FUW president calls for clarity from UK Government on agricultural funding

Emily Price

The president of Wales’ farming union has written to the UK Government following concerns that Welsh agricultural funding could be drastically reduced.

Chancellor Rachel Reeves redefined agricultural funding for the devolved nations in her autumn Budget announcement last month.

This means funding will now be allocated using the Barnett formula rather than maintaining a separate ring-faced allocation as has historically been the case.

Previously, EU funding for UK agriculture was allocated across the UK nations under the Common Agricultural Policy (CAP) formula based on rural and farming criteria such as the size, number and nature of farms.

This resulted in 9.4% of the total UK agriculture budget coming to Wales when the UK was part of the EU.

Block grant

The Farmers Union of Wales (FUW) has warned that the Treasury’s decision to ‘Barnettise’ the block grant for each devolved nation – a calculation based on population rather than farm and rural characteristics – could see Wales’ agricultural funding fall drastically.

FUW President Ian Rickman has written to the Welsh Secretary Jo Stevens calling for clarity on the funding reform.

He has cited a worse case scenario that Wales’ proportion of total UK agricultural funding could reduce from 9.4% to around 5% – equal to a cut of around 40% in funding.

‘Serious implications’

The FUW has argued that despite an additional £1.7 billion being made available to Wales as a result of the Budget, this funding has been linked to investment into schools, housing, health and social care, and transport.

Mr Rickman says that if agricultural funding has been effectively ‘Barnettaised’ there could be “serious implications” for Wales’ agricultural sector.

He said: “While the Welsh Government will ultimately have the final word on the Welsh agriculture budget, Barnettisation, or any reduction in Wales’ agricultural funding by the Treasury will further undermine the industry – and fail to reflect inflation and the plethora of public goods farmers are increasingly expected to deliver.

“We’ve already experienced the anger, frustration and fear within the agricultural sector following the UK Government’s lack of clarity regarding the changes to the Agricultural Property Relief (APR) and Inheritance Tax.

“This continued lack of clarity regarding the funding being made available to Wales and the devolved nations is a further concern for an industry already on its knees, and I do hope the UK Government will be able to provide urgent clarity on these matters.”

Clarity

The FUW’s concerns were raised in the House of Commons by Plaid Cymru MPs Liz Saville Roberts MP and Ben Lake MP during a debate on Rural Affairs on Monday (11 November).

In Scotland, First Minister John Swinney says his Government will struggle to provide multi-annual funding to Scottish farmers due to the lack of clarity over future block grants coming from Westminster.

Farmers across the UK are also under pressure following the announcement of changes to inheritance tax.

Under the plans, the tax will be charged at 20% on agricultural assets above £1 million, although Ms Reeves has said in some cases the threshold could in practice be about £3 million.

Opposition politicians have argued that most farmers are asset rich and cash poor making it unlikely that they would be able to pay such a tax.

The UK Government says the Budget took into account the “difficult decisions” required to fix “crumbing” public services across the UK.