FUW PRESIDENT GARETH VAUGHAN'S SPEECH TO THE UNION'S AGM

Good morning Minister, ladies, and gentlemen, and honoured guests. A very warm welcome to you all, and thank you for having taken the time to attend our Annual general Meeting at this busy time in the farming calendar.

It gives me great satisfaction to be able to stand here and, for the second year running, report on a more positive year for Welsh agriculture, when set against the dismal ? sometimes negative ? incomes received by the industry over a period which lasted more than a decade.

As farmers, we are often accused of moaning, so it is a pleasant experience to be able to welcome the direction in which incomes have moved over the past couple of years, particularly when we look at the misfortune of those who have lost so much due to the current recession.

But that upward movement has been from a very low base, and while the industry has continued to see long?overdue improvements in livestock prices, dairy farmers have seen a fall in incomes and an overdue delay in terms of global commodity price increases being passed back down the chain to primary producers.

And despite the overall improvements in market returns, livestock prices still struggle to cover input costs, while farm income figures show that most farm types would be unsustainable were it not for Single Payments.

These figures point to the central importance of the Common Agricultural Policy ? and particularly direct payments ? to our rural economy.

As far as the Welsh payment system is concerned, the anticipated movement from our historical model towards flat rate single payments will mean significant upheaval for many farm businesses, and this is highlighted by the detailed analysis published by the FUW in July, which represents the most comprehensive report on the issue published to date.

We therefore have a duty not only to look at ways to minimise that disruption, but also to inform the debate on possible future models, and in this context I believe the Assembly Government's decision to disband the Common Agricultural Policy Stakeholders Group, which was set up to look at this important issue, was a significant backward step for Wales. Moreover, it is one that stands in stark contrast to the pro?active approach taken in Scotland by the establishment of the Brian Pack inquiry into the future of agricultural support.

At a European level, it is the issue of the CAP budget, and the reform of the overarching CAP framework post 2013, which are currently dominating debates, and I was recently pleased to hear reports of our new Secretary of State for the Environment, Food and Rural Affairs referring to a future CAP which helps to unleash the potential of job creation and innovation within the farm sector: aspirations which we would all no doubt support.

However, I am deeply concerned by other comments made by Mrs Spelman during an informal farm council meeting, which appear to criticise the CAP budget, advocate a movement away from direct payments, and imply that consumers should have access to cheaper, presumably imported, food.

Perhaps too much should not be read into these comments, given the relative infancy of the new coalition Government. However, I am concerned that they were very much in the same vein as the previous Government's policy, which was to increase cheap food imports while all but abandoning agricultural support and the CAP framework.

The folly of such a policy is highlighted in two significant pieces of work commissioned by DEFRA and published during the past year, and while I could quote a long list of figures from that research ? many of which would make your hair stand on end ? the bottom line is that it shows the complete devastation that would befall our rural communities and wider environment should we undermine a framework which supports agriculture, not to mention a further erosion of our food security and an increase in food miles.

Conversely, I believe that the CAP should be viewed as a tailor?made toolbox with which we can address the challenges that growing populations, climate change, rising sea levels, and peak oil production represent to European food security. These challenges are imminent, and will significantly affect future generations, so do we really want to dismantle our toolbox and empty its contents into the bin at this critical time? Of course not - that would be madness!

And to those who talk about rewarding farmers for the provision of public goods, I agree entirely, but I would emphasise this: There is nothing that benefits the public more than the provision of food, produced to the highest standards. To abandon this as a core policy would mean exporting and amplifying environmental problems in a way which would cause untold damage for future generations.

Returning to issues closer to home, the Union's objection to the abandonment of Less Favoured Area payments in favour of the Glastir scheme is well known, and members will no doubt raise their concerns with the Minister later on.However, the revelation that ninety per cent of English hill farmers who previously received LFA payments have not signed up to the English equivalent of Glastir comes as a stark warning of the need to get things right. The Union strongly encouraged its members to 'tick the boxes' on the IACS forms to express interest in the scheme, although I am very mindful of the confusion, based on lack of information and constant changes to the scheme, which is likely to impact on actual applications later this year.

The Assembly Government continues to expect farmers to make business decisions based on sketchy information, and we firmly believe that a twelve month deferment of the scheme is still warranted, so that the All?Wales, targeted, and common land elements of the scheme are finalised and launched together to facilitate business planning, and so that tenants and landlords alike have a clear understanding of the implications of signing up to the scheme.

And in terms of the ambitious timetable for the Glastir application process, I would like to take this opportunity to emphasise the indispensable role that Farm Liaison Officers already play in advising farmers, especially during the IACS period, and the importance of maintaining and indeed enhancing this service, in light of Glastir.

Failure to make sufficient trained staff available to deal with Glastir applications could also leave farmers open to financial penalties due to simple administrative errors, and while the hundreds of thousands of pounds in penalties that have been repaid to FUW members stands as testament to the hard work of our staff in dealing with appeals, the combination of Glastir and the current penalty system could lead to a significant escalation in unfair fines for farmers.

As far as access to the Glastir scheme is concerned, the decision to exclude woodland from the All Wales element, despite its being an important feature of previous schemes is baffling. For many farms, dairy in particular, this has one simple implication: they will be excluded from the Glastir scheme.

This seems a perverse approach, particularly given the role of woodland in terms of carbon sequestration, and I would therefore urge you, once again, Minister, to revisit this matter and allow the inclusion of woodland.

I believe the times I have stood here and not spoken at some point about bovine TB are few and far between. Well today we have at least two speakers ? Professors Glossop and Hewinson ? who will speak about TB, so I do not intend to dwell on the issue. However, it would be wrong for me not to express our ongoing respect for Elin Jones, Christianne Glossop, and all of those involved in the eradication programme, for their resolve in tackling this issue. We all share a common goal, which is to see healthy badgers and cattle living alongside each other. Others, it seems, have a different goal, which is to protect badgers, irrespective of their role in disease transmission.

Sadly, the scale of the bovine TB epidemic often serves to obscure other serious animal health issues, not just in cattle but also in sheep, and I hope we will go some way to redressing that imbalance with our other expert speakers, Lynfa Davies, and Hannah Pearce.

But firstly, I would like to welcome our Minister, Miss Elin Jones.

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