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.