It’s often said that things come in threes, and for Welsh farmers this does seem particularly true at the moment.
November started with widespread concern across the sector following the UK Government’s Budget and the changes to APR and inheritance tax. As displayed on the streets of London, the changes have sparked genuine fear within the sector over the long-term sustainability and succession plans for farms. Meanwhile it is increasingly apparent significant questions remain surrounding the Treasury’s figures.
Second came the announcement surrounding the revised Sustainable Farming Scheme at the Winter Fair last week. It’s fair to say the latest proposals have fared better than the original scheme that was launched earlier this year. Whilst there has been progress, the devil remains in the detail; both in regards to the proposed payments and economic assessments. Getting this right remains key for the future of Welsh agriculture, the environment and our rural communities.
Last, and certainly not least, we now await the Welsh Government’s draft Budget next week, with the Welsh Rural Affairs settlement vital to farmers and our rural communities.
We know Welsh farmers have seen a drastic reduction in funding post-Brexit. UK Government’s replacement funds for the previous European Union Common Agricultural Policy has fallen significantly short of historic values. For example by the end of the current financial year, Wales will have received around a quarter of a billion pounds less in funding for agriculture and rural development than could have been expected had the UK remained within the EU. This equates to a loss of around £15,000 per Basic Payment Scheme (BPS) claimant in Wales since 2019.
This has meant a shrinking of the Welsh Rural Affairs budget by £37.5 million within the 2023-24 financial year, whilst the publication of the Welsh Government draft budget for 2024-5 revealed a further year-on-year cut of £62 million. This equated to a drop of around 13% - the largest relative reduction of any of the Welsh Government’s departmental budgets.
Whilst we appreciate the wider financial pressures faced by the Welsh Government, this disproportionate cut in funding for rural affairs remains a blow. This is even more of a concern at a time when Welsh farmers are expected to deliver an ever increasing range of sustainability and environmental objectives, while also producing food.
Looking forward to the upcoming budget, it’s vital that at the very least the expected £340 million is allocated to the Welsh Rural Affairs budget. As part of this, maintaining BPS payments at current rates must be a priority. We know 80% of farm business incomes come from BPS payments. With 50,000 people working in agriculture in Wales, and being part of a wider food and farming sector worth over £9 billion to Wales annually, the economic, employment and social implications of any cut in BPS could be drastic for the industry and rural Wales.
Whilst retaining BPS at its current level will be a priority, it’s also essential that the entire Welsh Rural Affairs budget is increased in line with inflation wherever possible, particularly given the increased allocation of total funding for Wales from the UK Treasury.