Welsh farmers are failing to benefit from increased commodity prices because of rising production costs, according to the Farmers Union of Wales.

While UK income from agriculture went up by 5.7% last year, Welsh Assembly government figures showed Welsh farming incomes slumped by 4%.

Nick Fenwick, FUW policy adviser, said media reports of a “boom-time” for farmers were misleading the public over the state of agriculture, particularly for Welsh livestock farmers.

Spiralling costs

Even arable farmers, which make up fewer than 1% of Welsh holdings, found spiralling costs were fast outstripping increased returns.

“The livestock sector is still struggling,” he said. “Yes, there is an improvement in prices for beef and lamb, but production costs have risen alarmingly.

“The fact that the UK’s agricultural income rose last year despite foot-and-mouth disease demonstrates stark differences between farming in Wales and the UK as a whole.”

Talk of a boom?

Mr Fenwick’s comments came during a visit to hill farmer William Howells at Bridgend, South Wales, who also dismissed talk of a boom.

“Land prices in this area definitely aren’t responding to farming prices,” said Mr Howells, who farms beef and sheep on 350 acres of disadvantaged land with his son, Robert.

“Livestock prices have increased but costs have soared, so we won’t see any gain. If lamb prices stay as they are then I will get £7000 more than last year for my 600 lambs.

“But we have spent £2000 more on fuel, £1000 more on sheep cake, and £3200 more on 30% less fertiliser, as well as increased insurance, vehicle taxes and maintenance costs.”

Testing

An outbreak of TB on a nearby farm also means Mr Howells has had to move from 48-month to six-month tests, as well as tests before selling suckler calves.

“And now there’s the cost of the bluetongue vaccine,” he added.

John Squire, accountant at Graham Paul, said he feared increased costs would outstrip the benefits of additional income, even for his dairy and arable clients in the Vale of Glamorgan.

“The difficulty for Wales is that it is historically a harder place to farm,” he added.