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On farm meeting for politicians

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Discussing family farms' future: Adam Price and Jonathan Edwards

PROTECTING the Welsh family farm was on the agenda in its broadest sense this week as the Farmers Union of Wales hosted a visit for local AM Adam Price, MP Jonathan Edwards and Police Commissioner Dafydd Llywelyn.

The visit to Mr & Mrs Rickman’s Gurnos Farm in Bethlehem took place on Friday​ (Feb 16)​ with representatives of farmers, unions, animal feed suppliers and work-from-home businesses all present to question the elected members.

Topics of discussion included the future of the family farm model were the UK to leave the Single Market and Customs Union, making the industry attractive to young people, connectivity, transport and security matters.

Dyfed Powys Police Commissioner, Dafydd Llywellyn was on hand to discuss rural crime and the considerations which need to be given to the way in which ports and borders operate after Brexit.

In 2016, Wales exported 92.7% of its meat to the EU, excluding the UK, tariff-free. Nearly 70% of all Welsh exports went to the EU. The trade agreement negotiated will, therefore, be of crucial importance to Wales’ farmers. Plaid Cymru politicians have consistently supported membership of Single Market and Customs Union as the best way to protect the interests of local farmers.

Speaking after the farm visit Assembly Member Adam Price said: “Wales’ high-quality food and drink is underpinned by high animal health and welfare and environmental standards. Our farmers can therefore compete with farmers anywhere in the world on the quality of their products, but they are not well-placed to compete on cost.

“The Welsh and UK Governments should therefore ensure a transition period for the future funding arrangements equivalent to the durations of the current and next Common Agricultural Policy funding cycle.

“In order to protect Welsh farmers, we were pleased to give an assurance on our visit that Plaid Cymru will require the UK Government to seek the endorsement of each UK country before any future trade deal can be signed.

“Leaving the EU does provide some opportunities, for example, EU regulation on procurement has been a hindrance to developing procurement policies that could benefit the Welsh food and drink industry. Public sector procurement, including by schools and hospitals, should favour produce from Wales as much as possible.

“The connection between farming and wider rural economies communities needs to be better recognised in future; through improved broadband and transport infrastructure; enabling farmers to develop small community energy schemes; and recognising farmers’ role in improving health, wellbeing, protecting our language, and attracting tourism through maintaining landscapes.”

Member of Parliament Jonathan Edwards said: “Of all Wales’ industries, agriculture faces the most uncertainty following the decision to leave the EU.

“Without the right trade agreement in place, the right regulatory framework and the right support, the consequences for our agricultural industry and wider rural economy will be disastrous.

“According to Hybu Cig Cymru, a scenario where the UK trades with the EU under World Trade Organisation rules could mean tariffs of 84% on cattle carcasses, 46% on lamb carcasses and 61% on cuts of lamb. The Tories promise to ‘grow more, sell more and export more great British food,’ but they do not explain how this will be done.

“The message I gave during my visit is that I and my Plaid Cymru colleagues will resist any attempts by the Tory hard-brexiteers to sell Welsh produce down the river in favour of the financial interests of the City of London.”

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Farming

NFU Cymru President’s New Year message

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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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Farmers face hidden tax hike

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POTENTIAL changes to rules on Capital Gains Tax could lead to a tax hike for those inheriting farmland and assets, financial advisers at NFU Mutual have warned.

Many farmers can potentially pass on farms to their children free from Inheritance Tax due to Agricultural Property Relief and Business Property Relief.

As capital gains are wiped away on death, children inheriting can sell and only face Capital Gains Tax on any rise in value between the date of death and a sale.

However, in a review ordered by Chancellor Rishi Sunak, the Office of Tax Simplification has recommended that gains should no longer be wiped away on death where the estate has claimed Agricultural or Business Property relief to reduce Inheritance tax.

Sean McCann, Chartered Financial Planner at NFU Mutual, said: “Many farmers choose to hold on to their farming assets until death on the basis that not only might they be free of Inheritance tax, but also escape Capital Gains Tax if sold shortly after death.

“The Office of Tax Simplification’s recommendation that gains should no longer be wiped on death where Agricultural or Business Property relief has been claimed to reduce inheritance tax will mean bigger tax bills for some farming families.

“The biggest impact will be on those who sell farming assets they’ve recently inherited. Those that retain the assets and continue to farm won’t face any immediate tax liability under the proposed changes.

“The Office of Tax Simplification also recommended a hike in Capital Gains Tax rates that would align them to Income Tax rates, leading to larger tax bills.

“However, it’s likely that any change would be accompanied by an allowance to take account of the rise in value caused by general inflation, so any tax is only levied on ‘real’ gains.

“It’s important to stress Rishi Sunak has not yet confirmed he will agree to these recommendations, but many farming families will be watching the March Budget with interest.”

EXAMPLE

A farmer owns a farm worth £1m which he bought 25 years ago for £300,000. He dies and leaves it to his children, who sell for £1m shortly after his death. Under current rules, if he met the criteria for 100% Agricultural and Business Property relief, they would pay no inheritance tax on the £1m and no Capital Gains Tax on the sale.

Under the proposal to abolish the tax-free update on death, while there would still be no inheritance tax due – if the farmer’s children sold shortly after his death, they would face a Capital Gains Tax bill on the £700,000 gain. Based on the existing rate (20%) that would trigger a Capital Gains Tax bill of £140,000.

“It’s important to stress Rishi Sunak has not yet confirmed he will agree to these recommendations, but many farming families will be watching the March Budget with interest.”

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Consumers ‘sleepwalking’ away from meat

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A LACK of inspiration, rather than a conscious reaction to trends such as veganism, was at the heart of the pre-Covid-19 reduction in meat, fish and poultry consumption, new AHDB research has suggested.
Before the pandemic struck, some 7.8 million (35%) households in Great Britain had unwittingly purchased less meat, fish and poultry products, according to AHDB analysis of Kantar data [52 w/e 26 January]. This figure accounted for 99% of the 1.3% volume drop in retail sales.

However, the twenty per cent of households which had at least one ‘conscious meat reducer’ accounted for just 1% of the losses, with the majority citing other reasons for reducing consumption.

The unconscious reducers were said by the report to mostly be of retirement age and living with fewer people. They were found to be much less likely to experiment with cooking or refer to themselves as a ‘foodie’, preferring more traditional dishes. They were also found to be unsatisfied with shopping for meat, with just 29% of the unconscious reducer group saying they enjoyed browsing meat aisles and only 31% find them to be inspiring.

The report urged the meat industry to focus its efforts on winning this group back as they offered a better route to boosting meat consumption than conscious reducers.

“How unconscious reducers think and feel about meat isn’t any different to those people who are actually increasing their meat consumption – they’re not turning away on purpose so there is a chance to re-engage them with the category,” explained one of the report’s authors, AHDB senior retail insight manager Kim Malley.

“The biggest opportunity is at the point of purchase. The key thing the report highlights is those people are wanting a better in-store experience. There could be simple messaging in-store to remind people why they enjoy meat, give them a bit of inspiration and remind them it’s versatile and convenient.”

Malley added the meat-free category is “excelling” in innovation and convenience through ready-meal and marinated NPD – products which the report said the meat industry had invested less heavily in.

She also praised the packaging of meat alternatives, which tended to be “very colourful and brought recipes and flavours to life” for shoppers, and urged the meat industry to do its own innovation in these areas in a bid to win back “distracted” consumers.

According to the report, distractions included negative media coverage of the meat industry and the prominence of plant-based ranges in stores.

But in positive news for the sector, it found the coronavirus pandemic had seen sales volumes of meat, fish and poultry rise 8% year-on-year in the 52 weeks to 6 September. Unconscious reducers were discovered to have accounted for 35% of this uplift.

Malley said meat “benefited massively” from the rise in in-home occasions this year and consumers thinking more about their food choices. “It has highlighted that it’s quite easy to re-engage people,” she said.

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