Long-term prospects for Welsh agriculture and the rural economy are good, despite the economic downturn, says the Country Land and Business Association.

But grounds for optimism depend on continued support from the Welsh Assembly government, long-term trends in energy prices and commodity prices, CLA Wales chairman Ross Murray said.

Speaking at the Royal Welsh Winter Fair on Monday (1 December), Mr Murray said people should look at what they could do to help their businesses and position them for any economic improvement.

“The role of the banks will be critical and I suspect that the agricultural bankers are relatively comfortable with the security they’ve got from the farming sector in Wales,” he said.

“Certainly the land values might have come off their peak, but they are still staggeringly high and, hopefully, the banks will support their clients and see them through a difficult time.”

But Mr Murray said the one-year exemption on empty business property rates would not restore confidence.

The minor reprieve would not give landowners and managers the impetus they needed to embark or continue on expensive projects that are vital to the rural economy.

He said: “The scale of investment can range from tens to hundreds of thousands of pounds.

“But each one of these developments, carried out by a range of different-sized rural businesses, are vital to the rural economy and can bring wealth and jobs to disadvantaged areas.

“The development of each one is based on long-term decisions and carries huge risk in terms of capital invested, usually borrowed. These are particularly challenging times when even normally solid businesses are threatened.

“It’s tragic enough when a business has to fold because of recession and it’s terrifying when individuals who have invested heavily face long periods when their buildings are bringing in no return through no fault of their own.

“To face what amounts to swinging penalties imposed by the government on top of that is the ultimate disincentive.”

Mr Murray said the Assembly understood the issue, but it had to follow the line taken by the Treasury.

The government was discouraging redevelopment with punitive taxes which should be levied on occupiers for use of local services.

Rural and urban regeneration will suffer as will the built heritage as schemes are put on hold or buildings demolished.