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Background

Single Farm Payments – ‘The Welsh Way’

The last few weeks have provided the people of Wales with much to think about in respect of decisions made by the Welsh Government. The scrapping of the M4 relief road around Newport was regarded as a major decision for the Welsh Government and its approach to life in Wales post-Brexit.

On the same day as the M4 relief road announcement, buried amongst the ‘other news’ was the announcement Single Farm Payments for farmers in Wales will cease from 2021, to be replaced by a new payment scheme, subject to consultation, based on how the agricultural sector could improve the environment.

The days of the single farm payment will therefore be numbered with the previously proposed schemes of awarding business grants, along with another scheme to ‘reward’ farmers for delivering and protecting environmental habitats and addressing climate change. The Schemes which amalgamated into one, according to Rural Affairs Secretary, Leslie Griffiths, will:

“[allow] us to explore economic, environmental and social opportunities at the same time.”

The Government’s intention Post-Brexit is to secure a “prosperous, resilient agricultural sector in Wales”. Even more worrying now is the admission made by the Minister that she does not know how such payments can be funded as Central Government have failed to provide any assurances on any future payments to Welsh farmers.

A further consultation on the details associated with the new payments proposal will be launched ahead of the Royal Welsh Agricultural Show in July 2019.

With current farm payments and average income from the current scheme being £16,651 for dairy farmers, £14,229 for cattle and sheep farms in lowland areas and £22,705 for cattle and sheep farms in “lesser favoured areas” namely upland farms, the likely impact of scrapping such payments will have a significant impact of farms and rural businesses across Wales.

Our Views

With the ongoing uncertainty on Brexit and the unknown future relationship the UK and Wales will have with the EU post Brexit, be it on World Trade Organisation Terms, a deal or some other form of arrangement, scrapping such payments without any coherent scheme being in place could be perceived as foolish at this stage.

Whilst there is no doubt a comprehensive consultation is likely to take place; this will only give rise to further uncertainty for rural communities and businesses at a time when significant uncertainty is being experienced. The Welsh Government’s previous consultations on alternative schemes resulted in both proposed schemes being adopted for this new payment, but with little detail being provided.

Whilst there is a need to safeguard the environment and the countryside, livelihoods and the wider rural economy are likely to suffer if no firm commitment can be made to match the current payment scheme as part of the new proposed payment scheme, at a time when the amount of funding available from Central Government for such a scheme is unknown.

If the Welsh Government are serious about setting an example and being seen to support the rural economy, any new payment scheme proposed should offer similar, if not enhanced benefits for farmers to the scheme being scrapped. Wales has the opportunity to lead the way on supporting agriculture post-Brexit and the consultation proposed should inevitably be focussed on supporting agricultural entrepreneurship and encouraging farmers to diversify and to become guardians of rural life at such a key time.

Whilst a ‘Welsh Way’ on such payments may be a good opportunity to forge a new farm payment system, if the funding for such a scheme e is not in place, Welsh farmers will no doubt be worse off than their counterparts in other parts of the UK, let alone the continent post-Brexit.

There may have been an over-reliance on payments to farmers in the past, but any payment scheme proposed should set out clear objectives, with increased funding and support provided and a visionary approach taken by the Welsh Government to protect one of Wales’ key economic contributors. No doubt, the ‘devil will be in the detail’ for such a scheme and farmers and their representatives should be prepared to voice their views and concerns to the Minister as part of the proposed consultation in the next few weeks.

To speak to one of our agriculture experts, call 01633 413500 or email sioned.thomas@rdplaw.co.uk

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