AS THE dust continues to settle following the UK Government’s Budget, the Farmers’ Union of Wales (FUW) has sought clarity from the UK Government following concerns Wales’ agricultural funding could be drastically reduced.`
As part of her Budget, the Chancellor of the Exchequer, Rachel Reeves, redefined agricultural funding for the devolved nations 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. That resulted in 9.4% of the total UK agriculture budget coming to Wales when we were members of the EU.
However, the FUW has warned the UK 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’ proportion of total UK agricultural funding fall drastically.
Writing to the Secretary of State for Wales, Jo Stevens, FUW President Ian Rickman has sought urgent clarity from the UK Government on the funding reform. Citing a worst-case scenario, Mr Rickman told Ms Stevens that the ‘Barnettisation’ of agricultural funding could see Wales’ proportion of total UK agricultural funding fall from 9.4% to around 5% – equal to a cut of around 40% in funding.
The FUW has argued that despite an additional £1.7 billion being made available to Wales as a result of the Budget, this additional funding has been linked to investment into schools, housing, health and social care, and transport. If agricultural funding has been effectively ‘Barnettaised’ (5% of UK allocation rather than 9.4%) as a result of the Budget, there could be serious implications for Wales’ farmers and agricultural sector.
Liz Saville Roberts MP and Ben Lake MP cited the FUW’s concerns in the House of Commons during a debate on Rural Affairs on Monday, November 11.
In that debate, Westminster’s Secretary of State for Rural Affairs refused to respond to Ms Saville Roberts and dismissed Ben Lake’s concerns that funding for Welsh agriculture would be slashed by 40% as a matter for Wales’s devolved government to deal with.
Wales’s Rural Affairs Minister, Huw Irranca-Davies, failed to allay concerns about the future of agriculture funding in the Senedd on Wednesday, November 13.
Local MS Sam Kurtz said: “Unnecessarily and without need, the Chancellor decided to redefine agricultural funding for the devolved nations through the Barnett formula. Previously, I’ve asked you and your predecessor, with regard to the sustainable farming scheme, to write to the Treasury to ask for a quantifiable amount of money that would be needed to deliver the scheme in Wales.
“Using the Bank of England’s interest rate calculator, that would be approximately £500 million. Can you confirm on the floor of this Chamber if you or your predecessor ever did write to the Chancellor or the Treasury on that, and whether you have had correspondence with them asking them not to change, not to redefine agricultural payments through the Barnett formula?”
In a long-winded answer, Huw Irranca-Davies’s answer boiled down to “no”.
He confirmed the Welsh Government welcomed the removal of ring-fenced agricultural funding and less funding for Welsh farming communities. The Minister also sold the pass on the Barnett formula’s use. He looked forward to the distant moment of the sort of fairer funding settlement he and his colleagues abandoned on July 5.
Even under the CAP allocation, the Welsh Government carved out a huge chunk of agricultural support payments to fund a host of projects and groups that delivered little or no discernible benefit to rural Wales’s communities. Now, with no restrictions on how it uses Treasury funding, farmers fear that the reduced consequential will itself be carved up to fund Cardiff Bay’s pet projects.
Llyr Gruffydd, Plaid’s agriculture spokesperson, said: “Freezing the agriculture budget at the same level it has been since 2014 is effectively raising a white flag to the twin challenges of climate change and food security. At the very time farmers are being asked to intensify efforts on these fronts, the UK Government delivers real terms cut to Defra’s Budget.
“Farmers cannot deliver today’s priorities on yesterday’s Budget. If Labour think so, then they’re both naive and mistaken.”
Commenting, Ian Rickman, FUW President 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.”
