The Farmers' Union of Wales has written to deputy minister for agriculture Alun Davies highlighting key areas of concern in draft CAP proposals leaked from the European Commission.
The document, when finalised, will lay down the rules for future direct payments to farmers throughout Europe, and could have far-reaching consequences for Welsh farmers if left unaltered, the union claimed.
Speaking at the Pembrokeshire County show (today, August 16), FUW president Emyr Jones said: "This is a very early and incomplete draft Regulation, and our priority at this stage is to take the opportunity to lobby for changes, and highlight to government and Brussels the impact that the Regulations would have on Welsh farmers if left unchanged."
"The Regulation implies that there is limited scope in terms of varying flat rate payments between areas, depending upon local needs. Yet we know from the modelling carried out by the Union over the past two years that having one payment rate per hectare for the whole of Wales would be disastrous, especially in areas such as Pembrokeshire where farms are, on average, smaller, yet can be just as productive as a large upland farm."
The main focus of the document relates to the abolition of the current single payment entitlement system, where farmers' payments per hectare vary depending upon their historical payments, and its replacement during a 5 year transition period with payments per hectare which are identical throughout a region (such as Wales). The union claims that 5 years is nowhere near long enough to minimise disruption, and that much more flexibility is required in terms of varying payments between geographic regions.
Mr Jones also expressed concern regarding the particular implications for dairy farmers, and the dairy industry as a whole, in the absence of a Regulation which takes account of local needs.
"In areas such as Pembrokeshire, where the dairy industry is so important in terms of rural communities and local employment, any move to an overly simplistic flat rate payment based upon the Welsh average could be devastating.
"The dairy industry is already reeling from the impact of high input costs and low milk prices, and a move to a flat rate payment would make many businesses simply unsustainable", added Mr Jones.
Mr Jones was also severely critical of the suggestion that half of all individual payments made in the first year (2014) be based upon the Welsh average payment per hectare.
"We find it incomprehensible that such a figure is being stipulated, and cannot understand why the flexibility which was afforded to areas such as England under the original Regulations is not being suggested in regions such as Wales which opted to keep the historical payment system."
In its response to the minister, the union suggested that proposals to scrap and replace current single payment entitlements 'overnight' constituted anything but a gradual transition towards flat rate payments.
"The approach would presumably mean a business losing all its historical entitlements overnight, and being awarded a new number of entitlements based upon the land claimed in the first year of the scheme.
"This seems like a very awkward way of administering the transition, and it takes little account of the flexibility businesses need in terms of taking on extra land or letting it go from year to year," said Mr Jones.
The Union has therefore suggested a genuine 'soft-landing' approach over a period far longer than five years, during which farmers should be allowed to continue to use the entitlements they currently hold, while those entitlements would gradually fall in value as the element of direct payments based upon a flat rate increases.
"It is important to highlight concerns such as these at the earliest opportunity, and we have also sent a copy of our initial analysis Welsh MEPs and the English minister for their consideration" added Mr Jones.