As the saying goes, blink and you’ll miss it. 2022 has been another challenging and busy year for the FUW Group and I must thank all the staff and officials for their continued hard work in making sure we have thriving, sustainable family farms in Wales. We have said good-bye to a few familiar faces this year and I thank the former members of staff who have diligently served the Union for so many years, with special thanks to Peter Davies and Kate Ellis-Evans.
The topics we have dealt with have been far and wide, ranging from land grab issues, the ‘NVZ’ regulations, animal health concerns, climate change and tree planting targets, the first ever Welsh Agriculture Bill that will change how we farm for generations to come, as well as many political ups and downs in Westminster. It’s fair to say that we were kept on our toes throughout the year.
2022 has been a challenge for the UK economy with inflation rates continuing to exacerbate pressures on domestic households as well as businesses and food producers in particular. At the start of the year, our Milk and Dairy Produce Committee warned that rising energy prices were - and are still - not sustainable for the sector. The warning came immediately after reports from dairy farmers of energy costs rising by up to £1,000 a month.
Not ones to sit on our hands and ask what others can do for us, we held a constructive meeting with the Minister for Rural Affairs and North Wales, and Trefnydd Lesley Griffiths to highlight and discuss actions the Welsh Government should take to mitigate the impacts of the Russian war on Ukraine. We warned back in March that the war was having and will continue to have major impacts on our food supply chains and input costs, especially as the UK relies on Ukraine and Russia for around thirty percent of its maize as well as a number of other ingredients used for animal feed, and fertiliser, which at the time was hitting around a thousand pounds per tonne.
As such, we launched our 5 Point Plan for UK Governments which we believe must be implemented in order to relieve pressures for farmers, food producers and consumers in the immediate term, while bolstering our food and energy security in ways which reduce the long term dangers of exposure to global emergencies.
We therefore welcomed the UK Government’s announcement in September which outlined plans to help cut energy bills for businesses, but warned that it might have been too little too late for some. It will take years for businesses to fully recover from the ongoing energy crisis and current inflation rates, and once the support package had been announced, we urged the UK Government to extend the price caps for businesses beyond March 2023.
Speaking of financial support, we welcomed the Welsh Government’s announcement that the 2022 direct payment budget will be maintained at 2020 and 2021 levels. The Minister’s decision recognised the importance of the direct support budget not only to the 16,000 or so farm businesses that rely on it, but also the many more tens of thousands of businesses that benefit from these payments.
We shared the Welsh Government’s frustration and anger that the UK Government’s promise to replace EU funding in full had been broken. Welsh farmers had already lost £137 million as a result of the autumn 2020 spending review, and in November 2021 it was announced that the budget for agriculture would be cut by a further £106 million compared with what was promised.
The Union has also been proactive in addressing the worrying trend of Welsh farmland being sold to investors seeking to capitalise on the growing carbon market and high timber prices. Afforestation is also being driven by a combination of Net Zero targets, an increasing demand for carbon offsets and Welsh Government tree planting targets.
To help address concerns regarding this trend, we hosted a special breakfast webinar back in January. We heard from New Zealand based 50 Shades of Green campaigner Mike Butterick, who is also a Wairarapa beef and sheep farmer. Mr Butterick outlined how carbon market investors in New Zealand are driving an unsustainable loss of farmland to blanket plantations of unharvested exotic pines.
Figures obtained by the FUW have shown that 75% of the afforestation applications in Wales for over 50 hectares of planting are from charities and private companies based in England, with a 450% increase in afforestation Environmental Impact Assessment (EIA) applications to Natural Resources Wales (NRW) from 2015 to 2021. Only 20% of applications were from private individuals or businesses based in Wales. We are adamant that reaching Net Zero as an industry and a country must be done with farming as part of the solution.
We were also robust in our response with regards to bovine TB and expressed extreme concern that the Welsh Government Refreshed TB Eradication Programme consultation was produced without any assessment of the ground-level impacts of the proposals. We also highlighted that the proposal to move to average table values for TB compensation would have reduced the compensation received by the industry in 2020 - 2021 by around £5 million.
The Welsh Government must adopt a co-production approach when developing future bovine TB policies following an ETRA Committee enquiry on the latest Refreshed TB Eradication programme consultation. The ETRA Committee report, which was published in May, made a total of 14 recommendations to the Welsh Government following the enquiry. These included ensuring that industry are equal partners in policy development, conducting further research on the transmission of TB between wildlife and cattle and undertaking a detailed impact assessment on potential changes to the TB testing regime.
Ahead of the Royal Welsh Show in July, the Welsh Government published its latest proposals for a future Sustainable Farming Scheme (SFS) in Wales which set the agenda for numerous meetings during the busy week in Llanelwedd.
In November, we formally responded to the proposals following extensive consultation with our membership across Wales, stressing that whilst significant progress has been made, some major concerns and obstacles remain.
With the future of agricultural policy in mind, we saw the first draft of the Agriculture (Wales) Bill which was laid in front of the Senedd along with its supporting documentation in September by Minister Lesley Griffiths.
This Bill, if designed appropriately, represents a chance to develop farming policies which are tailored for the needs of those living and working in Wales and underpins the biggest change for Welsh agriculture since the UK joined the European Union.
Since the Brexit referendum, we have stood our ground and argued for the principles of Sustainable Land Management (SLM) to be broadened to include the economic sustainability of our family farms, the sustainable production of safe traceable food, Welsh culture and our language.
We were therefore pleased to see that the Bill sets out four SLM objectives which include the production of sustainable food and the sustainability of the Welsh language, each of which will be required to contribute to the well-being goals.
However, we renewed our call for the addition of a fifth objective in the Agriculture (Wales) Bill which explicitly seeks to ensure that farm economics and viability are encompassed under the Welsh Government’s SLM framework at an Environment, Trade and Rural Affairs (ETRA) Committee evidence session held in Cardiff.
Moving onto the Water Resources (Control of Agricultural Pollution) (Wales) Regulations, we welcomed the publication by the ETRA Committee of its review of the ‘NVZ’ regulations which took into consideration concerns we raised in our written and oral evidence - and we called for the recommendations to be implemented in full.
Our attention then turned to ensuring the Welsh Government, and Plaid Cymru as part of the cooperation agreement, gave the report the attention it deserved when responding to the committee’s recommendations and sought to mitigate the severe consequences of the regulations.
Ahead of the debate, a written statement from Minister Lesley Griffiths, which set out intentions to delay the implementation of the annual whole farm nitrogen limit of 170kg per hectare and consult on a licensing scheme to increase that limit, offered a welcomed opportunity to influence change.
The statement recognised that as a result of uncertainty, some farm businesses will have delayed taking investment decisions and making the necessary preparations.
In recognition of these circumstances, the Minister set out her intentions to consult on a licensing scheme this autumn to be operational until 2025 and provide a short extension of the implementation of the whole farm nitrogen limit of 170kg per hectare until April 2023.
However, this is just one regulation out of forty-six set out in this piece of legislation and therefore the long term implications of these regulations as a whole for our members must be considered.
The Welsh Government will also be providing an additional £20 million in extra funding to support compliance with the regulations, and will accelerate its work to encourage potential alternative technological solutions using the Regulation 45 mechanism.
The extra funding will be a mere drop in the ocean when we consider that the potential infrastructure costs for Welsh farmers is upwards of £450 million by now given current inflation rates of 25% for construction materials.
However, given that the Welsh Government is committed to using the Regulation 45 mechanism to consider potential alternative technological solutions to certain regulations, and that they will consider the outcome of the specific Regulatory Impact Assessment and be required to review the effectiveness of the regulations in April 2025, we still firmly believe that the regulations set to be introduced in August 2024 should also be delayed.
While this announcement will provide some breathing space for Welsh farmers over the next two years, it is outrageous to expect Welsh farmers to build new slurry stores by August 2024 with the support of the additional funding, only for the Welsh Government to consider and implement alternative technologies in 2025 which may then negate the need for closed periods and set slurry storage capacities in the future.
We also submitted a suite of alternative measures to the regulations which urged the Welsh Government to consider delaying the regulations in order to relieve pressures on farmers; consider other factors such as the financial implications for farming businesses when reviewing the regulations and utilise technologies to allow for a shift away from prescribed storage requirements and fixed closed periods, alongside a number of other proposals.
Towards the end of April we described plans to delay border checks on goods imported from the EU for a fourth time as a ‘global disgrace’ saying that the move will extend concessions for foreign businesses that ‘may as well be deliberately aimed at undermining UK farmers and producers’.
Checks on imports from the EU should originally have been introduced in January 2021 when the Brexit transition period came to an end, but the failure of UK governments to prepare border inspection posts meant they were not implemented at that time and have been delayed three times in the subsequent 28 months. EU countries got their act together and started implementing full checks on our exports from the UK on 1 January 2021. Yet despite it being more than five years since Theresa May announced that the UK Government intended to pursue a hard Brexit policy, and that such border checks would be needed, the UK is still not ready.
At the same time the UK Government continues to pursue the signing of fully liberalised trade agreements with Australia and New Zealand that their own figures confirm will be damaging to our food and farming sectors and undermine our food security.
We need look no further than what is happening in Ukraine and in relation to gas and fuel supplies to see how rapidly things can change on the global stage, yet the UK Government’s trade policy is recklessly undermining our food security by shifting reliance to countries that are tens of thousands of miles away.
We also repeated our concerns about the current Australia trade deal and its impacts on UK agriculture when giving evidence to the Welsh Senedd‘s ETRA Committee. There's a natural concern that the full liberalisation of the trading of agricultural goods does risk the displacement of Welsh and UK food production.
Although the UK Government impact assessment implies an estimated loss of gross output for Wales's beef and sheep sectors of £29 million, this needs to be considered in the context that the UK-Australia deal is likely to set a precedent for future trade deals. The cumulative effect that we would expect from trade deals with countries such as New Zealand and others within the CPTPP means that that £29 million then becomes much greater, in the longer term at least.
We also made the most of the opportunity to give evidence to the Trade (Australia and New Zealand) Bill committee on 12th October. Whilst the Trade Bill refers specifically to the procurement sections of the trade deals and, if passed, will be the final piece of the jigsaw for the UK Government to ratify the deals, it nonetheless gave us the opportunity to voice our concerns regarding potential impacts and the current scrutiny process.
If New Zealand and Australian producers can apply for procurement contracts in the UK, it acts as a further incentive to flood our domestic markets. In the grand scheme of things, it’s unlikely that UK producers would be able to compete for procurement contracts in their countries due to differences in scale and production methods, but this simply emphasises the importance of directing procurement policies in the UK towards Welsh and British produce.
Members of Parliament need to ensure that the scrutiny of any future trade deals is effective so that their powers are not undermined as Politicians. The fact that the government did not have the opportunity to hold a debate under the CRaG process, and that this Trade Bill must be passed in order to change domestic Law to be in line with what has been agreed, and to ratify the deals, shows how rushed and ill-thought through the scrutiny process has been.
We reinforced our concerns with the then Secretary of State for Environment, Food and Rural Affairs, George Eustice, who more recently told MPs in Parliament that the UK "gave away far too much for far too little in return" despite starting negotiations "with the strongest possible hand", and that negotiators were undermined by former Minister Liz Truss demanding that a deal with Australia be struck before the G7 summit in Cornwall in June 2021 - confirming everything the FUW has stated throughout.
Our political engagement has been in full swing again this year, meeting regularly with representatives from every political party in the Senedd and Welsh MPs and Government Ministers.
On the Westminster front, trade deals, the US market for lamb and sustainable food production were at the top of the agenda when FUW officials met with Parliamentary Under-Secretary (Wales Office) and Monmouthshire MP David TC Davies, Wales Office representative in the House of Lords, Baroness Bloomfield, Lord Wigley, and we look forward to meeting with Lord Morris of Aberavon in the new year.
As well as meeting with MPs in Westminster and Cardiff Bay, we have also taken the opportunity to welcome representatives onto members’ farms and utilised our attendance at the Welsh Labour, Welsh Conservatives and Plaid Cymru party conferences to make sure the voice of Welsh farming is heard.
On devolved matters, we met with the Welsh Government Minister for Economy, Vaughan Gething to discuss the vital contribution agriculture makes to not only the wider rural economy but also the Welsh economy as a whole. As well as meeting with the Minister for Education and the Welsh Language, Jeremy Miles, where we reiterated the significance of the Welsh language in many rural communities across Wales and how important farmers and the agricultural industry will be to reaching 1 million Welsh speakers.
We also met regularly with the Minister for Rural Affairs, Lesley Griffiths, and both opposition agricultural spokespersons Mabon ap Gwynfor MS for Plaid Cymru and Sam Kurtz MS for the Conservatives, raising the issues of most importance to our members throughout the year. Including warning of the impacts of the Russian invasion of Ukraine and suggesting mitigating measures, as well as the Water Resource (Control of Agricultural Pollution) Regulations, the ongoing co-design of the Sustainable Farming Scheme and the Agriculture (Wales) Bill.
On top of that, we have also raised these issues in countless meetings with MSs, MPs and Cllrs as well as engaging at a local level whether at a Show or the local Market, to discuss the issues facing each of our Counties.
As this year draws to an end and we start preparing for the opportunities and no doubt challenges of 2023, I look forward to FUW and FUWIS staff taking part once again in the Run1000 challenge in January, details of which will be shared at the start of the new year. It has been a roaring success in previous years and we are looking forward to being part of one of the biggest walking and running challenges, which aims to inspire rural communities to take to the countryside to help improve their mental health.
FUW teams across the country will also be hosting a variety of farmhouse breakfasts, which provide an opportunity to promote the quality premium local produce that farmers provide for us every day of the year, and throughout breakfast week we will put a spotlight on the importance of our rural economy, as we did this year and will do for many years to come. These initiatives of course also raise vital funds for our charitable cause the DPJ foundation. Keep an eye out for details in the new year for a breakfast happening near you!
On a final note this year, I would like to thank our Chief Executive Guto Bebb, all of our staff across the FUW group, our officials and chairpersons for all of their hard work throughout the year. During another busy year of hybrid working I think everyone has done an amazing job in serving our members, lobbying and highlighting the excellent work that is being done on behalf of members and customers. I will raise a glass to you all on Christmas day and hope that you get to enjoy a peaceful and Merry Christmas and I wish you all the very best for the New Year.
Glyn Roberts