Dairy farming in Wales faces financial collapse if proposed changes to the direct payment system are adopted, the Farmers Union of Wales has warned.
Chairman of the FUW’s milk and dairy produce committee Dei Davies said the Welsh Government must fully understand the impact that a move to a flat-rate payment system would have on the Welsh dairy industry.
Mr Davies said he wanted the Welsh Government to undertake a full impact assessment, exploring a variety of flat-rate single payment models.
“The draft CAP proposals published on 12 October would have a severe impact on dairy farms if implemented in their current form, and it is essential that Welsh Government establishes an evidence base which can be used to show Europe why the draft regulations need to be changed,’’ said Mr Davies.
“There is also a desperate need to look at the impact of different flat-rate models on entire constituencies within Wales where dairy farming is prevalent and makes a key contribution to local employment.”
Under current CAP proposals, every farm would receive the same payment for each hectare of land farmed but it looks likely that in Wales there could be different payment rates for different regions.
“Work done by the FUW has shown that average total payments to upland and lowland farm businesses are currently very similar but lowland farms are, on average, almost half the size of upland farms,’’ said Mr Davies.
“This means that failure by the Welsh Government to investigate and implement an appropriate definition of ‘region’ would result in entire constituencies in Wales losing tens of millions, with catastrophic consequences to communities in terms of food production and local employment.”
The Welsh Government has 21 months before it must notify Europe of its intentions.
“The Welsh Government must ensure that it has left no stone unturned in the search for a model which is appropriate for Welsh agriculture as a whole, otherwise we will be backed into a corner and forced to make catastrophic decisions because essential ground work has not been done,” added Mr Davies.
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