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Farming

EU Exit scenario report published

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Report makes stark reading: Lesley Griffiths

HE CABINET Secretary for Energy, Planning and Rural Affairs has welcomed the publication of an EU Exit scenario report for the food, fisheries, farming, forestry and the environment sectors.

The EU Exit scenario report has been published by the Cabinet Secretary’s Brexit Roundtable Stakeholder Group. The group was set up following the referendum result to provide a forum for engagement and collaboration between the Welsh Government and its key stakeholders across the portfolio in planning for Brexit.

Over a number of months, a sub-group examined a number of different Brexit scenarios to identify the possible impacts on the sectors. In its report, five scenarios were developed, including defaulting to WTO terms, an EU-UK Free Trade Agreement (FTA) and complete access to the single market with new FTAs with third countries.

The report summarises the key findings of the work, which was developed with stakeholders across all of the sectors.

Key findings across the scenarios include:

Opportunities arise for some sectors in some scenarios, but not in all.

Food prices increase to some degree across all scenarios, particularly influenced by import tariffs, non-tariff barriers and higher labour costs.

The potential impacts for Welsh fishing vary from collapse under WTO tariffs to no change if the trading arrangements with the EU remain unchanged.

The importance of investing in ‘added value’ is a theme across all scenarios and with all sectors.

The sheep sector faces severe challenges as it relies on export to balance seasonal production and to achieve carcass balance. The pressures from geographical constraints and workforce availability in abattoirs and processing mean lamb markets are likely to struggle in all scenarios.

The dairy and poultry sectors are most robust because of their focus on UK internal markets and lower reliance on export. Beef remains viable with a buoyant dairy industry to supply calves, with a better carcass balance and a lower dependency on export.

The Welsh environment sector remains a potential growth area in term of eco-tourism through landscapes and seascape. It is rich in natural capital but investment is needed to develop new markets and to develop the skills the sector needs.

Government funding significantly impacts the rate of change but not the eventual outcome. For many of the most severely impacted sectors funding is unlikely to be able to prevent the impacts but it could help to facilitate change.

Without Government transitional support, in scenarios of big change, specific sectors may collapse quickly which will have wider consequences on community health and well-being.

Both farming and fishing businesses in Wales need to improve productivity and efficiency, and consider other income streams to stay viable. This will require improved business skills and investment in infrastructure.

The challenges and opportunities of Brexit will be different for each agricultural, fishing, forestry or food business. Mechanisms to support businesses to make the right decisions need to be put in place.

Lesley Griffiths said: “I welcome the publication of this EU Exit scenario report and would like to thank the stakeholders for all their hard work. My Brexit Roundtable Group is a key forum where we engage and work closely with key stakeholders across my portfolio to support a collective approach to Brexit in Wales.

“Leaving the EU brings a high degree of uncertainty, and poses both risks and opportunities across sectors including food, fisheries, farming, forestry and the environment. However, accurately predicting the impacts of Brexit is incredibly difficult.

“The Group has therefore considered a number of scenarios to explore the impact directly on key sectors and between the sectors to enable us to also consider potential wider impacts on our communities and our environment.

“Whilst today’s report makes for stark reading it will be an important resource for us as a government, as well as the sectors themselves, to inform our collective preparations for a successful future outside the EU.”

Farming

Cattle and sheep prices rise

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Prices up: But warnings given

HISTORICALLY high market prices for cattle and sheep are helping to push Wales’ agricultural sector into the black, according to market analysis by Hybu Cig Cymru – Meat Promotion Wales (HCC).

Welsh Government projections, released as part of its ‘Aggregate agricultural output and income’ and ‘Forecast of farm incomes in Wales’ statistical reports, show that agriculture is now worth almost £1.6 billion to the Welsh economy.

Beef and sheep farming – along with the dairy sector – are by far the largest contributors to this value, with the PGI Welsh Lamb and PGI Welsh Beef brands helping to secure millions in sales in the UK and export markets.

According to HCC, strong cattle and sheep prices at market are continuing to help sustain profitability, although the weather has had an impact.

“Market prices for June have continued the trend we’ve seen since the beginning of the year,” said HCC’s Data Analyst Glesni Phillips. “Poor weather in early spring is restricting the number of new season lambs coming on to the market, which has contributed to prices remaining around 10p per kilo higher than last year. Beef cattle prices are also strong, helped by a barbecue boom in the warm month of May.”

However, Glesni noted that average farm incomes were still modest, and that uncertainty over access to vital European markets after Brexit meant that forecasting future price movements was unusually difficult.

“According to Welsh Government figures, average incomes on a beef and sheep enterprise in the Less Favoured Area (LFA – which makes up over 80% of Wales’s agricultural land) are only just over £25,000,” she said. “Given that market prices are unlikely to remain at this level, and that considerable political uncertainty exists over possible levels of exports and imports of red meat, this highlights the need for agricultural businesses to prioritise on-farm efficiency as part of their Brexit preparations.”

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Farming

TFA calls for Inheritance Tax changes

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Radical change: TFA wants major tax reform

THE TENANT F​ARMERS ASSOCIATION (TFA) has called for a radical change in the operation of Agricultural Property Relief (APR) in its response to the call for evidence issued by the Office for Tax Simplification for its Inheritance Tax review.

TFA Chief Executive George Dunn said “For many rural landlords the taxation framework within which they operate has a major influence over the decisions they make about how they manage their land. The TFA believes that the Government should be using this sensitivity as leverage to achieve wider objectives for the resilience and sustainability of the tenanted sector of agriculture”.

The introduction of the Agricultural Tenancies Act 1995 represented a major deregulation of the agricultural let sector. Farm Business Tenancies (FBTs) were ushered in with the intention of improved efficiency of land use, whilst increasing opportunities for both progressing farmers and new entrants within the agricultural sector.

“Over two decades on and the TFA believes that neither of these objectives have been attained. Whilst we saw an increase in the amount of let land through the early years of the new legislation this has, by and large, tailed off. However, the biggest failing has been the perpetuation of short lengths of term leading to inefficiency. Short term tenancies are holding back progression, investment and sustainable land use. FBTs have been too short for too long and now is the time for that to change,” said Mr Dunn.

A big advantage to the taxpaying landlord is the ability to have 100% APR from Inheritance Tax for the agricultural value of their holdings let after the 01 September 1995. However, the TFA questions whether this relief should be so widely available. In circumstances where landlords choose to let for short lengths of term, there is little in the national interest to be gained from providing landlords with such a generous tax advantage.

“There needs to be a radical reform of the Inheritance Tax framework for agricultural land as it applies to landlords. Allowing for exemptions for specialist cropping lets on a rotational basis, APR should be abolished except in relation to land let for 10 years or more without a landlord’s break clause,” said Mr Dunn.

“Using changes in APR to improve the average length of term on FBTs will impact positively on the productivity, resilience and sustainability of the tenanted sector of agriculture, which is now responsible for farming around a third of the agricultural area of the country,” said Mr Dunn

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Farming

Royal Welsh to be blooming great

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The Great Royal Welsh Bloom Off: New at this year's Show

THE ROYAL W​ELSH AGRICULTURAL SOCIETY has announced it will be holding ‘The Great Royal Welsh Bloom Off’ competition during the main show on July 23-26.

Have you got a wedding coming up? This would be the perfect opportunity to learn how to arrange wedding flowers and win a wedding bouquet designed and arranged by renowned, award winning florist, Jonathan Lloyd-Davies.

Designed and sponsored by Johnathan of Johnathan’s Flowers, the competition, taking place in the Horticulture Marquee on the Tuesday (Jul 24) of the show, is open to anyone who has not previously competed in the floral art section of the Royal Welsh Show or Winter Fair, and who is interested in learning how to arrange flowers for an upcoming wedding.

Competitors do not need any previous experience (No NAFAS members), there will be no entry fee and all materials will be provided. But hurry, entries must be made in advance as spaces are limited.

The competition will follow the lines of the popular ‘Great British Bake Off’ programme, with contestants, in this instance, first taught to delicately arrange wedding style button holes, with the successful competitors proceeding to the next round to create a beautiful bridal bouquet under Johnathan’s watchful eye.

Jonathan established his business, Jonathan’s Flowers (www.jonathansflowers.co.uk), back in 1993 and has since gone on to provide an inspirational and personal florist service to South Wales and beyond. Specialising in floral designs to weddings and corporate clients, Johnathan has an impressive list of happy clients, including Catherine Zeta Jones, Bonnie Tyler, leading hotels in both Cardiff and Swansea, Glorious Goodwood, Royal Ascot and Wentworth Golf Club, to name just a few.

This exciting competition is just one of the many floral extravaganzas you will find in the Horticulture Marquee at the Royal Welsh Show. Packed full of fruits, vegetables, floral art displays, cut flowers, pot plants, window boxes and planters, a children’s decorated wheelbarrow competition, demonstrations, gardening question time, and the Welsh National Honey Show, amongst other delights… it really is worth a visit!

For more details and entry forms for ‘The Great Royal Welsh Bloom Off’, please contact: 01982 554409 / amanda@rwas.co.uk

The pinnacle event in the British agricultural calendar, the Royal Welsh Show, will be held on ​July ​23 – 26​ ​at the showground in Llanelwedd, Builth Wells.

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