[caption id="attachment_4523" align="aligncenter" width="550"] FUW autumn conference panel[/caption]

The Farmers' Union of Wales today (Thursday October 20) proposed an alternative option for future direct payments to farmers under the post-2013 Common Agricultural Policy which it believes could benefit areas such as Wales.

During the union's autumn conference in Aberystwyth on the future of the CAP and its implications for Welsh farmers, FUW agricultural policy director Nick Fenwick told delegates the alternative measure could significantly reduce the disruption which would accompany the EC's current proposals, while also benefiting young farmers.

"The current Commission proposal to abolish existing entitlements in December 2013 and create brand new ones based upon the amount of land declared in 2014 is likely to cause major disruptions for the industry in Wales and would be extremely difficult to administer," said Dr Fenwick.

"It will encourage 'land banking', which is likely to artificially raise land and rental prices, and will be extremely detrimental to tenants who do not have secure tenancy agreements, as many landlords may try and secure the land in order to get hold of the new entitlements."

Dr Fenwick described the unprecedented decision to have a future reference year upon which a fixed allocation of entitlements was based as "extremely dangerous" for regions like Wales.

"While the system may suit some regions, we do not believe it is apt for Wales," he said.

During the conference, Dr Fenwick described an entitlement system which the FUW believes should be available to administrative regions as an alternative to those proposed by the Commission.

The system would be based upon existing farmers retaining their current payment entitlements and, subject to strict eligibility criteria, being granted a "claim entitlement" in 2014.

"A claim entitlement would allow farmers to claim a flat rate payment which is proportional to the amount of land they declare - there would be no fixed number of entitlements re-created for farmers as is currently proposed," explained Dr Fenwick.

"During the transition period to flat-rate payments, current farmers would be paid according to the number of entitlements they hold, and a proportion of their original value, plus an amount proportional to the amount of land they declare and the regional flat-rate.

"Over time, the value of historical entitlements would reduce to zero and all those with a claim entitlement would be paid according to how much land they declare."

Dr Fenwick said the system would be similar to the Tir Mynydd LFA scheme which has operated in Wales for the past decade.

"Unfortunately, that system is being done away with but it has worked well - farmers have had an overarching entitlement to claim Tir Mynydd based upon strict eligibility criteria and they have then received a payment based upon how much land they declare, with no fixed number of entitlements."

Dr Fenwick said such a system could also benefit young farmers as those annually fulfilling the new entrant eligibility criteria could be awarded a claim entitlement without ever increasing amounts of modulation being needed to fund a national reserve.

"There would be a need for a national reserve during the transition period, but the amount of monies needed would reduce to zero, so that ultimately those who qualify as young entrants would simply be paid on the basis of the land they declare.

"No system is perfect, and we will not know whether the alternative we propose is the right one for Wales until detailed modelling has been done by the Welsh Government.

"However, the system would certainly mitigate some of the dire consequences of what has been proposed by the Commission."

[caption id="attachment_4520" align="aligncenter" width="500"] Tim Bennett, centre, receives the Farmers’ Union of Wales HSBC Bank challenge trophy for outstanding service to the Welsh dairy industry from FUW deputy president Glyn Roberts, right, and HSBC head of agriculture Allan Wilkinson.[/caption]

DairyCo chairman Tim Bennett was today (Monday October 17) revealed as the winner of the annual Farmers' Union of Wales-HSBC Bank plc award to the person who has made an outstanding contribution to the Welsh dairy industry.

Announcing the winner at an FUW reception on the eve of the Welsh Dairy Show in Carmarthen, the union's president Emyr Jones said Mr Bennett was a worthy winner due to the breadth and depth of work he has done - and continues to do - to support the dairy industry in Wales.

Mr Bennett, of Derwendeg, Maesybont, Carmarthenshire, has spent the majority of his farming career milking pedigree Holsteins in partnership with his wife at Derwendeg.

The herd yielded some 7,000 litres per annum with youngstock reared as replacements for the dairy herd or for beef production.

After running the dairy herd for 27 years he then had an Aberdeen Angus breeding and store cattle unit. For many years the farm also ran an egg laying unit selling direct to consumers and it was converted to organic production in 2008.

Mr Bennett was appointed DairyCo chairman in March 2007 and as a consequence of that appointment he also sits on the board of the Agriculture and Horticulture Development Board.

Throughout his farming career he has been heavily involved with agricultural politics and rose through the ranks of the Carmarthenshire NFU executive in the 1980s before becoming county chairman in 1988.

He was elected as NFU deputy president in 1998 and president in 2004, a position he held for two years.

He is also currently Food Standards Agency vice chairman and a trustee of the Farm and Wildlife Advisory Group. Five years ago he was made an Associate of the Royal Agricultural Society five years ago and, in recognition of his continued outstanding contributions, made a Fellow in 2010.

As DairyCo chairman, he was instrumental in negotiations between the levy board and the Welsh Assembly Government that in 2010 secured £3.3m of support to the Welsh dairy industry over a period of three years to help improve efficiency, sustainability and added value in the dairy supply chain.

Last month he received the 2011 Dairy UK award in recognition of his important contribution to the development of the UK dairy industry.

Speaking at the FUW event, NFU Scotland's milk committee vice chairman Gary Mitchell said the status quo within the GB dairy sector is no longer an option as it has simply delivered poor milk prices, falling production and a growing trade deficit in dairy products.

Mr Mitchell, a dairy farmer from Stranraer, added: "Producers round the country are committed to being part of a vibrant and thriving dairy sector but that requires a more positive and long-term mindset being adopted by all parts of the dairy supply chain.

"We have the climate, the technical knowledge, the efficiency and the enthusiasm to produce milk. All we require as producers is for processors and retailers to match that commitment and put in place a pricing mechanism that gives us the confidence to invest, expand and improve the industry.

"Since the spring, we have discussed with producers, processors and retailers the need for a more formulaic system for pricing milk. Something that would deliver a fair, transparent, market-related price that is on level terms with prices being paid in Europe and give UK producers the confidence to move forward.

"That is an approach to pricing that accepts that it brings both risks as well as rewards but it also recognises that any commercial solution must also be to the benefit of milk processors if it is to benefit us as producers."

The EC's latest CAP reform proposals could lead to future food shortages, delegates attending a joint meeting of the Farmers' Union of Wales livestock, wool and marts and hill farming and marginal land committees have warned.

"The latest proposals continue to remain in direct opposition to comments made in previous European Commission and Parliament documents," said newly-elected FUW livestock, wool and marts committee chairman Dafydd Roberts, of Llanerchymedd, Anglesey.

"Proposed Pillar 1 greening measures, such as the requirement to dedicate at least seven per cent of all eligible hectares towards an ecological focus area, will take land out of food production at a time when experts are warning of catastrophic global food shortages over the coming years.

"It was only last year that the EC acknowledged the dangers Europe faces over the coming years due to food shortages and rising food prices, and these issues were identified as priorities for future CAP proposals."

Delegates at the meeting believed that the latest proposals, if left unchanged, could have a catastrophic impact on EU food security and result in increasing food price volatility.

"The proposals represent a missed opportunity to address the twin issues of food security and climate change in a workable and commonsense manner," added Mr Roberts.

"Just a few years ago talk of food shortages was treated as scaremongering but over the past five years crop failures have led to food rationing in developed countries, food export bans across the world, civil unrest, war and bloodshed."

Mr Roberts said failure to recognise the severity of the situation which would face populations over the coming decades would be folly.

"The CAP was designed to feed Europe, ensure food prices remained stable and prevent civil unrest due to food shortages.

"Given what the experts are predicting in terms of food shortages, we need to ensure that it does just that."

Common Agricultural Policy reform proposals released today by the European Commission would have a catastrophic impact on Welsh dairy farming in the first year of their implementation, according to Farmers' Union of Wales dairy committee chairman Eifion Huws.

Under the proposals, Welsh payments per hectare would see a 40 per cent shift away from values based upon historical payments.

"This would mean a huge fall in income for many dairy farmers in 2014 so there is a real need to change this as well as other measures in the proposals," said Mr Huws.

"Only a few years ago the EC were talking about measures to ensure a 'soft landing' for the dairy industry in the run up to the abolition of milk quotas.

"Yet these latest proposals would wash away any effect the quota regime soft-landing provisions provide for dairy farms.

"These proposals would mean anything but a soft landing for farm businesses - for most it would be more like being dropped from a great height."

Mr Huws said any transition away from the historic entitlement value to a flat-rate payment must be gradual and over a lengthy period.

"We have already raised these concerns with members of the EU Agriculture Committee and the European Commission and over the coming months we will continue our efforts to fight for the interests of Wales' dairy farmers."