Connect with us
Advertisement
Advertisement

Farming

Hard Brexit threat to west Wales’ farmers

Published

on

John Davies, NFU Cymru: Priority must be tariff-free trade with EU27

BREXIT threatens major upheaval for Welsh agriculture, with small upland farms particularly threatened.

A report from the Public Policy Institute for Wales (PPIW) suggests that there is a massive risk to west and north Wales.

LIVESTOCK FARMING THREATENED

Its analysis suggests that the most likely changes in trading conditions would tend to disadvantage the competitive position of Welsh agriculture in its main current markets and trading competitors (particularly in sheep and beef).

The report also anticipates generally reduced levels and scope of public funding by comparison with those the sector has enjoyed in recent years.

However, within these challenging probable change scenarios, there are opportunities if farm businesses are enabled to respond adaptively.

Some farms and sectors face much greater challenges than others, which implies uneven structural change across significant areas:

  • a decline in the economic viability of sheep production is likely, with these farm businesses especially vulnerable to changes in both market access arrangements and public funding support – this could increase pressure on rural services;
  • accordingly, north and west Wales are likely to face stronger negative impacts than the south and east, where more potentially positive and diverse impacts can be expected among dairy, horticultural, mixed and other farm types.

MARKET RESPONSE UNCERTAIN

How key food and forestry processors and retailers respond to the Brexit process, and their willingness to invest in Wales and Welsh products, will be an important factor. Their patterns of operation may change in response to shifting economic and market conditions.

Managing the challenges faced is key, to prevent undesirable impacts on natural capital, landscape quality and community identity.

Three policy directions are recommended:

  • Fostering resilience in farm and other land management businesses; supporting successful adaptation, enhanced efficiency, diversification, adding value and intergenerational transfer, as well as some moves from farming into other sectors;
  • Investing in longer-term partnerships between government, food retailers, rural service providers, and commercial lenders to promote stronger business networks and SME infrastructure across Wales;
  • Designing a future funding framework to support natural resource management and rural vitality in Wales.

THINK OUTSIDE THE BOX

Report author Prof Janet Dwyer, from the University of Gloucester, argued that while farming only employs a relatively small proportion of people directly, its success has a ripple effect across rural communities.

“People need to be more willing to think outside the box, to think about working together, think about understanding the way in which one person‘s business affects what other people do because farming affects the landscape, which affects tourism, which is an important sector in Wales, so a lot of these things are connected,” she said.

The CCRI Director and Professor of Rural Policy makes a number of recommendations to overcome these potential challenges. These include investing in better business planning and adjustment; careful succession planning for farms and small rural businesses; and policies to strengthen health and social services for those in the most remote areas.

“Conducting the work made me more aware of the importance of thinking ahead and planning for continued uncertainty, whatever the eventual political and economic outcomes of Brexit” said Professor Dwyer.

REPORT WELCOMED

A Welsh Government spokeswoman said it welcomed the report, saying it highlighted the possible impact of Brexit not just on trade and markets but on people‘s lives.

“However, Brexit also presents the opportunity to put in place new Welsh policy frameworks to help them adjust and thrive,” she said.

“We recognise that many of these changes will impact businesses in different ways and agree the best approach will be on an individual business level.”

She said they have already begun work to develop “sector readiness” programmes to support businesses to prepare for the change.

“We continue to press the UK government on the need for a multi-year transition period to enable all businesses to prepare and for clarity on the level of funding that Wales will receive after Brexit.”

Responding to the report’s findings, Paul Davies AM, Welsh Conservative Shadow Secretary for Rural Affairs, said: “We note with interest the recommendations of the report.

“Following our departure from the EU, more powers over agriculture will be transferred to the Assembly. “The Welsh Government now needs to focus on ensuring that they listen to rural communities and that they actually devolve power to people living in the countryside.”

Mr Davies view of ‘more powers’ being transferred to Wales does not appear to reflect the views of many Conservative Brexit enthusiasts within the UK Parliament, including David TC Davies, who chairs the Welsh Affairs Select Committee and David Jones, the former Secretary of State for Wales, whose appearance in Cardiff this week as a member of the Public Administration and Constitutional Affairs Committee was noticeable for his equivocal approach to the transfer of powers in areas of existing competence back to the Assembly after Brexit.

HARD BREXIT’S SEVERE IMPACT

The report’s publication coincided with the release of the Welsh Government’s own Brexit trade paper, supported by an economic impact analysis from Cardiff Business School, argues the Welsh economy is best protected by retaining full access to the European Single Market and membership of a customs union.

The paper sets out the severe impact a hard Brexit would have on Welsh jobs and the economy. If the UK were to move to World Trade Organisation (WTO) rules, the Welsh economy could shrink by 8% – 10%, which would be the equivalent of between £1,500 and £2,000 per person in Wales.

The trade paper calls on the UK government to provide evidence of how new trade deals would replace the benefits of access to the EU. The Welsh Government also wants decisions on new trading relationships with the EU and the wider world to be taken in partnership with devolved administrations to fully reflect the interests of all parts of the UK.

Launching the document, the First Minister said: “Welsh exports are worth £14.6bn each year, with 61% of Welsh exports and just under half of our imports going to and from the EU. Wales is currently attracting record levels of inward investment, which is largely due to our access to the EU’s 500m customers.

“As our trade paper highlights, moving to WTO rules and the imposition of tariffs could have a catastrophic impact on our lamb sector and on the Welsh shellfish industry, which currently exports around 90% of their produce to the EU.

“These hard facts underline what is at stake if the UK government fails to get the right deal for the UK or we crash out of the EU without one. Leaving the Single Market and the Customs Unions would be hugely damaging for Welsh businesses and jobs, with our agricultural, food producers and automotive sectors being particularly hard hit.

“I urge the UK government to give serious consideration to our proposals and work with us to develop a post-Brexit trade policy which protects Welsh jobs and the economy.”

NFU WELCOMES WG PAPER

Commenting on the document, NFU Cymru President Mr John Davies said: “As the paper rightly acknowledges, the decisions that will be taken about the UK’s future trading relationships with the EU27 and the rest of the world will be significant factors shaping our future prosperity. In my view, nowhere is this more true than in relation to agriculture, with around a third of our lamb crop and around three quarters of Welsh food and drink exports destined for the European market.

“Trade has consistently emerged as a top priority for our members during the Brexit negotiations. As far as I am concerned our future trading relationship must be one which gives us the full and unfettered access to the Single Market that we need, and I welcome the fact that the Welsh Government has made this call once again in today’s policy paper.

“The imposition of tariffs, under a no-deal scenario would impact lamb exports in particular, and under WTO rates chilled lamb carcasses would attract effective tariff rates as high as 46%, effectively shutting us out of European markets.

“Whilst there has been much talk of tariff barriers and the detrimental impact that they can have on trade, I was pleased to see the policy document making extensive references to the negative impact that non-tariff barriers can have on trade, particularly in relation to exports of food. When it comes to food and agricultural produce in particular, non-tariff barriers such as inspections at border posts in order to demonstrate compliance with technical regulations and standards, rule of origin, hygiene, veterinary and phytosanitary controls are all factors which increase costs and hinder trade.

“The paper also rightly acknowledges the damaging impact that the lack of clarity on future trade arrangements with the EU is having for business and nowhere is this truer than in agriculture where production cycles can often span a number of years. That is why we cannot wait much longer for an outline of what our future trading relationship with the EU27 is going to look like, if our members are to start planning for the future.”

Mr Davies concluded: “Although Brexit may well eventually give the UK the freedom to strike its own trade agreements with third countries other than the EU27, speaking as a Welsh farmer, the immediate priority for the UK Government has to be on securing a trade agreement with the EU27 that is free from tariff and non-tariff barriers, and encompasses all sectors including agriculture.”

Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published.

Farming

Freeport will not be a silver bullet

Published

on

AT THE beginning of September, before political focus temporarily dimmed, the Welsh and UK Governments invited applications for Wales’s first freeport, which is planned to be up and running next year.
After years of wrangling, Welsh Ministers agreed to support freeport policies in Wales after the UK Government agreed delivering them would meet the Welsh Government’s demands for a “partnership of equals”.
Part of the agreement reached placed Wales on the same footing for starter funding after three years in which the UK Government refused to fund Wales to the same level as Scotland and England.
A Welsh freeport will be a special zone with the benefits of simplified customs procedures, relief on customs duties, tax benefits, and development flexibility.
Milford Haven Port Authority, which has already expressed interest in Freeport-status, to push the Haven’s claims to be the location of a Freeport in Wales.

WHAT IS A FREEPORT?

Freeports are a special area where normal tax and customs rules do not apply. These can be airports as well as maritime ports. At a Freeport, imports can enter with simplified customs documentation without paying tariffs.
Businesses operating inside designated areas in and around the port can manufacture goods using the imports and add value before exporting again without ever facing full tariffs or export procedures.
Suppose the goods move out of the Freeport into another part of the country. In that case, however, they must go through the full import process, including paying any tariffs.
The UK was previously home to several Freeports, including Liverpool, Southampton, and the Port of Tilbury.
The legislation governing them was not renewed in 2012 because – while the UK remained a member of the EU and in the EU customs area – the economic case for keeping them was lost.
The UK could have chosen to retain freeports; nothing in EU law prevented them. Ending them was a political choice made by the then-administration.
Despite the absence of freeports, England remains home to 24 free zones, which operate on the same principle: in the Tees Valley and Manchester.

THE BENEFITS FOR PEMBROKESHIRE

The Milford Haven Waterway, a busy energy industry hub, is also a sensitive marine environment.
Supporting a scheme which could potentially undermine the Haven Waterway’s environmental status while pursuing a green energy future will be a difficult balancing act.
Milford Haven Port Authority argues that locating a Freeport in Milford Haven makes sense due to the Haven Waterway’s status as a nationally strategic energy asset and a key trade hub for the British energy supply.
A Freeport, it claims, will be an essential vehicle to help safeguard the existing professional energy jobs and skillsets to utilise for low-carbon ambition while regenerating the economy.
The Port Authority says the port’s existing energy infrastructure presents the opportunity for large-scale hydrogen production and injection with minimal additional infrastructure requirements. Alongside strong wind, wave and tidal resources, deep water access has already accelerated an emerging renewable sector such as floating wind in the Celtic Sea.
The Authority claims that a Freeport could support supply chains from equipment manufacturing to system integration and power connectivity, helping companies develop bankable projects and lower energy costs for UK consumers.
The proximity to major shipping routes and the existence of LNG terminals mean the Haven Freeport could also support a cleaner global maritime sector.

NOT PLAIN SAILING

Although freeports could, theoretically, redress imbalances in the UK’s economy by encouraging economic activity in areas where the economy is weakest, a careful balance must be kept.
The use of government subsidies for freeports – whether through direct grants or tax breaks – potentially falls foul of the WTO rules upon which Westminster seems determined to trade.
While freeports are successful in stimulating investment and jobs in a range of locations worldwide, they are neither a “silver bullet” for all locations nor the only way of boosting the UK’s main global gateways.
Freeports are notorious globally for being used to evade tax, launder money, and ease the transportation of stolen or illicit goods.
Moreover, as the experience at the Teesside Freeport development shows, they can lack any form of accountability and create fewer and less widespread economic opportunities than hoped.
The financial scrutiny of the Teesside Freeport is not much more than zero, and a box-ticking exercise carried out without any forensic examination of where the money goes and how contracts are awarded.
Milford Haven Port Authority operates a trust port. There are no shareholders or owners, and, importantly, its Board has independence of action without independent oversight.
A freeport’s financial structure is, if anything, even more financially opaque.
As public money is being invested in a freeport, proper public scrutiny – not merely loose “oversight” or lip service -must be the minimum standard.
Moreover, a freeport could be a money pit and public funding magnet. Too big an opportunity and too large a political totem to allow to fail, even when its economics don’t add up, freeports could end up being propped up by public money while delivering less than promised on the tin.

THE COMPETITION

In all the positive publicity about a possible Freeport in Milford Haven, the Haven is not alone in wanting one.
Holyhead is Wales’s largest Irish Sea port. It is also in the key marginal constituency of Anglesey.
The stalled Wylfa development for nuclear power (part of the UK’s Government economic and energy strategy) is also on the island, and an already massive and expanding wind farm lies off its coast.
Holyhead links the North Wales corridor to England’s northwest and the Midlands. Transport infrastructure is already better to and from Anglesey than from Pembrokeshire to those destinations and will need less investment.
Cardiff Airport is another potential rival and one that could be especially attractive to the Welsh Government.
Since it bought a controlling stake in the Airport, the Welsh Government has propped it up with loans and grants.
Without Welsh Government support, the Airport would be insolvent.
The Welsh Government might be persuaded that making Cardiff Airport the first of Wales’s freeports would kill two birds with one stone.
It would attract more air and freight traffic to the site and decrease the Airport’s reliance on financial help from the Welsh Government.
As with Holyhead, the transport and infrastructure links from Cardiff Airport to other parts of the UK – in this case, the Midlands, the M4 corridor, and Bristol – are superior to those connecting Milford Haven with those regions.

MOVING MONEY

A substantial concern expressed in a report on the Freeport scheme presented to the County Council is the undeniable fact they often do not create jobs but move them from one area to another.
The economic displacement of employment and funding opportunities could pull jobs and investments from one community to another.
If a new freeport only moved jobs and capital from (say) Newport to either Milford Haven or Holyhead, the economic case for their creation becomes – at best – shaky.
That raises the question of whether freeports provide value for public money through direct investment or tax relief.
Freeports could also be used to erode the high standards the UK currently places on workers’ rights and the environment.
Granting freeport operators carte-blanche to do what they want within a designated development area: for example, by allowing shortcuts through planning and environmental law or through allowing employment practices prevented elsewhere, involves trade-offs with unions and planning authorities could find problematic.
While jobs are needed, it is reasonable to ask what jobs and at what cost.
The experience of Welsh Enterprise Zones suggests few new jobs at a massive cost per head.
At a time of enormous hardship, it’s easy to be gulled by the prospect of large sums of public money and the prospect of that money pulling in private investment.
Tax and tariffs apart, a cautious individual might wonder why, if freeports are such a sure-fire thing, they need so much public money.

Continue Reading

Farming

Welsh Government must balance farming priorities

Published

on

IN EARLY July, the Welsh Government published its proposals for the Sustainable Farming Scheme.

Robert Dangerfield, Communications Manager for the Country Land Owners and Business Association Cymru, responds.

We are pleased to see the ambition shown within the document to support sustainable and profitable food production alongside addressing the climate and biodiversity emergencies.

The proposals arise after three consultations over five years and reflect the work our members and the CLA team have done with Welsh Government.

We are happy to see considerable detail on what the scheme will pay for, the process for how farmers and landowners can apply, and how the transition from the current landscape of the Basic Payment Scheme and Glastir to the Sustainable Farming Scheme will work.

We do, however, have some specific concerns.

Firstly, the requirements for 10% woodland/forestry cover and a 10% requirement for habitat creation and maintenance may not be suitable for all holdings. The need to balance sustainable food production must be considered further.

Secondly, there are no specific payment rates for the scheme. Welsh Government have explained that this is because the current funding settlement with the UK Government only goes to 2024, so they cannot commit to specific rates. This is disappointing, and we will continue to lobby to ensure future funding matches the commitments within the proposals.

WHAT HAS BEEN PROPOSED?

Despite the concerns highlighted above, there is a fair amount of detail within the document. To summarise, the scheme includes a farm sustainability review that will include farm details (size, sector, livestock), a carbon assessment and a baseline habitat survey.

The review will be digital, where possible, to reduce cost and concentrate resources on scheme delivery.

It will provide entry to the scheme and identify the actions Welsh Government will pay for. These will consist of a mixture of universal activities that all applicants must undertake – for which they will receive a baseline payment via a five-year contract and optional and collaborative actions which will attract additional payments.

The universal actions include:

·        Record of key performance indicators;

·        10% of land for woodland/forestry and 10% for habitat creation/maintenance;

·        Undertake animal health and welfare plan;

·        Undertake a biosecurity plan;

·        Manage areas of cultural/heritage significance;

·        Undertake a five-yearly soil analysis.

The optional and collaborative actions are very wide-ranging and will be able to be tailored for the plethora of different farm types across Wales. One particular area of importance for our membership is access.

The proposal outline that any options relating to access are optional and include:

·        upgrading footpaths to multi-use paths;

·        enhancing existing paths to make them more accessible;

·        establishing joined-up and new access routes and trails;

·        establishing new access;

·        hosting educational and care farm visits.

We will continue to work with the various access fora and the Welsh Government to ensure that any new access is voluntary, incentivised, and permissive.

INITIAL VIEWS

The Royal Welsh Agricultural Show took place a week after the publication of the proposals, providing an ideal opportunity for discussion with lots of different organisations and our members.

Not surprisingly, the “10 and 10 requirements” dominated many meetings and conversations I had.

Some farmers were not concerned as they had already reached these percentages on their holding but were worried about land held under Farm Business Tenancies that often did not include the woodland.

In the short term, there are no quick answers; but the CLA Cymru team will be part of a Welsh Government-organised tenancy working group to discuss the impact of the proposals on landowners and tenants.

Other members outlined their worries that they needed all the productive land they had to go towards feeding their stock or growing their crops. This is a real concern.

For some, the solution will be to sustainably intensify other parts of their farm and become more efficient.

Where this is not possible, the role of exemptions for some farms must be considered by Welsh Government.

AGRICULTURE (WALES) BILL

The Agriculture (Wales) Bill will be published this Autumn.

It will be the legislative mechanism by which Welsh Government can administer the new scheme.

Ministers are confident it will receive Royal Assent by summer 2023, ready to begin testing, trialling, and introducing the new scheme.

We will be working with Members of the Senedd to ensure scrutiny of the Bill and to propose amendments if we see fit.

Continue Reading

Farming

Carmarthen producer wins best sausage in Wales award

Published

on

RED VALLEY FARM in Carmarthen is celebrating coming first in Hybu Cig Cymru – Meat Promotion Wales’s ‘Put Your Best Sausage Forward 2022’ competition, with their wild garlic sausages crowned as the very best bangers in Wales.

Business partners Andy Washbourne and Graeme Carter were delighted with the victory, with the high-flying producers taking the coveted award for the second year running. As winners, they will now automatically qualify for the ‘Champion of Champions’ sausage competition at the UK-wide Butcher Shop of the Year 2023 awards.

Speaking after winning the title during a special event at the Royal Welsh Show, Graeme Carter said: “It really is an incredible honour to have our sausages named as the very best in Wales. Winning an award like this really makes all the hard work worthwhile and shows that our ethos of producing quality, small-scale and locally produced pork pays off in the end.

“We were really proud of our wild garlic sausages, but it’s still a pleasant surprise to win the title. We had a really good time at the final judging event and the fact that the standard was so high amongst all the shortlisted finalists just goes to show what a fantastic pork industry we have in Wales.

“Since taking over the farm from my parents a few years ago, specialising in rearing pigs has really turned into a passion for me and Andy. We were gifted one boar to help clear the ground following some tree planting and everything has literally grown from there. We just plan to go from strength to strength and concentrate on what we do best, which is quality, sustainably produced pork.

“We’re now really looking forward to be representing Wales at the ‘Champion of Champions’ sausage competition and hope to be crowned the best across the whole of the UK.”

Red Valley Farm pipped Haverfordwest’s Prendergast Butchers and Puff Pigs of Ynysybwl to the title, wowing the panel of judges including leading Welsh food personality Chris ‘Flamebaster’ Roberts.

Chris said: “Nobody likes a banger more than me and the quality of those that made the final meant it was certainly a pleasure to be on the judging panel.

“It’s always really tough to choose a winner when the standard is so high, but right from the off we were impressed with the wild garlic sausages. They looked the part, the consistency was spot on and they just tasted amazing. Having now had a sample of them I’m pretty keen to get my hands on the recipe myself to try and work out the secret of making sausages taste so good!”

Speaking about his delight at the standard of entries to this year’s competition, Rhys Llywelyn, Market Development Manager at Hybu Cig Cymru – Meat Promotion Wales, said: “It was fantastic to be back at the Royal Welsh Show to hold the awards and the standard of the three finalists certainly didn’t disappoint. However, in the end Red Valley Farm just about came out on top, so a huge congratulations to them and we wish them the best of luck at the UK ‘Champion of Champions’ finals.

“Our small-scale pork producers in Wales have a fantastic story to tell. They specialise in creating a unique, hand-reared product that is often only available to buy directly from themselves and local independent shops, like butchers. This makes it a more sustainable food product, generating fewer food miles, and I’d urge consumers to seek out their local producer and find out for themselves the fantastic quality that’s on offer.”

For more information on pork produced in Wales, and where you can buy it, please visit porcblasus.cymru.

Continue Reading

Trending

FOLLOW US ON FACEBOOK