The Farmers’ Union of Wales has today said it believes that irrespective of what trade deals are in place post-Brexit, within the UK, Welsh farmers will compete against their counterparts in other devolved regions.

As such, the Union says that the rationale for having a common policy across the UK which minimises unfair competition and market distortion remains unchanged.

Under the current Common Agricultural Policy, Member States are allocated Pillar 1 and Pillar 2 budgets which must be spent on direct support and rural development over the seven year period of the policy.

That money must be spent by Member States and regions within a set of overarching EU Regulations, aimed at minimising unfair competition between regions and ensuring similar rules are applied in regions and on farms.

Those rules allow a degree of flexibility, allowing administrations such as those in Wales, England, Scotland and Northern Ireland to implement payment systems and policies which differ, but comply with the overarching principles of the CAP.

“While there is currently no clarity as to what system, if any, should replace the Common Agricultural Policy once the UK leaves the EU, some have argued for a single agricultural policy and budget to be governed by the UK Government, thereby bypassing devolution,  while others believe devolved administrations should have complete autonomy over agricultural budgets and policies,” said FUW President Glyn Roberts.

The Union President added that the way in which budgets are allocated by UK Governments, and the allocation of devolved budgets through the Barnett Formula, further complicate matters, and represent a significant threat in terms of volatility and any allocation of agricultural funding to Wales.

The FUW therefore suggests that a UK agricultural framework should be put in place which prevents unfair competition between devolved regions and secures and protects adequate long term funding for agriculture, while also respecting devolved powers over agriculture and the need for flexibility within that framework, which allows devolved governments to make decisions which are appropriate for their regions.

In addition, specific ring-fenced funding for agriculture should be allocated to Wales outside the Barnett Formula, and should be administered by the Welsh Government.

Tariff-free access to EU markets is essential, particularly for the Welsh sheep sector, the Farmers’ Union of Wales has said today.

According to the FUW, post-Brexit imports to the UK should be subject to genuine equivalence in terms of environmental and animal health standards and any agreement which allows free access to UK markets for EU agricultural produce must be accompanied by financial support for UK producers equivalent to the support received by EU farmers.

The Union further stresses that the EU’s New Zealand sheep meat quota should not be passed back to the UK as this is likely to add significantly to pressures on the sheep sector post-Brexit.

In addition, the FUW renewed its call on governments to proactively support UK food and farming through their own procurement policies, and by ensuring competition rules favour rather than disadvantage UK industries

For almost half a century, and most recently as members of the EU, the UK has been part of a single European market, which bans payments from being levied on goods travelling between the UK and other Member States. Critical to the agreement is the imposition of common tariffs on any goods entering Member States of the EU. Inherent to membership of the single market is the free movement of people.

FUW President Glyn Roberts said: “For agriculture, membership of the customs union has meant significant protection from non-EU food imports, increased competition from produce from other Member States, and unfettered access to EU markets – all within a single farm support framework and system of common rules.

“As a single trading block, the European Union negotiates trade deals with other countries as a single entity, for example through the World Trade Organisation (WTO), while countries which are not members of the EU must negotiate alone, and in the absence of trade agreements, are subject to default WTO trade rules and tariffs, which impose significant restrictions on trade.

“As such, establishing trade deals with other countries and trading-blocks – including the EU – is a major priority and challenge for the UK, and one regarding which there are a broad range of opinions.”

Most concerning for farmers Mr Roberts added, are proposals by senior politicians from across the political spectrum to increase imports of cheap food from countries with environmental, animal health, and in some cases human rights standards which fall well short of those legally required in the UK.

“Such policies would not only have a severe detrimental impact on UK agriculture and rural communities, but would also lead to an overall increase in environmental degradation and a fall in animal welfare standards – both issues on which the UK electorate has strong views.”

The Union believes that in terms of Wales’ three key agricultural products, namely milk, beef and lamb, there is significant concern regarding the implications for all three sectors.

“The loss of nearby and relatively affluent continental markets, and the degree to which these can be realistically replaced by markets which are much further afield, given the costs, logistics and reality of gaining similar access to alternative, by definition more distant markets is a real concern.

“In addition, if WTO or similar tariffs were to be applied to UK exports to the EU, tariffs for some products would markedly reduce the value of sales to Welsh producers,” said Mr Roberts.

Superficially, trade balance figures suggest that leaving the EU’s free trade area may benefit some products through the removal of imported produce. However, such benefits could only be realised if there is political support for trade policies which reduce imports from all other countries.

Complicating such perceived benefits is the seasonality of production, and the degree to which sectors rely on exporting certain types of products and cuts (‘quarters’) which do not generally appeal to UK consumers in order to balance carcass and product value.

“This is a particular concern for the Welsh sheep sector, where production is necessarily extremely seasonal and includes a significant proportion of lighter lambs (around 15 per cent) for which there is little domestic demand, and exports to the continent of certain cuts and offal make up a significant proportion of carcass value for the same reason,” added Mr Roberts.

Over three quarters of the Welsh countryside has some environmental or conservation designation, highlighting the important role farming continues to play in maintaining our natural resources, the Farmers’ Union of Wales has said today.

In its Brexit Briefing Paper, the Union stresses that over recent years, that role has expanded significantly, particularly in terms of renewable energy production. Welsh farming, the FUW says, has an indispensable part to play in terms of our need to adapt to changing weather patterns, increased environmental pressures, carbon sequestration and meeting greenhouse gas reduction targets.

FUW President Glyn Roberts said: “Wales also has a long history of implementing agri-environment schemes, and while numerous concerns exist regarding the punitive nature of the current Glastir scheme, Brexit provides a significant opportunity to improve scheme designs in a way which better meets the needs of both farming and the environment.”

Mr Roberts further said that it must be recognised that further moves towards policies focussed on agri-environment funding risk undermining the economics of agriculture and the livelihoods of all those involved in related supply chains, due to restrictions under World Trade Organisation rules.

Specifically, while many politicians and charities have advocated ‘paying farmers for the delivery of environmental goods’, Annex 2 of the WTO Agreement on Agriculture states that “The amount of [agri-environment] payment shall be limited to the extra costs or loss of income involved in complying with the government programme.”

“This severely limits the degree to which agri-environmental payments can deliver the broad economic benefits currently delivered through direct payments,” added Mr Roberts.

In order to ensure Welsh farming can continue to play such a role, the FUW maintains that systems must be introduced which ensure farmers are more fairly rewarded for their contributions to water management, carbon sequestration and the delivery of other public goods.

The infrastructure and investment needed to increase on-farm renewable energy production must be increased, and barriers removed and support for agri-environment schemes must be continued, while recognising the far-reaching adverse consequences of an inappropriate balance between direct support and agri-environment payments, given the limitations of WTO rules.

In addition the FUW warns that the temptation to abandon areas of countryside, as advocated by some, and in particular supporters of ‘wilding’, must be resisted given the severe economic and environmental impacts such policies would have in areas where species, habitats and communities are reliant on agriculture and grazing animals in particular.

Since the outcome of the June 23 referendum was announced, the Farmers’ Union of Wales has called for the Brexit timetable to be aligned with the current EU budgetary period – the Multiannual Financial Framework, which runs to 2020, and lays down the maximum annual amounts which the EU may spend in different policy areas.

The Union believes that it is in the interests of all countries for the UK’s withdrawal from the EU to take place as smoothly as possible and over an appropriate transition period, as opposed to the ‘hard Brexit’ advocated by some.

“We have welcomed the recent suggestion by Prime Minister Theresa May that a transition period may be sought during negotiations with the EU. The FUW is clear in its view that a support policy is needed post-Brexit if severe repercussions are to be avoided, and that devolution should be respected within an overarching UK support framework,” said FUW President Glyn Roberts.

However, there is general acknowledgement of the need to develop ideas in parallel with decisions made during trade and domestic negotiations, and that identifying specific detailed policies would be premature at this time.

“Our members have suggested a number of overarching principles that are aimed at better focussing agricultural support where it is genuinely needed, such as a needs-based allocation of post-Brexit budgets based upon the proportion of a region, which is subject to handicaps such as adverse climatic conditions and poor soil productivity, socio-economic constraints and the proportion of businesses routinely affected by market failure,” added Mr Roberts.

Other principles suggested by the FUW include the introduction of a cap on all future payments for recipients across the UK (no cap is currently applied in England) and that greater emphasis is placed upon active farmers and food security.

The Farmers’ Union of Wales has welcomed today’s (Monday, November 28) announcement by Cabinet Secretary for Environment and Rural Affairs Lesley Griffiths that almost 90 % of Basic Payments will be made on the first day of the payment window (Thursday,December 1).

Speaking at the Royal Welsh Winter Fair, FUW President Glyn Roberts said: “The Welsh Government has hit a high payment target and we are grateful to all the staff who have worked hard to ensure money can be released on the first day of the payment window.

“Last year our farmers faced a considerable delay in receiving the BPS due to the extremely complicated process of completing the Single Application Forms, so we are grateful that these problems have been resolved in most cases.

“Most of the money arriving in the farm account through the BPS will be going straight out to secondary and tertiary businesses. Hundreds of businesses are solely reliant on Welsh agriculture. Look at all the traders and businesses exhibiting at the Fair today. Any delay in the payment of the Basic Payment would have a direct impact on these businesses and their employees.

“We have been working closely with Welsh Government to achieve this result for our farmers here in Wales and are looking forward to continue in our close working relationship in the future. The co-operation between all industry stakeholders and Welsh Government illustrates that we can achieve great things for Welsh farming if we work collaboratively.”

The Farmers’ Union of Wales has launched a Brexit Briefing Paper at the Winter Fair, which provides a summary of the key issues facing our industry post Brexit, and some of the possible outcomes and solutions for agriculture and all those who rely on it - as well as the Union’s latest positions on key policy areas.

As is the case for most government departments and industries, the issue of Brexit has come to dominate most of the areas of work dealt with by the Union.

Speaking at the launch, FUW President Glyn Roberts said: “Since June 23, the Farmers’ Union of Wales has held scores of meetings with members across Wales to discuss the implications of the referendum outcome and the way forward for Wales.

“Five months on, there remain far more questions than answers in terms of the process of leaving the EU and the implications for Welsh and UK agriculture. Our members are clear in their view that policies must be developed cautiously in order to reflect and influence emerging political decisions.

“Notwithstanding this, the FUW has already agreed on a number of key principles aimed at protecting Wales’ interests, while numerous detailed proposals have been put forward by members.

“Meanwhile, the Union has worked alongside others to gather and analyse data on the current role played by agriculture in Wales and the possible implications of different outcomes for our industry and wider society.

“I am delighted to launch the FUW’s Brexit Briefing Paper here today, which provides a summary of the key issues facing our industry post Brexit, and some of the possible outcomes and solutions for agriculture and all those who rely on it.”

Work carried out by the FUW in relation to Brexit negotiations and gaining support for agriculture in Wales is further outlined in the briefing paper.

Mr Roberts added saying that: “In addition to meetings with members across Wales, the FUW has met regularly with Ministers, MPs, AMs, civil servants and key stakeholders, emphasising that support should be maintained for sectors at levels which do not compromise either family farms or rural economies, that agriculture and domestic food production must be given priority during all trade negotiations with other countries and trading blocks, that bureaucracy and restrictions must not adversely impact or hamper Welsh and UK agriculture and that the procurement of Welsh and British produce should be the default position for all UK public sector bodies.

“The Union has emphasised that robust steps must be taken to ensure supermarkets and other private sector bodies support domestic producers and do not act in a way which undermines UK food production or the viability of our agricultural sectors and that in line with public opinion, the family farm must be recognised as the powerhouse of our rural economies and the most appropriate source of UK agricultural produce.”

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