairing a failing farmers with a high performing farmer, so that they understand each other. And what’s the bet that the top 25% have the best farms? We have to be cleverer with what we’re doing and take people with us.
“For the future, one word we must remember is grazing. Everything starts with grazing. Let people understand, that’s the cycle we deal with. Sheep especially, are the sector that’s threatened the most by Brexit and if that sector goes, that will be the end of the countryside and we need to tell people that.”
The first speaker of the night was Steve Hughson, Chief Executive of the Royal Welsh Agricultural Society. He told the audience that the Society is much more than the Show, despite its obvious importance and scale.
“The Society’s role in promoting agriculture, forestry, horticulture and Welsh culture are just as important. The Society also has an important role in shaping and influencing the future of agriculture and rural affairs, as it provides the perfect platform for debate, innovation, education and much more to take place,” said Steve Hughson.
He made the point that despite the outward success of the Society and its events, it was important to avoid complacency.
“It is very important to continually improve and embrace change rather than stagnate. The Society has delivered many changes over the years from the initial decision to move to a single site in Llanelwedd in 1963, the introduction of Shuttle Buses and more recently the use of e-tickets.
“All of these changes have been met with some resistance, however they have proved to deliver positive outcomes,” he said.
Mr Hughson encouraged those present to embrace change, seek out new opportunities and ensure that the industry remains relevant to the changing world.
“The similarities between the Society, its events and farming are obvious. We both have strong traditions, but need to look to the future and grasp opportunities presented by technology, improved communication and the needs of the millennials (those born after 2000).
“We also need to seek out efficiencies, cut out waste and create a secure financial model that recognises the value of diversification. The Society has introduced new events to the site and is delighted to be hosting the 2018 Urdd Eisteddfod,” said Mr Hughson.
To conclude Steve Hughson re-enforced the importance of the Welsh language and culture to farming and Welsh communities. As a Welsh learner he stated his commitment to ensuring that the Society did all that it can to promote the language and it was a pleasure to hear so much Welsh spoken at the Society’s events. He thanked the FUW for their kind invitation and looked forward to working with everyone across the agriculture community to ensure that positive messages around Welsh produce and the importance of farmers is clearly heard.
Outlining her role and the aims of NSA Cymru, Helen Davies, Regional Development Officer for NSA Cymru, said: “ NSA’s vision is one of the people involved in keeping sheep being enthusiastic, knowledgeable and aspiring to best practice – and those not keeping sheep being increasingly aware of the contribution sheep make to society and of the core aspects of the sector.
“And I think best practise is one of the main things going forward if we are going to survive Brexit and something we should all aspire to. Keeping our welfare standards high if not higher than they already are. That will be necessary if we are to get the best out of what we are producing.
“Our main aim is to support farmers - something we do through our sheep events, our sheep farmers magazine, social media and the website, weekly email updates, the NSA Next Generation project, as well as NSA ram sales, and our partnership Moredun and involvement with SCOPS and SHAWG.
“We also aim to protect the industry through lobbying and producing reports on live export concerns, falling domestic consumption, EID, over burdensome EU regulations and religious slaughter concerns to name just a few. We also lobbied long and hard on quarantine units and are pressing for a review as the effect on shows, especially the smaller shows, will be detrimental.”
Helen Davies further outlined the NSA’s Brexit priorities, saying that: “ Some people have said that our aims are quite high, but you must start right from the top - there is no point in keeping your aspirations low. So some of the things we are arguing for are a common UK-level framework for trade development, farm support and regulation, developed in partnership and with combined effort from all four nations. We recognise that subsidies are probably not going to stay the same and will be more environmentally based but we must try to get the best deal for our farmers.”
Adam White, Barclays National Performance Manager – Agriculture, gave a presentation on lending to the agricultural sector, saying that: “The sector is very reliant on debt, with UK bank lending figures from 2017 showing that drawn debt for the agricultural industry equates to £18.63 billion, which is up by 2.4% and that credit balances equate to £7.118 billion with credit up by 10.8%.
“The U.K. agricultural industry clearly has a borrowing requirement, which Barclays looks to support in a proactive and responsible manner, ensuring farming businesses can operate, invest, draw money to live and repay the level of debt borrowed.
“Land prices have gone up significantly in recent years, which has attracted some non-farming investors into the market. So, the assets of the farming sector and individual businesses have increased proportionately. However, Barclays are not pawnbrokers - just because land is worth more doesn’t automatically mean that we will lend more.
“What we are looking at is the quality of the business and future plans, cost of production, management and succession in conjunction with the ability to repay debt, even when taking into account some of the volatility the farm gate prices have experienced in the last few years.
“With ability to repay debt being the driver for lending, rather than asset base, it is important for farm businesses to focus on margin not yields, as a good yield doesn’t always equal margin, not just for borrowing but for long term sustainability.”
He further explained the banks process in deciding if they would lend to a business by outlining that they look at Character & Ability of the management, the Means with which they can change and adapt, the Purpose & Amount of debt, the ability of the business to make Payment on the debt and of course the Insurance if something does not go to plan.
The final keynote speaker on the night was Hybu Cig Cymru - Meat promotion Wales (HCC) chairman Kevin Roberts. He outlined the organisations plans for the future, saying: “Together with our new board we have started to look at what our long term vision and plan should be for our industry. The EU exit, whether it’s a soft or a hard exit, will change everything forever. What sort of industry and market do we want? We have a very high quality product in Wales. It has a great reputation and we have great opportunities to build on that reputation, to try and get returns for you that will make your businesses work better.
“We know that as a planet we have to produce a lot more food. We also know that with climate change the supply of food gets more challenging. So the economist will tell you that if you have growing demand, and you’ve got a broadly fixed supply, which is going at a slower rate than demand, then price should be good. So in the long term I would be very optimistic about being in the food business.
“What we have in that growing population is a growing middle class and the first thing people do when they become more affluent is eat more meat and move away from vegetable based diets. We have a premium product and we want a good return for it, so we need to target those premium markets.
He added that: “Our challenge is identifying those markets, making sure we can get access to them, and then promoting the product. Target markets for us with lamb are in the far east, such as China. Looking at our home market red meat consumption is declining, which is to do with issues surrounding health and lifestyle.
“There is absolutely no reason why consumers should be worried about eating red meat, within the context of a balanced diet. On average in the UK we consume below the average in the world. So challenges here in the UK, associated with red and health, should be resolvable. But this is a long term mega-trend that will take time and a lot of communication to turn around. We will not get back to the consumption of 20 years ago, and business here in the UK is tough.
“What we believe as a board is that we must try and find the best segments and markets here in the UK - high end food service, restaurants, premium retailers; maintaining high quality products in those segments and look for those more affluent markets where we have a growing demand overseas. That is the essence of our long term vision.”
Speaking after the conference, FUW Montgomeryshire County Chairman Aled Roberts said: “I would like to thank the speakers for their valuable contributions tonight. I’m sure everyone who attended tonight will have been inspired by their presentations. Alun Elidyr Edwards contributed to the lively atmosphere and his humour was as always well received from all who attended. The large audience of county members who attended on the evening also contributed to its success and I thank them for their continued support.”