The Farmers' Union of Wales today reacted angrily to the Welsh Assembly Government's decision to reject a way of distributing an emergency EU fund for dairy farmers that would have favoured Wales' smaller producers.
Two distribution options were considered by the Assembly - Option 1: a payment of 0.2 pence per litre (ppl) of production during the 12-month period of greatest market disturbance (1 October 2008 to 30 September 2009) to each dairy farmer and Option 2: a two-tier payment comprising a payment of 0.5ppl on the first 100,000 litres of production plus an estimated payment of 0.15ppl on production over 100,000 litres during the specified period.
Both options had been considered by the FUW's 12 county branches and by the union's milk and dairy produce committee with the overwhelming majority favouring a two-tier mechanism on the grounds that, on average, smaller producers had higher production costs and were, by definition, unable to benefit from production bonuses and other production-related advantages.
"The two-tier system was also backed by members who stood to lose out under such a calculation," said committee chairman, Anglesey dairy farmer Eifion Huws.
"The decision, therefore, comes as a smack in the face for Wales's smaller family farms and I am extremely disappointed that the Minister has not opted for a more equitable system.
"It is claimed that if Wales had chosen an alternative option to the rest of the UK, the payments could not be guaranteed to be made by the deadline of 30 June 2010 by the Rural Payments Agency (RPA).
"Yet there are less than 2,300 dairy farms in Wales, and a two-tier calculation based on milk production is so straightforward a child could do it. If it is true that the RPA couldn't undertake a simple calculation for such a small number of holdings before July then that demonstrates that the agency is both incompetent and unfit for purpose.
"However, my main concern is that the Minister has simply bowed to pressure from the other devolved regions. While the moneys involved are not substantial, this sends out a damning message regarding the Welsh Assembly Government's support for smaller family farms."
Announcing she had selected Option 1, Rural Affairs Minister Elin Jones said it was chosen by the majority of farmers and industry representatives throughout the UK but she admitted in Wales their consultation gave a 50/50 split between both options.
Farmers will be receiving their payments from mid-April 2010 until the end of June.