Welsh Government urged to safeguard farm funding ahead of draft budget

The Farmers’ Union of Wales (FUW) has reiterated its calls for the Welsh Government to safeguard farm funding ahead of its draft budget announcement for 2025-2026 next Tuesday (10th December 2024).

FUW President Ian Rickman is urging the government to reinstate the full Welsh Rural Affairs Budget to its initial 2023 levels, at £482.5 million, as well as maintaining the existing Basic Payment Scheme (BPS) rates available for Welsh farmers.

The union’s intervention follows a series of cuts over recent years to the Welsh Rural Affairs budget, with the 2023-2024 financial year seeing a reduction of £37.5 million, followed by further year-on-year cut of £62 million for 2024-2025. This was the largest relative reduction of any of the Welsh Government departmental budgets at around 13%.

Mounting pressure

FUW President, Ian Rickman said: “This draft budget coincides with a period of mounting pressure for Welsh farmers, and provides an opportunity for the Welsh Government to reinstill its support for the sector.

“Over recent years, we’ve seen the Rural Affairs budget disproportionately cut – despite a growing expectation for the sector to deliver an ever increasing range of sustainability and environmental objectives, while continuing to produce food.

“At around 2%, Rural Affairs funding constitutes a very small proportion of the Welsh Government’s total budget – but the multiplier effects from the funding – be it economic, environmental, and societal – is significant.

“Considering the increased allocation of total funding for Wales from the UK Treasury, it’s vital for the Welsh Government to reinstate the budget to its previous 2023 levels.”

Basic Payment Scheme

Mr Rickman also highlighted the urgent need for the Welsh Government to maintain the current rate of payment through the BPS for the upcoming year.

On average 80% of farm business income comes through direct (BPS) payments, providing a significant safety net for many Welsh farms, with funding heavily reinvested locally providing employment and economic growth.

The shrinking Welsh Rural Affairs budget has coincided with a significant reduction in the replacement agriculture and rural development funding made available for Welsh farming through the UK Treasury following the departure from the European Union.

This has resulted in Wales receiving around a quarter of a billion pounds less in funding for agriculture and rural development than could have been expected had the UK remained in the EU. This equates to a loss of around £15,000 per BPS claimant in Wales since 2019.

‘Imperative’

Mr Rickman added: “We know that for many family farms, BPS is the difference between a viable and an unviable business. As we have already made clear to the Welsh Government on several occasions, maintaining these rates is imperative in order to deliver much needed stability and confidence within the sector.

With 50,000 people working in agriculture in Wales, and being part of a wider food and farming sector worth over £9 billion to Wales annually, the economic, employment and social implications of any cut in BPS could be drastic for food production, the industry and rural Wales as a whole.”

The FUW has also urged the Welsh Government to ensure the £340 million received from the UK Government, as replacement agricultural funding, continues to be invested in the sector, following changes to the UK Government’s Budget announcement in October.

Historically, devolved governments have received funding for agriculture and fisheries as a ringfenced addition, however, from 2025-2026 the UK Government confirmed the Barnett Formula will apply, with current funds being ‘baselined’ within Wales’ block grant for 2025-2026.

The FUW has previously warned the “Barnetisation” of agricultural funding could significantly disadvantage Wales’ rural budget and agricultural needs – representing a departure from what was previously support based on rural needs – rather than a population-based allocation as it is with the Barnett Formula.