Crisis cuts to rural affairs budget risks environmental targets, says FUW

Emily Price

The Farmers’ Union of Wales has expressed major concerns following the announcement of crisis cuts to the Welsh Government’s budget.

Finance Minister Rebecca Evans announced on Tuesday (October 17) that following work by the Cabinet to address financial pressures over the Summer, cuts would be made partway through the financial year in order to make ends meet.

She said a “hugely challenging” funding crisis had been made worse by spiralling inflation.

The package of financial measures will see a total budgetary reduction of around £600 million; with around £220 million coming from cuts to spending including a £37.5m cut to the rural affairs budget.

FUW President Ian Rickman said the cuts represent a “significant blow” to the industry.

He said: “This is extremely concerning given the important work being undertaken by the Welsh Government’s rural affairs department at a time of major transition and pressures for farmers and the rural communities they support.

“No administration is immune from spending cuts and we fully recognise that there are pressures outside of the Welsh Government’s control.

“However, budget cuts of this significant nature call into question the ambitious environmental targets posited by the Welsh Government.

“Without proper and ambitious support for food production and environmentally sustainable farming it will be difficult for the industry to meet the aspirations of the Welsh Government in these areas.”

The announcement follows cuts totalling more than £200 million in funding for Welsh agriculture and rural development since 2019.

The FUW also raised concerns over a “lack of clarity” around the budget available for the new Habitat Wales Scheme intended to bridge the gap between Glastir contracts and the Sustainable Farming Scheme set to be rolled out in 2025.

The new Habitat Wales Scheme could see farmers receive 45% less on average than the previous mainstream land management scheme.

Mr Rickman said: “Ironically, the Climate Change budget, which includes transport, has been boosted by over £80 million worth of funding yet reduced payment rates, along with the loss of whole farm management payments and support for capital works, means that those currently in Glastir contracts, which come to an end on 31 December 2023, will receive significantly smaller payments next year.

“It would be deeply concerning if reductions to this overall rural affairs budget led to a significantly smaller funding pot being made available for the Habitat Wales Scheme budget.

“We have consistently called for this new scheme, which is open to more than 17,000 Welsh farmers, to receive at least as much funding as the schemes it replaces. The FUW remains extremely concerned that, should the new scheme be financially unattractive to farmers, any resultant underspend will represent a further loss of income to the sector.

“The Finance Minister cited protection of jobs as one of the priorities underpinning the changes to spending plans and we would therefore like to remind the Welsh Government that the funds made available to family farms in Wales support a tremendous array of secondary and tertiary businesses.

“Hundreds of businesses are solely reliant upon Welsh agriculture and any reductions in farm incomes will have a direct impact upon these businesses and their employees.”

Pressures

Speaking during her announcement in the Senedd on Tuesday (October 17), the finance minister said: “As a Cabinet, we have been guided by a number of clear principles in coming to the decisions we have, including protecting frontline services as best we can, supporting households who are hardest hit by the cost-of-living crisis, and prioritising jobs.

“In order to meet our overall pressures, we will also need to make changes to capital budgets. The Climate Change capital budget will change by £37.7m. The Education and Welsh Language capital budget will change by £40m. The Economy capital budget will change by £36.5m. The Rural Affairs capital budget will change by £20.2m.

“The Finance and Local Government and Social Justice capital budgets will also change by less than £10m each, with Health and Social Services capital remaining unchanged.

“Taken together, this package should enable us to operate within our overall budget this year, as well as meeting some of the specific pressures faced by our public services as a result of inflation and austerity.”

“Turning to the next financial year, I want to be clear with the Senedd. Our revenue budget is set to increase by just 2 per cent and our capital budget will actually fall by 1 per cent. With inflation still stubbornly high, the pressures we have sought to address this year will be even more difficult next year. We will simply not be able to do all the things we will wish to do.

“We will continue to make financial decisions guided by our principles and values, protecting the people of Wales and Welsh public services as much as possible from the current pressures that we face.”

Plaid Cymru spokesperson for agriculture and rural affairs, Llyr Gruffydd MS said the cuts to the Rural Affairs budget will be a “punch in the stomach” for Wales’ agriculture sector.

He said: “It comes at a time when the sector is most vulnerable and facing unprecedented uncertainty and insecurity as we transition from long-established farm support programmes to a new regime.

“Much of the cut will no doubt be put down to underspends in demand led programmes, but it’s incomprehensible that other uses could not be found for those funds.

“This Government is leaning more heavily than ever on the farming sector to deliver its policies. It has been thrust to the frontline in the fight against climate change and tackling the nature emergency, whilst still being expected to put food on our plates and contribute to our nation’s food security.

“Given its critical importance in delivering government policies it’s difficult to accept such a significant cut in budget.

 “I have urged the Minister to reconsider and I have also asked for assurances that any underspend this year will not be used as a reason to cut budgets in future years.”