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Clear vision for the future of farming

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rebcca“NFU CYMRU has a vision for a productive, profitable and progressive agricultural industry in Wales. We have a favourable climate and a nation bursting at the seams with passionate, dedicated and skilled farmers,” Stephen James, NFU Cymru President, told the Wales Farming Conference.
Mr James said: “As farmers we are proud of our role, first and foremost as food producers, being the cornerstone of the £6 billion Welsh food and drink industry and custodians of a countryside that we have created, cared for and continue to manage which not only supports a diverse range of species, habitats and ecosystems but also underpins a tourism industry that is worth nearly £2 billion to the economy of Wales.”
At the Wales Farming Conference, held on the Royal Welsh Showground, the Deputy Minister, Rebecca Evans, launched the Strategic Framework for Welsh Agriculture consultation document. The framework proposals have been developed jointly between Welsh Government and the farming industry.
NFU responds to future of farming proposals
Mr James said: “NFU Cymru along with other key industry stakeholders has a clear vision as to how the newly approved Wales Rural Development Programme (RDP) can be used to enhance the viability and competitiveness of our industry. Our proposals are innovative and focussed on integrating expert advice with on-farm investment to bring about widespread uptake, giving farmers the tools to drive their business forward. Crucial to the success of this framework will be Government and industry bringing these core projects to reality.”
Mr James will tell the Deputy Minister and the audience present, during his speech: “This is a difficult period for all sectors: exchange rates, retailer behaviour and commodity markets all seem to be against us at present which is why as part of this framework specific action plans must focus on how we can get the best possible returns from the market place, and this framework must interlink with the Welsh Food and Drink Strategy. Challenging targets must be set that industry and government must put all their combined resources into achieving. We must do everything possible to add value to primary produce here in Wales ensuring that all parts of the supply chain benefit.”
Mr James concluded: “Profitability is the key to delivering a prosperous, resilient industry and to achieve this we need to ensure maximum returns from the market place at the same time as making sure that what we produce is produced as efficiently as possible.”
FUW: PARTNERSHIP WORKING ESSENTIAL
FUW president Emyr Jones told delegates that Welsh farmers are facing the most challenging and difficult period for a decade, as a severely depleted CAP budget, coupled with ongoing uncertainty over what form the Basic Payment Scheme will take, added to extreme pressures caused by a crash in farm gate returns and farm incomes.
“Put simply, farming once again finds itself in depression, and the anger out there amongst the industry is evident,” said Mr Jones.
Describing the Strategic Framework for Welsh Agriculture consultation document launched by the Deputy Minister at the conference, Mr Jones said it contained aspirations for agriculture which few could disagree with, especially given the difficulties currently facing the industry, with agricultural prosperity and profitability being at the core of the framework.
Comparing the document with previous strategies, Mr Jones told delegates that “I’m glad to say that the strategy framework proposals being launched today differ significantly, even radically, in that, if adopted, this is not some 200 page strategy document which will join the others on the shelf.”
“Thanks to the joint work of government and industry bodies, it proposes the formation of an umbrella partnership group to oversee a short and to the point list of key objectives, most notably achieving and sustaining profitability.”
However, Mr Jones warned that the ability to influence many key factors which would help achieve these objectives were limited.
“We cannot control oil prices or exchange rates, and only God can change the weather which can make or break a profitable year. But the Rural Development Programme is one key toolbox we do have at our disposal. For our industry, and in particular our most important food producers who, whatever the final decision on the Basic Payment model is will lose the most significant amounts of money, the RDP is a lifeline.”
Mr Jones reminded those present of former minister Alun Davies’ commitment to using RDP funds to invest in the future of agriculture and equip it to cope with reductions in financial support and market failure, and welcomed the Deputy Minister’s commitments to strategic initiatives aimed at the red meat and dairy industries in particular.
“I welcome the Deputy Minister’s commitments to strategic initiatives aimed at the red meat and dairy industries in particular, and would urge Welsh Government to ensure that the partnership approach which it has signed up to is adopted when it comes to putting more flesh on the bones of the RDP so we can achieve the key objectives identified in this document, most importantly the profitability and prosperity of agriculture, without which all other objectives for our rural communities and landscapes become unattainable and irrelevant.”
MINISTER LAUNCHES MAJOR CONSULTATION
Delivering a keynote speech, Deputy Minister for Farming and Food, Rebecca Evans presented proposals for a new strategic framework for Welsh Agriculture.
These proposals have been developed jointly between the Welsh Government, FUW, NFU Cymru, CLA Wales and other key stakeholders.
The strategic framework sets out the challenges and threats facing the agriculture sector in Wales, but also highlights the opportunities, and importantly, the need for industry and Government to work together to secure a more prosperous and resilient future for the industry.
Taking the stage with Emyr Jones, President of the FUW, and Stephen James, President of the NFU-Cymru the Deputy Minister officially launched a 12-week consultation on the ‘Strategic Framework for Welsh Agriculture’.
She said: “Our vision is of a prosperous, sustainable industry. Successful, profitable farm businesses which have long-term futures are fundamental to success. We want an industry that is forward looking; uses best practice and works to safeguard and enhance soil, water and the natural environment – the bedrock of farm production.”
The Deputy Minister added that the Rural Development Programme, which was approved by the European Commission at the end of May, will provide financial support for many of the changes needed to farming and associated rural businesses, to help realise that vision.
She said: “With a value of over £900 million to rural Wales, much of which will be funded directly by the Welsh Government, this is the largest and most ambitious RDP we have ever proposed. The emphasis will be on ‘green growth’, supporting only those actions that are good for our rural economy, good for communities, good for the environment. For agriculture in particular, the new RDP will make significant, integrated investments in skills and knowledge, business development, fostering collaboration and improved land management. Our guiding principles are that we will achieve much more by working together and that farming must be a sustainable industry in the widest sense. The Welsh Government and its partners look forward to your response about how you want to take our industry forward.”
The deadline for responses is August 27 and the consultation is available on gov.wales

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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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