‘Wales must not lose a penny’: Carwyn Jones

£200M a year: that’s the support given to 16,000 Welsh farms through the Common Agricultural Policy.

In last Thursday’s (Jun 23) momentous vote to exit the EU, Welsh voters decided that Welsh farmers would need to find that level of subsidy from elsewhere. The question remains as to where that money will come from, especially with all those brand new hospitals promised by Leave campaigners waiting to be built.

NO RAPID EXIT

Expressing disappointment with the referendum result, Glyn Roberts from the FUW welcomed the Prime Minister’s decision to delay invoking Article 50 of the Treaty of Lisbon.

Mr Roberts said the timescale of an exit was crucial to such planning, and that exit over too short a period would have dire consequences for both the UK and the EU.

“There is a monumental amount of work to do in terms of changing domestic arrangements  and  legislation,  including in terms of Welsh devolved legislation, not to mention unravelling us from the EU budget to which we were previously committed,  negotiating  trade  deals  and dealing with issues such as border controls. “Such issues will also require a huge amount of work at the EU level, and we do not believe a rapid exit over a couple of years would be in either the UK or the

EU’s interests.

“It is likely to leave everyone with the worst of all worlds,” he added.

The   Union   has   called   for   early

meetings with the Welsh Government and is also engaged with UK Government to ensure that the voice of Welsh farming is heard during these challenging times.

“We have also reached out to other non-member  states  in  order  to  better understand agricultural models in countries such as Norway and Switzerland, and these knowledge exchanges will ensure that the experience of other nations can benefit any plans being developed in Wales,” said Mr Roberts, who concluded: “Our members’ voices must be heard, so we will consult with them as widely as we can to ensure that Wales gets what it needs to ensure a sustainable agricultural future and stronger rural economies.”

IMPLICATIONS UNCLEAR

NFU Cymru   President,   Stephen James, said, “At the forefront of most farmers’ minds will be the twin questions of what level of access we will enjoy to the European markets and what level of support farmers in Wales might receive once the withdrawal process is complete. We must ensure we have the best possible access   to   Europe’s   markets   and   an agricultural policy that guarantees parity of treatment with the rest of Europe. If farm businesses are to plan for the future then they need to know the answers to these questions sooner rather than later.

“Negotiating and concluding trade agreements with the European Union and the rest of the world for our exports now becomes vital. Wales is particularly reliant  on  export  markets  and  we  will be  looking  to  the  UK  Government  to

prioritise the negotiation of favourable trade agreements. Whilst doing so, I would stress that it is essential that decision makers   do   not   undermine   domestic agriculture by opening the UK market to goods which do not meet our own high standards of production.”

Reflecting on the timing of the end of CAP support, Mr James pointed out: “Once official notification is made, the two year window we have for exiting leaves little  time  to  conclude  our  withdrawal from   the   EU,   whilst   simultaneously seeking  to  negotiate  trade  deals  from scratch. We are urgently seeking a meeting with the Cabinet Secretary to discuss the implications for Welsh agriculture.”

MARKETS MUST BE MAINTAINED

Commenting on the result of the referendum to leave the European Union, the Chairman of Hybu Cig Cymru (HCC)

– Meat Promotion Wales – Dai Davies said: “Hybu Cig Cymru’s focus remains on securing the best deal for levy-payers, and a sustainable future for the Welsh red meat industry.

“The result will undoubtedly lead to a period of uncertainty; HCC has an important role to play in mitigating any instability and ensuring the maintenance of current trade.

“Our essential task in the long-term is securing the best trading deals for Wales

– maintaining our existing export markets in Europe, and continuing our work in developing   new   trading   relationships further afield.

“The First Minister has this morning

outlined six priorities for Wales. HCC will play an active role in finding solutions to these key issues which are in the best interests of the red meat industry. These include the terms of access to the European single market, the future of participation in existing CAP and RDP programmes, and the future of PGI certification.”

WALES MUST NOT LOSE A PENNY

Responding   to    the   Referendum, Welsh First Minister, Carwyn Jones, said: “The Welsh Government must play a full part in discussions about the timing and terms of UK withdrawal from the EU. Our participation is essential, not just for directly devolved issues, but for the whole range of issues affecting vital Welsh interests.

“It is vital that the United Kingdom negotiates to retain access to the 500 million customers in the Single Market. We should negotiate continued participation, on current terms, in major EU programmes like CAP and Structural Funds up until the end of 2020. This will facilitate continuity for citizens, communities, businesses and investors while arrangements are made for the longer term.

“Wales is a net beneficiary from the EU to the tune of hundreds of millions of pounds. There is now an overwhelming case for a major and immediate revision of the Barnett Formula taking into account needs arising from EU withdrawal and I call today for the promise made that Wales will not lose a penny to be guaranteed.”

AGRICULTURE VITAL TO WELSH ECONOMY

The concern about   the   financial

Consequences of the Leave vote is borne

Out by the fact that, before EU subsidies, the support offered to farmers by successive UK governments were not enough to compensate for the disadvantage Welsh agriculture experienced from its smaller average farm size.

According to NFU Cymru President

,   Stephen   James:   “Agriculture   is   a significant   contributor   to   the   Welsh economy with 60,000 people employed either full or part-time on holdings in Wales.  Welsh agriculture has a gross output of nearly £1.5bn and underpins a food supply chain worth £6bn annually, employing 230,000 people or 18% of our workforce. It is essential that this is not put at risk.”

Glyn Roberts, FUW President, said: “All the businesses that make the wheel of our rural economy go round have an important role to play in our daily lives and indeed how we all survive and make a living.

“We know that a lot of second and third sector businesses are already struggling as a result of the knock on impact of low agricultural incomes and farm gate prices, and the potential wider impact if there was to be a further downturn in farm incomes could be catastrophic.

“We must remember that agriculture is the powerhouse of the rural economy, and generates billions of pounds which benefit a host of industries including many not directly associated with agriculture.”

LABOUR MARKET CONCERNS

Currently, 65% of agricultural workers are non-UK EU citizens.  In addition, approximately 80% of seasonal workers employed in agriculture are sourced from the EU, due to UK workers being reluctant to take on   such short-term, uncertain

employment. Significant numbers of EU workers are also employed in leisure and tourism. This could result in labour shortages and/or price increases for the sector as it is forced to take on alternative, more expensive, labour.

Free movement of EU nationals across the EU will no longer apply to the UK, unless this arrangement continues as part of a renegotiated trading arrangement between the UK and the EU. A change to these rules would mean that the existing pool of labour for UK rural businesses will be significantly reduced.

Meurig Raymond, the Pembrokeshire farmer who heads the NFU reflected concerns about those issues, remarked following the vote: “During the Referendum we have repeatedly drawn attention to our sector’s need for access to non-UK labour, both seasonal and full-time. Outside the EU we will need a student agricultural workers scheme, which is open to students from around the world.

“We will be looking for guarantees that the support given to our farmers is equal to that given to farmers in the EU, who will still be our principal competitors.”

EARLY GUARANTEE NEEDED

The Tenant Farmers Association has also contacted the UK and Welsh governments in the wake of the referendum results. TFA Chief Executive, George Dunn, said, “Agricultural policy will be the main focus of activity for the TFA, and having already set out a potential draft policy for the situation within which we now find ourselves, we will be using that as a basis for beginning our discussions with the English and Welsh Governments to gain early traction to ensure that the farming community is not forgotten as we build new, domestic policies from the bottom up.”

In a statement on Friday morning (Jun 24) organic farming charity ‘ The Soil Association ‘ said it is ‘very disappointed’ by the vote, saying environmental conservation and protection will likely be much more difficult to achieve outside the EU. The Association statement adds: “UK wildlife, the environment and the organic farming sector have been major beneficiaries of EU membership, where the precautionary principle prevails in policy making. Thanks to EU policy, the UK has cleaned up its act as ‘the dirty man of Europe’ and now has cleaner beaches, rivers and better protection for wildlife, including our vital pollinators as a direct result of EU membership. It is vital that these gains are secured.”

The organisation has pledged to work with the government to develop new policy and solutions, saying: “Those communities who are most vulnerable such as those on low incomes and upland farmers need to be foremost in our minds as we consider what policies should be developed over the next couple of years.”

CLA Chief Executive Ross Murray said: “There are some urgent decisions for Ministers to make. These decisions are necessary to secure the immediate future of the rural economy. We need an early guarantee that, whatever happens with regard to the negotiations on the UK’s exit, the support that is currently provided to UK farmers and the wider economy through the EU Common Agricultural Policy (CAP) will continue unbroken and unchanged until at least the end of December 2020.

“As negotiations begin on trade relationships to succeed our position as a full member of the European Union, Ministers must have the needs of farming and other rural businesses at the front of their minds. The ambition must be a barrier and tariff-free relationship. Whatever happens, the UK Government must not allow a poor trade dynamic that leaves UK agriculture at a disadvantage.

“Discussions must begin as soon as practical on what will replace the support provided through the CAP. A dedicated UK Agriculture and Land Use Policy must be in place ready for the day we exit the European Union. This has to be a widely accepted policy that supports our farmers, helping them to be resilient to unpredictable markets, and providing them with a firm foundation to compete with EU and other farmers from across the world. It must also be a policy that fully supports the vital work of managing our land and wildlife, preserving our landscapes and supporting rural communities.”

FARM INCOMES UNDER THREAT

It is probable that the UK will now have to renegotiate terms of trade agreements previously concluded by the EU. To what extent and on what terms non-EU countries will be willing to establish trade agreements direct with the UK remains to be seen. Existing tariffs imposed on goods and commodities coming into the UK from outside the EU would be significantly reduced if default World Trade Organisation rules were applied without the UK adopting its own tariff regime. This could result in cheaper imports undercutting the UK’s primary producers.

The UK will certainly have to negotiate new trading terms with the European Single Market and the level of tariffs to be levied on goods imported into the EU from the UK could be significant for many in the agricultural sector. The EU currently levies significant tariffs on many food products coming into the single market, so this could have a negative effect on the sector unless the UK is able to negotiate beneficial terms.

On average, 55% of farmers’ incomes are currently received by direct subsidies via the CAP. No guarantees have been given about what, if anything, will replace this post-Brexit – although it is generally accepted that some form of alternative subsidy regime will be introduced. The fear is that the general public will balk at matching the expenditure of £3bn currently received from the EU each year, so farmers may find that their incomes are reduced. This could result in many going out of business. It is also probable that subsidies in the future will be more tied to environmental schemes and credentials.

The current uncertainty around use of glyphosate and neonicotinoids would arguably be removed as UK farmers are given the freedom to use products that membership of the EU might prevent. However, if the UK wishes to continue exporting to the EU single market, it may find itself restricted in its freedom to use these products as part of the terms of any trade agreement entered into.

If the withdrawal of EU funding reduces farm budgets and prices for domestic food products fall to compete with imports, returns for in hand farmers and landlords are likely to be hit.

During the campaign, Andrew RT Davies, the Welsh Conservative leader who backed Brexit, said there was a ‘solid guarantee that Welsh farmers would continue to receive at least as much in terms of support ‘. That cheque is, however, not Mr Davies’ to write; and the thing with ‘guarantees’ is that they often come with the sort of strings attached that render them effectively valueless.

employment. Significant numbers of EU workers are also employed in leisure and tourism. This could result in labour shortages and/or price increases for the sector as it is forced to take on alternative, more expensive, labour.

Free movement of EU nationals across the EU will no longer apply to the UK, unless this arrangement continues as part of a renegotiated trading arrangement between the UK and the EU. A change to these rules would mean that the existing pool of labour for UK rural businesses will be significantly reduced.

Meurig Raymond, the Pembrokeshire farmer who heads the NFU reflected concerns about those issues, remarked following the vote: “During the Referendum we have repeatedly drawn attention to our sector’s need for access to non-UK labour, both seasonal and full-time. Outside the EU we will need a student agricultural workers scheme, which is open to students from around the world.

“We will be looking for guarantees that the support given to our farmers is equal to that given to farmers in the EU, who will still be our principal competitors.”

EARLY GUARANTEE NEEDED

The Tenant Farmers Association has also contacted the UK and Welsh governments in the wake of the referendum results. TFA Chief Executive , George Dunn , said, “Agricultural policy will be the main focus of activity for the TFA , and having already set out a potential draft policy for the situation within which we now find ourselves, we will be using that as a basis for beginning our discussions with the English and Welsh Governments to gain early traction to ensure that the farming community is not forgotten as we build new, domestic policies from the bottom up.”

In a statement on Friday morning (Jun 24) organic farming charity ‘ The Soil Association ‘ said it is ‘very disappointed’ by the vote, saying environmental conservation and protection will likely be much more difficult to achieve outside the EU. The Association statement adds: “UK wildlife, the environment and the organic farming sector have been major beneficiaries of EU membership, where the precautionary principle prevails in policy making. Thanks to EU policy, the UK has cleaned up its act as ‘the dirty man of Europe’ and now has cleaner beaches, rivers and better protection for wildlife, including our vital pollinators as a direct result of EU membership. It is vital that these gains are secured.”

The organisation has pledged to work with the government to develop new policy and solutions, saying: “Those communities who are most vulnerable such as those on low incomes and upland farmers need to be foremost in our minds as we consider what policies should be developed over the next couple of years.”

CLA Chief Executive Ross Murray said: “There are some urgent decisions for Ministers to make. These decisions are necessary to secure the immediate future of the rural economy. We need an early guarantee that, whatever happens with regard to the negotiations on the UK’s exit, the support that is currently provided to UK farmers and the wider economy through the EU Common Agricultural Policy (CAP) will continue unbroken and unchanged until at least the end of December 2020.

“As negotiations begin on trade relationships to succeed our position as a full member of the European Union, Ministers must have the needs of farming and other rural businesses at the front of their minds. The ambition must be a barrier and tariff-free relationship. Whatever happens, the UK Government must not allow a poor trade dynamic that leaves UK agriculture at a disadvantage.

“Discussions must begin as soon as practical on what will replace the support provided through the CAP. A dedicated UK Agriculture and Land Use Policy must be in place ready for the day we exit the European Union. This has to be a widely accepted policy that supports our farmers, helping them to be resilient to unpredictable markets, and providing them with a firm foundation to compete with EU and other farmers from across the world. It must also be a policy that fully supports the vital work of managing our land and wildlife, preserving our landscapes and supporting rural communities.”

FARM INCOMES UNDER THREAT

It is probable that the UK will now have to renegotiate terms of trade agreements previously concluded by the EU. To what extent and on what terms non-EU countries will be willing to establish trade agreements direct with the UK remains to be seen. Existing tariffs imposed on goods and commodities coming into the UK from outside the EU would be significantly reduced if default World Trade Organisation rules were applied without the UK adopting its own tariff regime. This could result in cheaper imports undercutting the UK’s primary producers.

The UK will certainly have to negotiate new trading terms with the European Single Market and the level of tariffs to be levied on goods imported into the EU from the UK could be significant for many in the agricultural sector. The EU currently levies significant tariffs on many food products coming into the single market, so this could have a negative effect on the sector unless the UK is able to negotiate beneficial terms.

On average , 55% of farmers’ incomes are currently received by direct subsidies via the CAP. No guarantees have been given about what, if anything, will replace this post-Brexit – although it is generally accepted that some form of alternative subsidy regime will be introduced. The fear is that the general public will balk at matching the expenditure of £3bn currently received from the EU each year, so farmers may find that their incomes are reduced. This could result in many going out of business. It is also probable that subsidies in the future will be more tied to environmental schemes and credentials.

The current uncertainty around use of glyphosate and neonicotinoids would arguably be removed as UK farmers are given the freedom to use products that membership of the EU might prevent. However, if the UK wishes to continue exporting to the EU single market , it may find itself restricted in its freedom to use these products as part of the terms of any trade agreement entered into.

If the withdrawal of EU funding reduces farm budgets and prices for domestic food products fall to compete with imports, returns for in hand farmers and landlords are likely to be hit.

During the campaign, Andrew RT Davies, the Welsh Conservative leader who backed Brexit, said there was a ‘solid guarantee that Welsh farmers would continue to receive at least as much in terms of support ‘. That cheque is, however, not Mr Davies’ to write; and the thing with ‘guarantees’ is that they often come with the sort of strings attached that render them effectively valueless.