As the dust continues to settle following the UK Government’s Budget, the Farmers’ Union of Wales (FUW) has sought clarity from the UK Government following concerns Wales’ agricultural funding could be drastically reduced.`
As part of her Budget, Chancellor, Rachel Reeves redefined agricultural funding for the devolved nations using the Barnett formula, rather than maintaining a separate, ring-faced allocation as has historically been the case.
Previously, EU funding for UK agriculture was allocated across the UK nations under the Common Agricultural Policy (CAP) formula, based on rural and farming criteria such as the size, number and nature of farms. This resulted in 9.4% of the total UK agriculture budget coming to Wales when we were members of the EU.
However, the FUW has warned the UK Treasury’s decision to ‘Barnettise’ the block grant for each devolved nation, a calculation based on population rather than farm and rural characteristics, could see Wales’ proportion of total UK agricultural funding fall drastically.
Writing to the Secretary of State for Wales, FUW President, Ian Rickman, has sought urgent clarity from the UK Government on the funding reform - citing a worse case scenario ‘Barnettisation’ of agricultural funding that could see Wales’ proportion of total UK agricultural funding fall from 9.4% to around 5% - equal to a cut of around 40% in funding.
The FUW has argued that despite an additional £1.7 billion being made available to Wales as a result of the Budget, this additional funding has been linked to investment into schools, housing, health and social care, and transport. If agricultural funding has been effectively 'Barnettaised' (5% of UK allocation rather than 9.4%) as a result of the Budget, there could be serious implications for Wales’ farmers and agricultural sector.
The FUW’s concerns were cited in the House of Commons by Liz Saville Roberts MP and Ben Lake MP during a debate on Rural Affairs on Monday (11 November).
Commenting, Ian Rickman, FUW President said:
“While the Welsh Government will ultimately have the final word on the Welsh agriculture budget, Barnettisation, or any reduction in Wales’ agricultural funding by the Treasury will further undermine the industry - and fail to reflect inflation and the plethora of public goods farmers are increasingly expected to deliver.
We’ve already experienced the anger, frustration and fear within the agricultural sector following the UK Government’s lack of clarity regarding the changes to the Agricultural Property Relief (APR) and Inheritance Tax. This continued lack of clarity regarding the funding being made available to Wales and the devolved nations is a further concern for an industry already on its knees, and I do hope the UK Government will be able to provide urgent clarity on these matters."