THE VULNERABILITY of Welsh agriculture has been highlighted today with the latest Welsh Government Farm Income forecasts predicting a decline in the profitability of farming across all sectors.
The figures, based on Farm Business Survey results for 2013- 2014, show that average farm business income across ‘All Farm Types’ is forecast to decrease from £29,000 in 2013-2014 to £22,200 in 2014-2015 – a decline of around 24%.
For dairy farms, average farm business income is forecast to decrease by around 23%; cattle and sheep (LFA) farms are forecast to decrease by 22% to £15,000 while farm business incomes on cattle and sheep (lowland) farms are expected to decline from £28,600 to £23,100.
NFU Cymru President Stephen James said: “The industry saw falling farm-gate prices across all commodities during 2014. These figures provide the first official indication of the financial impact on Welsh farm businesses and highlight the cash-flow challenges that farmers are likely to face in the coming months. These are challenging times across all sectors – market volatility, a strong pound and significant cuts in direct payments as a result of the pillar transfer decision have taken a heavy toll on the industry over the past 12 months. The support of Government, banks and the supply chain is crucial to help us come through these difficult times.”
Mr James continued: “The GVA (Gross Value Added) figures from agriculture show increases of around 15% from £325.2m in 2013 to £374.3m in 2014. NFU Cymru believes this provides strong evidence of the positive contribution that agriculture makes to the economy of Wales. The opportunities for Welsh farming are clear – in the longer term global and domestic demand for food is set to increase. But for Welsh farmers and the economy of Wales to benefit, we need Welsh Government to establish the right conditions through its policy and regulatory framework. The Rural Development Plan 2014-2020 provides an immediate opportunity to put in place a suite of measures that support on-farm investment and enhance the competitiveness of agriculture and we look forward to the implementation of the schemes over the coming months.”
FUW President Emyr Jones said: “The combined impact of reduced farmgate prices, the Welsh Government’s 15% Pillar Transfer, a reduced CAP budget and a Single Payment exchange rate of £0.7773/€1 has had a catastrophic impact on farm incomes. The fact that sterling is continuing to strengthen against the Euro means there is ongoing pressure on prices, with the situation in relation to Greece not helping.”
Mr Jones said that the Union’s vociferous objection to the reduction of direct farm payments by 15% (the ‘15% pillar transfer’) was well publicised, but the decision could not now be overturned.
“We cannot control the exchange rate, and despite our fierce lobbying against it, the decision to transfer 15% has been made. The only area where there is flexibility to act is in terms of ensuring Rural Development funds are directed at bringing farm incomes back up, and not squandered.”
Mr Jones said that further changes to direct payment rates which would be decided upon over the coming months would also add to uncertainty and disruption for the industry, and would inevitably put further downwards pressure on many farm incomes.
“The figures announced today should come as a wake-up call to all those within Welsh Government who have not yet recognised the need for an RDP which is totally focussed on boosting the efficiency and profitability of farms.”
Plaid Cymru Parliamentary Leader, Elfyn Llwyd MP, told a meeting of the NFU in Birmingham: “We have just celebrated the anniversary of Magna Carta and have been reminded of the barons or the ‘over-mighty subjects’. Today’s ‘over-mighty subjects’ are the major supermarkets who seem to get away with undermining agriculture at every turn. I don’t know why the political establishment does not take them on and the need to do so has never been so urgent. The Groceries Code Adjudicator appears to me to be toothless. It needs to be beefed up to ensure that it encompasses milk production but also all primary producers so that they are not consistently undermined in the way that is happening.”
Urging action to support milk producers and secure a sustainable future for farming, he added: “We need to also consider a form of intervention to ensure adequate pricing of milk because for the first time in generations, the number of milk producers has fallen below 10,000 and continues to fall. We also need to ensure that rural development programme funding is used as effectively as possible, particularly targeting on-farm investment to improve skills, strengthen infrastructure and assist diversification where relevant. Farming remains a hugely important industry which holds together the fabric of rural society. We must ensure its future development and expansion for the good of everyone.”
New HCC Chair appointed
WALES’ Minister for Rural Affairs last week announced the upcoming appointment of a new Chair at Hybu Cig Cymru – Meat Promotion Wales (HCC).
Catherine Smith, a board member of HCC since 2017, will take over from incumbent Chair Kevin Roberts on April 1, 2021.
Catherine is a food business consultant with more than 20 years’ experience in the red meat sector in procurement, processing and manufacturing. She is also a farmer’s daughter and wife, who lives with her husband and three children on a mixed farm in Monmouthshire.
She will be the first woman to take on the role since the formation of HCC in 2003.
Lesley Griffiths, the Minister for Environment, Energy and Rural Affairs, announced the appointment on Wednesday, February 3.
The Minister said: “I would like to congratulate Catherine Smith for her upcoming appointment to the role of Chair at Hybu Cig Cymru – and would also like to thank outgoing Chair Kevin Roberts for all his work in the role.
“Catherine brings a wealth of experience to the role, having worked within the red meat supply chain for two decades and served as a board member since 2017.
“I am very pleased to be able to announce Catherine as the incoming Chair, particularly given she will be the first woman to come into the role – and I hope her appointment reflects wider trends in business across Wales, especially within the agricultural sector.
“She comes into the role at an especially difficult time, with the red meat sector responding both to the challenges posed by the Covid-19 pandemic, and the complexity brought about as a result of the recent end of the EU transition period.”
Catherine said “Having grown up in a farming family, and worked in the food sector for twenty years, I’m very proud to be appointed as Chair of Hybu Cig Cymru.
“My priority will be to deliver for our levy-payers; farmers and processors. This will mean building our red meat brands using inventive and effective marketing, helping our industry to be as profitable as possible, and aiming to lead the world in terms of quality and sustainability.
“HCC has responded to the challenges of EU transition and the Covid-19 pandemic with flexibility, determination and innovation. Building on these strengths the organisation will continue to deliver on the priorities set out in Vision 2025 and support the industry to build its profitability and resilience whilst working closely with Welsh Government and all stakeholders within the supply chain.”
Kevin Roberts, outgoing Chair of HCC, said: “The past few years have certainly had their challenges from issues outside our control.
“I’m proud of the way HCC has responded, growing exports of Welsh Lamb and Welsh Beef significantly despite the uncertainty of Brexit, and playing its part in driving a major growth in domestic retail sales to help both farmers and consumers during the COVID pandemic. This has come about with the help of a lot of hard work from Gwyn Howells and his team of staff.
“I wish Catherine well in taking over as Chair during the next exciting period for our sector. Some uncertainties remain, but as we look to the future our brands are very strong; we’re offering what consumers want – high-quality food, traceable right back to the farm, and world-leading credentials in terms of environmental and welfare standards.”
NFU Cymru President John Davies said: “I’d like to congratulate Catherine Smith on her appointment as the new Chair of HCC and thank Kevin Roberts for his work and leadership over the past four years.
“Catherine will be taking over at a pivotal time for the red meat sector in Wales as we seek a global market for our products, following our departure from the EU. Welsh red meat is a world-leader in both its quality and sustainability credentials and marketing these strengths, to a global audience, in new and innovative ways, must be a priority for the board.
“Covid-19 has presented unique challenges but also huge opportunities for our products. Consumers’ favourability towards the agricultural industry has never been higher and the pandemic has brought into sharp focus the need for a constant supply of high-quality food to our customers. As we leave the CAP and design new policies made here in Wales, we need to ensure that we develop a comprehensive food and farming policy. This policy must have an ambition for growth that allows us to capitalise on these great credentials in both our domestic and export markets, in order to deliver a vibrant and prosperous future for everyone involved in the red meat sector in Wales.
“I would like to thank Kevin for his sterling work on behalf of the Welsh red meat industry, being at the helm of the HCC board at a time of unprecedented uncertainty brought upon by Brexit. Throughout his time with HCC Kevin has overseen the publication of the organisation’s Vision 2025 strategy and just recently the Welsh Way document, a strong and robust evidence base to further build our sector as a global leader in sustainability.
“We look forward to working closely with Catherine to ensure HCC delivers for levy-payers across Wales.”
Farming bodies slam ‘narrow-thinking’ WG
WALES’ farming unions and Wales’ YFC have written to the Minister for Environment, Energy and Rural Affairs to express concerns around the future direction of Welsh agricultural policy, following the publication of the Agriculture (Wales) White Paper.
In a show of unity, NFU Cymru, the Farmers’ Union of Wales (FUW) and Wales YFC called upon the Minister, Lesley Griffiths MS, to pause and reconsider what a future policy should deliver for the people of Wales.
The three organisations have raised concerns that little has changed over three consultation processes and there remains a lack of ambition for the future of farming in Wales.
The letter states ‘the direction of travel proposed does not appear to reflect the uniqueness of Welsh farming, built around family farms delivering for our economy, our landscape, language and culture. Instead, and most worryingly, it looks as though we are implementing a policy based on a very narrow definition of public goods, policy thinking very similar to what we have seen emanating from elsewhere, rather than a policy ‘Made in Wales’.’
In a joint statement, NFU Cymru and FUW said: “Welsh farming is at a significant crossroads. The decisions taken by policymakers in the coming months will shape and impact the sector for generations to come. Leaving the EU has given us the opportunity within Wales to put together an ambitious policy that enables Wales to lead the way, securing the supply of safe, high-quality affordable food for all in society, delivering jobs and prosperous rural communities, all while enhancing the environment for the benefit of all.
“We have throughout this process recognised and embraced the need for change in the belief that the main opportunity from Brexit was to develop an agricultural policy in Wales for Wales that had its people, the land they farm, and the food they produce at its heart. Collectively we are ambitious for Wales and passionately believe that our sector can play a leading role in the major challenges facing society, not least climate change, all whilst feeding an ever-growing population with the highest quality food and drink produced by the best farmers in the world. Put simply our ambition is for Wales to be recognised as a world-leading country of excellence for climate-friendly farming and food production.
“We have a once in a generation opportunity to get this right and enable rural Wales, its people, communities, language, landscape and environment to thrive and as such we urge you to reconsider the direction of travel and work with us to develop a policy that is ambitious and enables us to reach our potential.”
Katie Davies, Wales YFC Chairman, said: “Thousands of young people from across Wales are desperate to forge a career within Welsh agriculture, supporting food and farming. It is imperative that we work together to find a way forward that is both ambitious and creates opportunities for the next generation.”
The White Paper, which stands no chance of getting on the statute book before May’s election, hails the Welsh Government’s consultations with stakeholders. Which stakeholders the Welsh Government has consulted with is not identified in the White Paper. However, the text shows no signs of addressing long-standing concerns about the Welsh Government’s drive to marginalise farmers in favour of voices more congenial to its metropolitan base.
Janet Finch-Saunders MS, the Conservatives’ Shadow Minister for Rural Affairs, praised the letter.
She said: “Farming and agriculture is in the DNA of Wales. Despite the pressures the sector faces even in the best of years, it’s still a big draw for many young people, and a major contributor to the Welsh economy.
“Years of Labour’s mismanagement of the sector based on viewing Wales through the prism of Cardiff Bay led to this letter. I must agree with the NFU, the FUW, and Wales YFC when they say the direction of travel proposed by the Labour Government does not appear to reflect the uniqueness of Welsh farming.
“Labour also seems to be hell-bent on policy ideas that are not ‘Made in Wales’, but ‘Made in Cardiff Bay for Cardiff Bay’.
“In short, the letter is an indictment of years of Labour’s mismanagement of the agricultural sector, a sector like all others that will need specific and thoughtful future policymaking now we have exited the EU, and are looking towards a post-pandemic recovery.
“One thing is clear: recovery for agriculture and other sectors will not come from Labour, but from a Welsh Conservative Government as ambitious and dynamic as the agricultural sector.”
NFU Cymru President’s New Year message
NFU Cymru President John Davies provides his New Year message, looking back over an unprecedented 12 months and assessing what lies ahead in 2021.
“2020 was a year the likes of which we’ve never seen. The Coronavirus pandemic has challenged all of society. My condolences go out to all of those who’ve lost loved ones to this disease. My thoughts are with all whose livelihoods have been affected by the knock-on effects that the pandemic has had on businesses and our general way of life. I’d like to place on record my heartfelt thanks to our NHS workers and those supporting them on the front line for their courage in tackling this global health emergency. So often the term ‘hero’ is attached to those in films or on the sporting stage, but if this year has taught us anything it’s that, in fact, the real heroes are those people in our communities who have gone to work – putting themselves at risk – to care for the sick and keep the rest of us safe. Diolch yn fawr iawn pawb.
“The initial impact of the Covid-19 outbreak and the overnight closure of the hospitality sector had severe consequences for the food supply chain. The resilience of those systems was stretched to the limit as the supply chain frantically sought to redirect produce that would usually be destined for the out-of-home market to the retail sector, where panic-buying had resulted in empty shelves in many stores. I thank all our farmers who have worked throughout the chaos of the Covid-19 fallout to keep the nation fed. I know that for many businesses and sectors this hasn’t always been easy and some experienced significant losses as those supply chains struggled to adapt to new demands. However, the role the entire industry has played during such a fraught period will live long in the memory of many, and indeed recent polls suggests farmers’ favourability with the consumer is higher than it has been in a decade.
“I very much hope that lessons can be learned from this tumultuous year and if the past few months have taught us anything, it’s that the safe, reliable supply of high quality affordable food is now of paramount importance to the public. As farmers we are ready and committed to ensuring that the nation remains fed during this difficult time and through future challenges, too. Our farming systems, underpinned by a fantastic, natural asset base, mean we are well equipped to be the providers of the most climate friendly food in the world. NFU Cymru will continue to lobby Welsh Government to see the importance of food production recognised and protected as a cornerstone of future policy.
“Looking ahead and, with significant changes to how Wales and the UK trades with the EU and the rest of the world, one of the biggest challenges for 2021 is going to be making sure that Welsh farmers have the widest possible range of markets freely open to them, on the best possible terms. We are, of course, relieved that that a deal has finally been agreed between the UK and the European Union, providing some much-needed certainty for the farming sector and allowing Wales’ farmers to continue to send products to the EU27 free of both tariffs and quotas. All efforts must be now be focussed on finding ways of minimising the impact of red tape on the movement of our produce to the EU.
“A heartfelt thanks must go to the one million people from all walks of life who backed our food standards campaign. Their support was instrumental in delivering legislation to ensure that food standards will now have a ‘stronger voice in UK trade policy’.
“Of course, away from the pandemic and agricultural policy, there are still major issues that are affecting the nation’s farmers every day. Bovine TB continues to blight so many businesses across Wales – all too many times this year I have again learned of families’ heartbreak and herds, generations in the making, being decimated due to this horrific disease. Please be assured that NFU Cymru will continue to pressure government to act upon the science and take notice of the proven strategies adopted by so many other countries – an approach that seeks to tackle bovine TB across all its vectors.
“NFU Cymru maintains that a heavy-handed and inflexible approach to water quality through the proposed all Wales Nitrate Vulnerable Zone (NVZ) designation will not deliver the enhancements to water quality that we all want to see. NFU Cymru is committed to helping to deliver these improvements via an effective and proportionate framework that supports farmers to take action to improve water quality where it is needed. I am heartened that our Minister has recognised that these are not regulations to introduce at a time of crisis.
“Climate change remains a major challenge for all of us in society and the farming industry is putting its best foot forward to deliver on its net zero 2040 ambition. With the prestigious COP26 summit rescheduled to be held in Glasgow in 2021, it is clear this topic will, rightly, remain high on the news agenda next year. As a farmer, it’s important to me that farming’s contribution to mitigating the effects of climate change is fairly reflected in this debate. Recent research has pointed to the fact that Welsh livestock production systems are amongst the most sustainable in the world, but we know that there is much more we can and will do.
“With a Senedd election scheduled for May 2021 we will be speaking to candidates from across the political spectrum to push home the importance of Welsh food and farming. We are committed to working with the next government to deliver our ambitions for a productive, profitable and progressive farming sector that delivers for the people and communities of Wales.
“It has been a year like no other. With the vaccine rollout now underway I hope we will soon be able to consign the last pandemic-hit year to the history books and return to some form of normality, where we can soon meet at the agricultural shows and events that we all hold dear to our heart. Let us look ahead to 2021 and what we hope will be a bright, healthy and safe future.
“Blwyddyn Newydd dda.”
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