Figures released today by the Welsh Government predicting dramatic falls in farm incomes this financial year highlight the need for a greater emphasis on improving farm incomes under the 2014-2020 Rural Development Plan.
“Forecasts of Farm Incomes in Wales 2014-15” published today (February 26) by the Welsh Government’s statistics and research division predicts a 24% drop in farm business income for all Welsh farms, down from £29,300 in 2013-14 to £22,200 in 2014-15. Average farm business income on hill livestock farms is forecast to decrease by 22 per cent from £19,200 in 2013-14 to £15,000 in 2014-15, while the equivalent figures for lowland livestock and dairy farms is expected to be -19% and -23% respectively.
The report attributes the falls in incomes to reductions in what farmers receive for their produce and reductions in the value of the Single Farm Payment.
FUW President Emyr Jones said: “The combined impact of reduced farmgate prices, the Welsh Government’s 15% Pillar Transfer, a reduced CAP budget and a Single Payment exchange rate of £0.7773/€1 has had a catastrophic impact on farm incomes.
“The fact that sterling is continuing to strengthen against the Euro means there is ongoing pressure on prices, with the situation in relation to Greece not helping.”
Mr Jones said that the Union’s vociferous objection to the reduction of direct farm payments by 15% (the ‘15% pillar transfer’) was well publicised, but the decision could not now be overturned.
“We cannot control the exchange rate, and despite our fierce lobbying against it, the decision to transfer 15% has been made. The only area where there is flexibility to act is in terms of ensuring Rural Development funds are directed at bringing farm incomes back up, and not squandered.”
Mr Jones said that further changes to direct payment rates which would be decided upon over the coming months would also add to uncertainty and disruption for the industry, and would inevitably put further downwards pressure on many farm incomes.
“The figures announced today should come as a wake-up call to all those within Welsh Government who have not yet recognised the need for an RDP which is totally focussed on boosting the efficiency and profitability of farms.”