THE MINISTER for Environment, Energy and Rural Affairs, Lesley Griffiths, last week confirmed what the Welsh Government calls ‘Sustainable Farming’ will remain at the heart of future Welsh agriculture support.
The Welsh Government published its response to last year’s Sustainable Farming and our Land consultation on Wednesday, July 8.
The consultation proposed future funding should support and reward farmers who operate sustainable farming systems and protect and enhance the environment.
Responses to the consultation broadly backed the Welsh Government’s aims but with important caveats to the support expressed.
A significant proportion of the responses came from outside Wales. Those responses came particularly from individuals pursuing an anti-farming agenda, or as part of coordinated campaigns from groups lobbying the Welsh Government.
Over half the respondents (1,900 out of 3,300) came from members of the RSPB.
PLANS LACK SUBSTANCE
Responses from individual farmers cited within the Consultation Report reflect widely-held concerns that the Welsh Government’s plans are thin on detail. Those responses also highlight worries that Welsh farmers will be driven into an uncompetitive position due to new and burdensome regulation.
Despite those concerns, Lesley Griffiths confirmed a future agricultural support scheme will continue to be developed around the Sustainable Land Management framework.
During an update to the Senedd, the Minister also set out the next stages in the development of future support, including:
• Undertaking a range of economic analysis to understand the impact of moving from an entitlement based income support scheme to a voluntary scheme which rewards the production of outcomes. This will be published next summer and no decision on a future scheme will be made without consideration of this analysis;
• A transition period to enable farmers to adjust their existing business model to accommodate any changes required by the proposed scheme; and
• Publishing a White Paper before the end of this Senedd term, which will pave the way for the introduction of an Agriculture (Wales) Bill during the sixth Senedd term.
The Minister said: “Our proposals in Sustainable Farming and our Land provide an important income stream for farmers, recognising the important work they do in delivering environmental outcomes and rewarding them for it.
“We are also looking to reinforce the long term competitiveness of the sector through enhanced business advice and support, helping support farmers in the new economic realities following the UK’s departure from the EU.”
WG PRESSES AHEAD REGARDLESS
Lesley Griffiths continued: “Following consideration of the responses to the consultation, we will continue to develop a future system of agricultural support around the Sustainable Land Management approach.
“This approach will allow us to respond to the climate emergency, will help to reverse biodiversity decline, will ensure high standards of animal health and welfare, and protect our natural resources. Food produced using this approach will be sustainable, ensuring a food supply for future generations.
“Over the coming months, we will continue to engage with the sector and industry representatives on the ongoing development of these proposals for the White Paper, paving the way for an Agriculture Bill. This Bill will set out a support framework which can accommodate the development of agriculture and forestry within Wales for the next fifteen to twenty years. The Bill will enable farmers to be financially supported and ensure a coherent and fair system of regulation can be applied to the agricultural sector.”
A FURTHER CONSULTATION
To ensure farmers are supported following the UK exit from the EU, the Minister also confirmed plans to launch a FURTHER consultation this summer seeking views on the retention and simplification of rules around agricultural support for farmers and the rural economy. This support would bridge the gap between the current EU funding and any new scheme based on sustainable land management.
The Minister added: “It has been a difficult few months globally and Welsh farmers have not been exempt from recent circumstances. I am proud of the resilience they have shown in responding to those difficulties.
“Farmers, foresters and other land managers play a vital part in the economic, environmental, and social well-being of Wales. We will continue to support them to adapt to economic changes as well as the impact of climate change.”
GOVERNMENT FAILING RURAL COMMUNITIES
The Welsh Conservatives’ Shadow Minister for Rural Affairs, Andrew RT Davies responded: “It’s all very well for Lesley Griffiths to stand up and make promises of support to our vitally important farming sector. However, those promises will only materialise if they are driven by a minister who has a finger on the pulse during this COVID-19 pandemic. That has not been the case.
“Time and time again, the Welsh Government has failed our rural communities. Just last week, the Wales Audit Office published a damning report into this government’s handling of the Rural Development Grants Scheme.
“What rural communities desperately need the Welsh Government to do is set out clearly what any support it offers aims to achieve. That should include incentives for food security and for unleashing Wales’ environmental and food-producing revolution.”
CUT BUREAUCRACY SAYS FUW
FUW President Glyn Roberts said: “The proposal to adopt the United Nations’ Sustainable Land Management (SLM) principle as the objective and framework for a future policy fails to encompass wider Welsh goals and objectives, including those defined in the Wellbeing of Future Generations Act 2015, and therefore falls short of being a holistic policy.
“While we welcome some of the conclusions reached in the Welsh Government’s response to the consultation, we remain convinced that families, jobs and communities should be at the heart of planning a new policy – alongside sustainable food production and the SLM principles.”
Mr Roberts said that a scheme which focuses only on the provision of Public Goods and environmental outcomes would fail to take proper account of prosperity, jobs, culture and other issues inherent to the Wellbeing Goals and other Welsh objectives, risking severe adverse impacts.
“We, therefore, welcome the Welsh Government’s commitment to undertake a range of economic analyses to understand the impact of moving from an entitlement based income support scheme to a voluntary scheme which rewards the production of outcomes.
“This work needs to be thorough and look at impacts for individual businesses, sectors and regions of Wales as well as the implications for the tens of thousands of businesses which rely on agriculture and the scheme delivery costs.
“Above all else, it is concerning that the recent food shortages, delays and difficulties in administering our current environmental scheme – Glastir – and hundreds of consultation responses highlighting concerns about the overall direction of travel has not given the Welsh Government more pause for thought.”
TFA Cymru said: “Any new regulatory framework must take into consideration standards which are being used in other parts of the UK and internationally; particularly where goods produced under those differing standards find their way in front of Welsh consumers. That not only undermines domestic production, but it also allows poorer standards to continue in other jurisdictions.
“If it is felt important to introduce a new level of regulation in respect of agricultural production which is not applied elsewhere, the Welsh farming community would legitimately expect protection against products imported to Wales produced to standards which would be illegal at home.”
WG SHOULD ‘PAUSE & REFLECT’
NFU Cymru President John Davies said: “This announcement provides us with some additional clarity on the direction of travel as regards future support. In light of the continuing Coronavirus disruption, as well as ongoing Brexit uncertainty, I would really have liked to have seen Welsh Government taking the opportunity to pause and reflect on this process rather than pressing ahead with new policy development.
“Despite the representations made by NFU Cymru, today’s statement from Welsh Government makes no provision for some sort of stability payment, and that is very disappointing, especially in light of the recent market volatility.
“I was pleased to see the Minister acknowledge the role of agriculture and the food supply chain in keeping the country fed during the Coronavirus outbreak. I am, however, keen to ensure we do not forget the lessons of the pandemic: in particular, how it underscored the value of having a secure domestic primary production base – something which we very much consider ‘a public good’. I also welcome what the Minister said about the simplification of some of the rules around CAP legacy schemes. While that is positive news, it must deliver genuine simplification of complex rules if it is to benefit the 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.”
Farmers face hidden tax hike
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.”
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.”
Consumers ‘sleepwalking’ away from meat
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.