|(Pic : Wales Online)|
Last week, the Senedd's Environment Committee published its report on the future of Welsh agriculture and land management (pdf).
Today the UK Government informed the EU Commission of the UK's intention to leave the EU (aka. "triggering Article 50") and, as agriculture and land management are devolved, this is the first detailed report on direct policy implications for Wales.
The Committee made 26 recommendations, summarised as:
- The UK Government should seek tariff-free access to the EU single market for Welsh agricultural produce, and the Welsh Government should have an equal voice at the negotiating table during talks on single market access (I should remind everyone the Committee is chaired, without irony, by a UKIP AM – Mark Reckless).
- Hybu Cig Cymru (red meat promotion agency) should strengthen marketing of Welsh lamb across domestic and international markets, with a refreshed strategy published within 12 months. A similar strategy should be prepared for the dairy sector.
- The UK Government should ensure that post-Brexit regulatory frameworks for agriculture and rural development be developed in partnership with the devolved administrations.
- The UK Government should commit to maintaining current Common Agricultural Policy (CAP) payments at current levels until 2020-21; any subsequent new arrangement shouldn't be subject to the Barnett formula. The Welsh Government should clarify the funding position after 2021 "as soon as possible".
- Both Welsh & UK governments should work immediately on addressing skills shortages that could result from falls in migrant labour, including the development of a skills strategy within 12 months.
- The Welsh Government should ensure future land management and farming subsidies are based on outcomes, quality and mitigating against climate change.
Challenges arising from Brexit
|Although Wales is less reliant on EU migrants for agricultural workers,|
farming bodies were keen to stress the importance of the EU single market.
(Pic: Farmers Weekly)
1. Single market access
93% of Welsh meat, particularly red meat (beef, lamb, pork), is exported to the EU single market. The agricultural sector is also proportionally more important to the Welsh economy, with 4% of jobs being in agriculture compared to 1.42% for the UK.
All major farming bodies and farming unions stressed the importance of maintaining full access to the EU single market – a position backed by the Welsh Government, though the UK Government were more vague. If no free trade deal is agreed, farmers could expect tariffs of between 43%-87% to be applied to their goods, which will hit beef exporters hardest as the higher tariffs are applied to cattle.
There were particular concerns that free trade agreements with Australia and New Zealand could result in more lamb being imported to the UK; but if imports from Australasia were blocked then that could actually boost UK consumption of Welsh lamb, making up for any loss of exports to the EU.
2. Devolved powers & EU transition
Agriculture is devolved in all matters except those currently decided at EU level. Those EU powers (i.e. regulation of animal welfare standards) will be repatriated to the UK, but the UK Government haven't decided whether they should go to the devolved administrations or be retained in London. The Welsh Government have the impression these EU powers will definitely come to Wales post-Brexit.
Interested parties support a pan-UK regulatory framework to replicate the EU (i.e to ensure food producers across the UK apply the same animal welfare standards) - but there should also be scope for Wales to develop its own specific policies. The Welsh Government believe any new pan-UK arrangements require the consent of the devolved administrations.
There's support for a "transitional period" beginning at the point the UK leaves the EU, which will give farmers and other land managers time to adjust to any changes. FUW believe this should last 10 years.
Wales will receive a combined €2.61billion (£2.3billion) in EU agricultural payments between 2014-2020. There were no concerns from Leave campaigners during the referendum that this funding couldn't be found, but farming bodies expect funding to remain at similar levels (I'll call back to the First Minister's comments yesterday). If the Barnett formula were applied to post-Brexit payments – meaning Wales receiving a population based share – then Welsh farming subsidies could be cut by 40% (-£952million over 6 years).
The UK Government said funding will continue at current levels until 2020 with no indication of what happens beyond then. The Welsh Government expect the block grant to be changed to take into account any loss of EU funding, with the First Minister admitting they can't "find £260million a year out of our own budget to compensate farmers".
4. Free movement of labour
Just under 20% of the agricultural workforce are EU migrants, rising to 38% for food processing and 80% of the veterinary workforce. Some of the work is seasonal, but NFU believe there'll be labour shortages from 2018 if there's a reduction in immigration. However, Wales is less reliant on EU migrant labour as the structure of our farming industry is based around animals with less seasonal work on crops and flowers.
There's a commitment from the food and drink industry to increase apprenticeships by 2020 to fill skills gaps (and become less reliant on migrant workers). Also, the Welsh Government's white paper outlines their belief that free movement should be linked to having a job, while the UK Government have been a bit more ambiguous.
The future of land management
|Any replacement funding scheme should incentivise good environmental management of the land.|
(Pic: North Wales Wildlife Trust)
1. Future payment & support mechanisms
Despite the large amounts of money involved, there were criticisms that the current CAP payment system is too bureaucratic. There were, however, splits in opinion on their importance; farmers believe they're vital, environmental groups didn't think they offered value for money.
There were calls for any future system to create a single payment (as opposed to the split between Pillar 1 [farming] and Pillar 2 [rural development] that currently exists), and should link land management to environmental outcomes. However, if the UK reverts to WTO rules post-Brexit there are limits on financial support for agri-environmental schemes.
The Welsh Government agree that a single payment scheme would be "better", and the complexity of the CAP payments system was cited by farmers as one of the reasons a large proportion of them supported the Leave campaign.
2. Land management & rural development
- Climate Change – Under the Environment Act 2016, the Welsh Government are committed to reducing greenhouse gas emissions by 80% by 2050. Land managers should be compensated for undertaking difficult work relating to the mitigation of climate change, in particular management of peat and organic farming.
- Food production – The Welsh food industry should aim to "go upmarket" by focusing on higher standards of quality, environmental standards, animal welfare and labour standards; to continue trading with the EU, Welsh food exports would still need to meet EU food standards anyway. There were also calls for Wales to expand its horticultural offer instead of focusing on meat for environmental reasons, but there are challenges in the form of poor crop-growing soil.
- Forestry and woodlands – The Committee are undertaking a separate inquiry into forestry services, but for the time being there were calls to increase the amount of forestry in Wales as it could deliver better land management outcomes and is more profitable than agriculture – requiring less public subsidy. The FUW urged caution due to the potential huge impact such moves could have on the agricultural sector.
- Biodiversity – There were calls for biodiversity funding to be protected, with the Burren Programme in Ireland raised as a template for paying farmers to protect the environment. There were also those calling for "re-wilding" of farmland to restore natural habitats – which had some support from the NFU who believed it had to be balanced with food production.
- Access to the landscape – Future support should incentivise access to the countryside, which is considered an important tourist asset. English farmers currently need to ensure access is maintained to receive direct payments, but that's not the case in Wales (it's instead part of the voluntary Glastir scheme; The Green Green Glas of Home).
- Rural life – A third of the Welsh population live in rural areas, with farming playing a hugely important role in the local economy. Any new rural development programme has to support not only the economic development of rural Wales but cultural development – including the Welsh language. Welsh is predominantly spoken in rural areas of the west and north, with 30% of all agricultural workers being Welsh-speakers. Direct payments should also support farmers on less favourable land – particularly upland grassland used for sheep rearing; about 75% of land use in Wales is grassland pasture.