Farming
Farmers and SMEs concerned by supermarket merger

THE TENANT FARMERS ASSOCIATION (TFA) is calling for the Government to rethink its refusal to extend the remit of the Groceries Code Adjudicator (GCA) in light of the proposed merger between Asda and Sainsbury’s.
The planned merger, which will probably be referred to the Competition and Mergers Authority, would create the UK’s largest supermarket chain. However, a merged company would still not be as big as Tesco was only a couple of years ago, when that company had over 30% of the UK’s supermarket retail share.
The combined strength of the merged business poses a threat to suppliers, who could find their margins squeezed as the company would be able to depress prices paid to primary producers by manufacturers. That prospect was well flagged up during a BBC News interview with Sainsbury’s CEO Mike Coupe.
Mr Coupe told the BBC that there will be no store closures and no in-store staff redundancies, the inference that can be drawn is that jobs will go both in administration and back office operations, as well as logistics. The most likely way to deliver savings would be to increase the company’s margin or arrangements with producers and suppliers. Mr Coupe told the BBC that the merged company would have the potential to reduce prices through supply chain efficiencies.
Unfair practices within the retail supply chain led the Government to establish the GCA in 2013 to oversee direct supply contracts between retailers and suppliers. However it recently refused to extend the remit to include oversight of relationships further upstream between farmers and processors which could be impacted by the dominance of retailers.
TFA Chief Executive, George Dunn said “The merger between Asda and Sainsbury’s announced this week should cause the Government to rethink its strategy here. When Sainsbury’s boss Mike Coupe pledged to cut prices on everyday products by 10%, alarm bells rang out across the industry. It is suppliers who will be expected to shoulder the cost of these savings.
“There is a growing recognition that the food supply chain in the UK is dysfunctional and all too often it is the farming community which bears the brunt of the problems that this produces. Poor returns, last-minute changes in orders and specifications, unfair competition from abroad and poor labelling are all contributing to the pressures at farm level,” said Mr Dunn.
“Given that the vast majority of farm produce passes through at least one processor, if not more, before it hits supermarket shelves, the Adjudicator is therefore unable to consider the impact of retailer activity on many farmers,” said Mr Dunn.
Speaking in the House of Commons on Monday (Apr 30), Business Minister, Andrew Griffiths MP, referred to the work of the Groceries Code Adjudicator, but failed to address why the Government had decided to do nothing to protect primary suppliers. This was despite being challenged by Labour’s Shadow Agriculture Minister, David Drew MP on how the Government planned to tackle further potential supply chain abuse between farmers, processors and retailers.
“The TFA agrees that the GCA has had a positive impact on the groceries market by ensuring that there is a greater focus on the principles of fair trading. Retailers are now more aware of the need to ensure that they are not using their dominant position within the supply chain to engage in inappropriate practices. However the extent of the influence of the GCA is limited by its current legislative powers both in terms of the scope of its remit and its ways of working. The Government needs to act now to ensure that appropriate mechanisms are in place to guard against future abuse in the light of further concentration in the retail sector,” said Mr Dunn.
“Well-meaning initiatives aimed at improving supply chain relationships on a voluntary basis have failed to have the necessary traction across the board. We must deepen and broaden the GCA’s powers to allow it to look at the whole of the supply chain and not just direct supply contracts to ensure fairness in supply chains.”
Federation of Small Businesses (FSB) National Chairman Mike Cherry, said: “A merger of this size will concentrate a lot of power in the hands of one giant company, and it’s important that power isn’t misused to coerce small suppliers into accepting unfair contracts and poor payment terms.
“Those at the top of Sainsbury’s and Asda should explain how they plan to merge these two supply chains fairly, and give reassurance that cost savings won’t be achieved simply by milking their small suppliers for all they’re worth.
“When investigating this proposed merger, the Competition and Markets Authority should be looking for cast-iron commitments that a positive standard will be set for working with smaller suppliers.”
FUW President Glyn Roberts said: “The proposed merger will raise many concerns for farmers given the huge power a new mega company could exert over the supply chain.
“If the government were to allow such a merger, we would need to see a step change in regulation of the supply chain and the powers of the Groceries Code Adjudicator, otherwise there is a risk of severe abuses taking place which further undermine farmers and suppliers.”
NFU Cymru President John Davies said: “NFU Cymru and the NFU will be examining the details of this proposed merger between Sainsbury’s and Asda carefully and the further concentration of retail power it creates within the food supply chain. We will also seek clarity on what the structure of any merger will be.
“We will be requesting a meeting with Sainsbury’s and Asda to ensure that the commitment of the new business to British sourcing will not be affected. First and foremost the NFU Cymru and the NFU will be seeking to understand what potential impact a merger would have on our members – both those farmers who are directly part of these supply chains and those who could be affected by wider connotations.
“With just over 31% of the market potentially being held by one company the Competition and Markets Authority (CMA) is likely to consider the impact on shoppers – but that must also take account of changes to supply arrangements that could give rise to a reduction in choice and availability over the long term. The impact of the whole supply chain, all the way down to farm level, needs to be carefully assessed.
“NFU Cymru and NFU support any investigation by the CMA and we would aim to feed into this if approached.”
Welsh Liberal Democrat Spokesperson for Agriculture Cllr William Powell said: “Welsh farmers will be justifiably concerned this merger will produce a supermarket that is simply too powerful, leaving suppliers at its mercy.
“Farmers already work with tight profit margins and face the multiple challenges of Brexit, including diminishing farm support and obstacles to accessing the vital EU Single Market. This merger must not be allowed to threaten them further.”
Farming
Farming future at a crossroads as final Welsh support scheme unveiled

Unions, politicians and sector leaders respond to ‘once-in-a-generation’ changes in land policy
THE FINAL version of the Welsh Government’s Sustainable Farming Scheme (SFS) has been published—sparking a fierce national debate over the future of food production, land management and the economic survival of rural communities across Wales.
Due to come into force on 1 January 2026, the scheme will replace the European Union’s Basic Payment Scheme (BPS), marking the end of a decade-long post-Brexit transition. It introduces a new three-tier model of support—Universal, Optional and Collaborative—with all participating farmers required to undertake twelve baseline actions such as maintaining hedgerows, improving soil health, and managing wildlife habitats.
The Welsh Government has framed the move as a bold shift towards sustainable land stewardship. But farming unions, opposition parties and rural campaigners have expressed serious concerns about the timing, funding, and long-term consequences of the proposals.

FUW: ‘A generational milestone—but not perfect’
The Farmers’ Union of Wales (FUW) described the publication of the final scheme as a “generational milestone,” representing the culmination of years of intense discussions between the sector and Welsh Government.
FUW President IAN RICKMAN said: “We have left no stone unturned in our ambition to secure a viable post-Brexit farm support framework. This is a watershed moment for Welsh agriculture.”
The FUW welcomed several major concessions, including:
- A combined £238 million budget for Universal payments and BPS tapering;
- A reduction in Universal Actions from 17 to 12;
- Exemptions for tenant farmers;
- Removal of the controversial 10% tree cover requirement.
However, the union remains deeply concerned about the scheme’s remaining obligations, particularly the 10% habitat requirement, which many believe will reduce the amount of productive farmland available. Mr Rickman also criticised the “disappointing” tapering schedule for existing BPS payments—set to fall to 60% in 2026 and drop by 20% each subsequent year.
“We urged a gentler five-step reduction starting at 80%. Despite this milestone, we will continue to push for practical improvements as implementation begins.”
NSA: ‘Stark choice for farmers’

The National Sheep Association (NSA) acknowledged progress but warned that many producers now face a stark decision.
NSA Chief Executive PHIL STOCKER said: “Farmers must now ask themselves—do they work with government and adopt environmental delivery, or do they walk away and farm independently without public support?”
NSA Cymru’s HELEN ROBERTS noted the omission of sheep from the Welsh Government’s press release as troubling: “There will be winners and losers. Some of the actions reflect existing good practice, but we’re worried about increased red tape and a lack of clarity on long-term outcomes. The steep cut to 60% BPS is harsher than expected and creates uncertainty.”
Paul Davies MS: ‘Another blow to farmers’
Preseli Pembrokeshire MS PAUL DAVIES described the final SFS as yet another blow to farmers already struggling under government pressure.
“This is dressed up as a new approach, but it’s another blow to Welsh farmers already reeling from devastating government policies. The cut to 60% is cruel and unjustified.”
Mr Davies criticised the absence of a published economic impact assessment, accusing both the Welsh and UK governments of abandoning the rural economy.
“From inheritance tax changes to bovine TB inaction and new hoops for farmers to jump through, it’s clear that governments on both ends of the M4 have failed to support our producers.”
Samuel Kurtz MS: ‘Still no answers on funding or impact’

Welsh Conservative Shadow Rural Affairs Secretary SAMUEL KURTZ accused the Welsh Government of publishing the final SFS without full transparency or accountability.
“After seven long years, farmers still don’t know what this scheme will really cost their businesses. Labour’s relationship with rural Wales is broken,” he said.
Mr Kurtz also criticised the Cabinet Secretary for failing to release the impact assessment, which, he claims, ministers have already seen.
“I stood shoulder to shoulder with farmers on the Senedd steps last year—and I continue to stand with them against any policy that threatens food security and rural livelihoods.”
Plaid Cymru: ‘A step forward—but not far enough’
Plaid Cymru’s Agriculture and Rural Affairs spokesperson, LLYR GRUFFYDD MS, acknowledged that the final scheme had improved following sector engagement—but said serious funding questions remained unanswered.
“It’s clear that this scheme has evolved from its initial form. As the farming unions and others have rightly pointed out, the scheme is an improvement on the one originally proposed,” he said.
“While we welcome the £238 million funding for the year ahead, a one-year pledge is simply not enough. A Plaid Cymru government would guarantee that level of support in real terms as a minimum and introduce a multi-year funding cycle.”
Mr Gruffydd also raised concerns about balance across the scheme’s tiers, the structure of the transition period, and the still-undefined “social value” payment.
“We trust these issues will be addressed swiftly, because, as ever, the devil will be in the detail.”
Labour blocks call for Senedd vote
Amid mounting pressure, Welsh Labour MSs voted down a motion in the Senedd this week which would have required a binding vote on the scheme’s implementation before it came into effect.
“By voting against this, Labour has dismissed farmers’ concerns once again,” said Mr Kurtz. “Trust is at an all-time low.”
Looking ahead
The Welsh Government has pledged to publish a “ready reckoner” tool in the coming weeks to help farmers estimate the financial value of their participation in the new scheme.
The BPS tapering will begin in 2026, with recipients receiving 60% of their previous payments, and reductions of 20% annually thereafter.
An economic impact assessment—originally expected to be published alongside the final scheme—is now due in September 2025, just months before the scheme is set to begin.
Farming unions have said they will continue to work constructively with ministers, but warned that ongoing engagement will be crucial as technical guidance and implementation plans are finalised.
Farming
Soil Association responds to Welsh Sustainable Farming Scheme announcement

THE WELSH GOVERNMENT is set to unveil key details of its long-awaited Sustainable Farming Scheme, due to launch in 2026 with a transition period leading up to the withdrawal of the Basic Payment Scheme (BPS) by 2030. Following a period of extensive co-design through Ministerial Roundtables and Cabinet discussions, the Deputy First Minister will formally announce the scheme on Tuesday.
Responding to the development, Soil Association Head of Policy (Wales), Andrew Tuddenham, said: “After years of debate and design, the time for delay has passed. The environmental challenges and threats to food resilience we face are more urgent than ever, and pressures on public finances are intensifying.
“The Universal layer of the Sustainable Farming Scheme, based on a ‘whole farm’ approach to sustainable food production, is both ambitious and pioneering—not just for Wales, but for the UK as a whole. It is a promising foundation.
“To succeed, the scheme must sustain and strengthen nature-friendly farming in Wales. That means the Welsh Government must now commit to robust funding for the Optional and Collaborative layers and support farmers in accessing these opportunities.
“We welcome the inclusion of requirements to help farmers assess their carbon balance and protect soils from damage due to high-risk cropping and management. We’re also pleased that support for organic farmers will continue in 2026 through the Optional layer, alongside funding for organic conversion.
“However, there remains uncertainty. We await further details from the Welsh Government later this year on the budget and payment structure for Optional and Collaborative actions—an area of real concern for those who are ready to go further now.”
Farming
‘Alarm bells’ over revamped farming scheme

SENEDD Members criticised the lack of an economic impact assessment and long-term certainty after the Welsh Government unveiled revised financial support for farmers.
Samuel Kurtz, the Conservative shadow rural affairs secretary, warned of broken trust over the heavily criticised and protest-plagued sustainable farming scheme (SFS).
Ponting to a poll showing only 3% of farmers trust Labour Welsh ministers, he said the industry waited more than seven years for clarity on replacements for EU subsidies.
Mr Kurtz, who is from a farming family, criticised plans to cut the basic payment scheme (BPS) by 40% for those who choose not to sign up to the SFS.
He said: “This reflects what would have happened had the SFS launched in 2025 but it didn’t launch… so, now farmers are being punished for that failure.”
Warning of a cliff-edge overshadowing the scheme, Mr Kurtz expressed concerns about the total £340m budget which would be worth closer to £500m if it had increased with inflation.
He suggested the revised SFS prioritises tree planting over food security.
The Tory concluded: “You could promise the finest scheme in the world but if the economic impact assessment shows it leads to job losses, livestock cuts and falling incomes then farmers will rightly reject it as they did before.
“What’s deeply troubling is that no economic assessment has been published alongside this announcement today… without it, you’re asking farmers to take a blind leap of faith.”
Huw Irranca-Davies, Wales’ Deputy First Minister, replied: “We’ve analysed the potential impacts of the scheme and that has helped us make the decisions that we’ve come to.

“But just to be crystal clear: these are scenarios – not forecasts, not predictions – so we will keep the scheme under review as we gather further evidence.” He told the Senedd an impact assessment will be published in September.
Llŷr Gruffydd, Plaid Cymru’s shadow rural affairs secretary, described the revamped scheme as an improvement but cautioned that fundamental questions remain unanswered.
He raised farmers’ calls for clarity to provide long-term certainty: “I haven’t seen that in sufficient measure… it’s disappointing we’ve only had a one-year funding commitment.”

Mr Gruffydd added: “You also say that shifting the balance of budgets from the universal action to optional and collaborative actions will happen. You don’t tell us when, you don’t tell us how much – and, again, that will ring alarm bells.”
The politician described condensing the transition from the BPS to SFS as the wrong approach, with a 40% drop in the first year “too significant”.
He warned of “big gaps” in the details. “It is an improvement but a lot of questions need answering,” he told the Senedd, with Mr Irranca-Davies replying: “I acknowledge that.”
Mr Irranca-Davies said the “landmark” revised scheme, which starts in January, represented a new agreement between farmers and the people of Wales.
In a statement on July 15, he told the Senedd the Welsh Government has changed its approach to tree planting, moving away from the proposed 10% tree cover on every farm.
Mr Irranca-Davies, who is responsible for rural affairs, explained farmers will be asked to plant 0.1 hectare by the end of 2028 or have plans in place by the end of March 2029.
He said: “We’re proposing enhanced payments for those planting in the first three years,” stressing farmers will not be expected to plant on their most productive land.
Mr Irranca-Davies told Senedd Members the aim is to plant at least 17,000 hectares by 2030, with an aspiration of 21,500 hectares, pledging to review progress.
“Change isn’t easy,” said the Labour MP-turned-Senedd Member. “This scheme is a big change but it’s a change we believe is good for farming, production and the environment.
“I believe and hope the majority of farmers join the scheme. The BPS is available for those outside the SFS, although reduced by 40% next year.”
Labour’s Lee Waters, a former minister, suggested the Welsh Government has lowered its immediate ambitions by abandoning a target of 43,000 hectares by 2030.
Mr Irranca-Davies said the 22,000 target was based on “practical and pragmatic” advice from the UK climate change committee rather than a “shoot-for-the-stars straight line”.

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