The Farmers’ Union of Wales’ Presidential Policy team welcomed a real terms increase of around 14% to Wales’ rural affairs budget when they recently met to discuss the most critical farming matters facing the sector.

The Union previously voiced its concern that the Welsh Government draft budget for the 2023-24 financial year suggested that the budget for rural affairs would decrease by £9 million compared with the indicative budget published in March 2022, which in real terms represented a much greater fall.

However, in the final Welsh Government budget for the 2023-24 period published in February this year, the rural affairs budget sits at £482 million.

That’s 23% more than the allocation for rural affairs for 2022-23 (£393 million), £26 million more than the indicative budget from March 2022 and £35 million more than stated in the draft budget.

With UK Consumer Price Inflation sitting at around 9% for the 12 months to January 2023, this represents a real terms increase in the budget for rural affairs in Wales of around 14% and was much welcomed by the Union.

FUW President Glyn Roberts said: “Financial stability and clarity is essential when it comes to running a business, especially for the farming sector that continues to face staggeringly high inflation rates for agricultural inputs. We therefore publicly raised concerns last year regarding potential cuts to the Welsh Government’s Rural Affairs budget and we welcome the fact that these concerns have been addressed.

“However, it is essential that the Welsh Government spends this budget responsibly. Welsh agriculture is facing huge challenges in terms of an acute rise in input costs as well as the costs of new regulations introduced by the Welsh Government.

“We have also lost around £250 million from the CAP replacement due to the UK Government’s decision to cut what we would normally have received from the EU, so it is essential that this extra allocation to the rural affairs budget is used to fund actions and interventions which make up for these significant losses.”

The Farmers’ Union of Wales (FUW) has expressed concern over proposals by the Welsh Government to introduce a statutory licensing scheme for accommodation providers in Wales. In its response to the consultation, the Union stressed that a free statutory registration scheme should be introduced instead.

“There is a strong feeling amongst the community of farmers who have diversified into self-catering accommodation that many Welsh Government policies designed with good intention to tackle the impacts of second homes and short-term holiday lets will have a detrimental impact on genuine providers.

“The Welsh Government must ensure that such policies do not result in an irreversible impact for the Welsh tourism industry, which in turn leads to a sharp increase in the number of accommodation providers operating under the radar. Consequently this could also lead to empty properties which cannot be used for residential purposes due to planning conditions.”

In its response, the FUW also highlighted that there is great concern that the proposed scheme will be considered as an enforcement tool by creating more barriers and bureaucratic requirements for genuine accommodation providers, and used to collect a tourism levy, to which the FUW has previously opposed.

The consultation further highlighted the Welsh Government’s intentions to introduce a licensing scheme based on a similar model to Rent Smart Wales.

“We are opposed to the proposals to use a similar model to Rent Smart Wales which has clearly created additional barriers for landlords attempting to provide for the rented sector, resulting in many properties being left unoccupied or sold as second homes which in turn has exacerbated the second home crisis,” added Mr Owen.

FUW Senior Policy and Communication Officer Gareth Parry added:

“In all our responses and communication to the Welsh Government we have emphasised the need to differentiate between genuine accommodation providers and those who both inhabit and let second homes at different times of the year.

“Whilst robust monitoring and policing of such properties would significantly close this loophole, it has previously been proposed by the FUW that a statutory registration scheme is introduced in order to closely monitor the number of AirBnB and holiday home type properties in Wales alongside identifying the bureaucratic barriers landlords are facing when attempting to provide for the rented sector.”

The FUW is encouraging members to raise any concerns they may have regarding the incoming changes for holiday lets on 1 April with their county office.

Money, money, money - some of us were able to breathe a deep sigh of relief when the Chancellor announced the Spring Budget last week. Some might argue the budget is boring and fairly banal, however, extra spending in England on childcare means that the Welsh Government will receive £180 million more through Barnett Formula consequentials, which is welcome news on the surface of things.

The Welsh Government will now carefully consider its options no doubt and decide how to best allocate that money, though there are unlikely to be any changes for agriculture funding as a result of this. In fact, there was no mention of agriculture support or measures to deal with food security in the budget, which was disappointing.

Of course there were some overall positives in there, for example fuel duty, reduced last year by 5p a litre has remained frozen at that lower level which is no bad thing in view of what are still very high fuel prices.  Yes, those of us living in rural areas where a vehicle is almost essential would have welcomed even more action on this but we should be grateful that the cut has been maintained.

Also worth mentioning with our agriculture sector in mind is that thanks to higher tax revenues and lower energy prices, the Energy Price Guarantee (EPG) of £2,500 will be extended to July which has ensured that we avoided another increase in energy costs which would have occurred had the EPG not been extended.  This measure will help families across the UK and will have the added benefit, we hope, of ensuring that income allocated for energy costs can be targeted at Welsh and UK produce in our weekly shopping. 

The Corporation Tax change is at first glance bad for farming businesses that have incorporated as Limited Companies with the rate increasing significantly from 19% to 25%.  That’s a 32% increase in the tax rate!  However, changes to the way in which HMRC will deal with capital spending moving forward might result in those very same farming businesses being able to significantly reduce their tax liabilities as a result of capital spending decisions. The overall impact of the changes to Corporation Tax can thus be described as something of a double edged measure.

The acknowledgement of labour shortages in the Budget appeared to be a recognition at long last of the arguments that have been made by the agricultural and food supply sector. There are staff shortages and the Government can make a difference. The changes to child care announced for England were one step in trying to deal with this issue (and we hope that Wales will follow suit) but this measure will only have a minor impact at the margins.  However, the Government also announced changes to pension allowances which will cost  £875m in order to try and persuade the very highest paid to stay within the  workforce.  

The Office of Budget Responsibility anticipates that 15,000 workers at these high wage levels will stay in the workplace as a result which averages out at £58,000 per worker! That appears to be an odd priority in a budget where nothing was announced to help the farming and the food supply chain deal with the staff shortages that we face.  

We would further argue that the freezing of Personal Allowances is a creeping tax hit on those farming businesses which trade as sole traders and partnerships and is disappointing in view of the current rate of inflation.  

So, a few days after the Budget it is very welcome that the announcements have not unravelled as with previous budgets and there is a lot to be said for stability.  However, in our view there were no game changing announcements from a farming perspective despite the need for some real support from Government to the sector in a time of change. 

When it comes to direct funding for agriculture and measures to deal with food security, our teams are working hard to ensure that our farmers don’t get short changed through the Agriculture (Wales) Bill and our lobbying for fair farm funding continues.

Young beef and sheep farmer Gemma Haines from South Wales has been elected as the Farmers’ Union of Wales Younger Voice for Farming committee chair at a recent virtual meeting of the committee.

Gemma farms with her husband Rob and 3 children, Gwen, Bryn and Hedd-wyn on the edge of Cefn Hirgoed common near Coity, Bridgend. Here the family keep 20 Highlanders and have around 90 head of Welsh mountain sheep. They lease 37 acres locally and have just purchased 20 acres adjoining the common where they have grazing rights. 

Whilst studying environmental conservation management with Glamorgan University Gemma became increasingly interested in Sustainable Agriculture and its role in landscape management. She has always had a keen interest in farming despite not being from a farming background. 

“I believe that because I enjoyed seeing the lambs and calves being born on the common whilst growing up, a seed was sown in my mind. I realised early on in my studies that livestock grazing, when done sympathetically, played a huge part in not only protecting, but also allowing biodiversity to thrive in these unique landscapes. Later I came to realise I could play a part in that,” she said. 

In 2011 after completing her studies Gemma became more involved with local farms, assisting with lambing and shearing, which further nurtured her interest in farming. She was then gifted some lambs and they became a small hobby flock. 

“My husband Rob also became increasingly interested in farming and fully supported me when I suggested in 2017, we should purchase some Highland Cattle for conservation grazing on Cefn Hirgoed common,” said Gemma. 

Finding land to lease off the common for the cattle was difficult but fortunately the couple were offered a few acres and given permission to build a handling facility for TB testing. 

“We scrimped and saved to purchase our first cattle in autumn 2017. The first few months were a learning curve however we were very fortunate to be supported by friends in the local farming community,“ she added. 

Being home with the children during Covid in 2021 made Gemma realise she wished to pursue farming for herself instead of working for others. She set up her farm business at the end of that year and has been steadily growing it since. 

Speaking about her appointment, she said:

“Having a platform for young farmers and new entrants to discuss their hopes, fears, concerns and ambitions for the future is vitally important. I am grateful for the opportunity to chair the Younger Voice for Farming committee and hope we can generate discussion and action that strengthens support for youngsters and new entrants in Wales going forwards. 

“I would like to take this opportunity to thank Anwen Hughes, the previous chair of this committee for her hard work and wish her well in her new role as FUW South Wales Vice President.”