7 May 1999

Political clout small now assembly ballot is over?

DURING the National Assembly for Wales campaign there was agreement from all parties that agriculture west of Offas Dyke was in deep trouble.

With most commodity support payments determined by the EU, solutions suggested by candidates focussed on the exploitation of agri-environment schemes, obtaining structural funds, local value-adding processing of primary products, and the branding of Welsh food.

Farming unions supported all these ideas in principle, but insisted that faster acting remedies were needed to counter the forecast 41% drop in average net farm incomes in 1998/99. The case was given a sympathetic hearing while there were seats to be won. But with the ballot now decided, Welsh agricultures real political clout is small.

The industry contributes only 1.8% of Welsh gross domestic product. Even in the most rural areas, like Powys and Ceredigion, it directly employs only 21% of the workforce. But those who supply and service farming are key employers in many areas.

"The economic prosperity of farming has far reaching implications in terms of its ripple or multiplier effect on the employment and incomes of ancillary industries," says Bob Parry, president of the Farmers Union of Wales.

"The crash in incomes has forced thousands of farmers, and those who work with them, on to the streets to protest. Agriculture is the cornerstone of the rural economy, and the money it generates is the cement binding the rural communities that sustain the Welsh environment, culture and language."

Hugh Richards, president of NFU Cymru-Wales, agrees and warns that current income levels are untenable, and can only lead to bankruptcy and decay of the rural infrastructure.

Mr Richards insists: "The consequences for rural businesses, the environment and heritage of Wales of not having a healthy, vibrant and viable farming industry will be far reaching. We cannot overestimate the damage that would result from failing to redress the decline in farm incomes."

UK agriculture faces many changes in the coming years. Welsh

farmers are concerned that, with their smaller, more intensively

stocked units, they may suffer to a greater degree than the

rest of the country when it comes to switching hill payments

to an area basis. There is also a great deal of concern in the

Principality about the future of Milk Marque, lack of funding

for agri-environment projects and the dearth of young people

entering the industry. Robert Davies reports

Casualties are inevitable, WIRS

A TOP Welsh agricultural economist says the industry is in a dire state, and casualties are inevitable.

Michael Haines, director of the Welsh Institute of Rural Studies, Aberystwyth, believes farming has hit the bottom of the trough. But he fears that only resourceful, technically competent effective marketeers are sure to be able to climb out.

"I think we will look back to the early 90s and see it was the golden age of Welsh agriculture. Stability will return, but there will be fewer farmers."

He says farmers are victims of events beyond their control. They have improved their products and productivity, and cut production costs by becoming more efficient. But they have been steamrollered by events like BSE, the ban on beef exports and falling farmgate prices.

"They have improved marketing but can do nothing about the strength of sterling and interest rates that are far higher than in the rest of Europe. Sadly it is difficult to see any improvement in average prices so survival will depend on promoting Welsh products better and trying to earn price premia."

Prof Haines favours the concept of adding value to primary Welsh products, but is sceptical about farmers relinquishing their independence and becoming loyally committed to new co-operatives with processing facilities. And with so many farmers strapped for cash he does not believe it will be possible to get the money required from producers.

HLCA conversion big cause for concern

WELSH farmers are very worried about the conversion of Hill Livestock Compensatory Allowances from headage to area payments.

More than 80% of the land in Wales is less favoured, but is divided into units that are smaller and, thanks to long-term investment in land improvement, more intensively stocked than in Scotland and England. The average farm is 60ha (148 acres) and carries 340 ewes and 21 suckler cows.

This year, HLCA payments in Wales will amount to around £40m and both farming unions want this total increased, or at least ring fenced for the year 2000. While they may get that, they know that the sum will be distributed differently.

Farmers claim that unless payments are historically based, large ranched farms will gain at the expense of some of the most efficiently run units. They also fear the impact of possibly extending payments to less favoured area (LFA) land carrying arable crops, dairy cows and even deer unless total funding is increased.

Privately union leaders accept that there will be no extra money, and that the changes will mean some winners and some losers. They warn that robbing Peter to pay Paul will inevitably mean small upland farms are no longer viable.

NFU vice-president, Tim Bennett, who farms LFA land in Wales, says that area payment regulations will not be tabled until the end of June, and that could be followed by a year of consultations and debate.

"EU officials are not saying that historically-based payments are definitely ruled out. We have to work hard to ensure all LFA farmers are treated fairly," he says.

The NFU and the FUW insist that transitional arrangements must be in place to ensure that support payments are made from the beginning of next year.

Both unions are consulting their members and report that the threat to headage-based support is causing deep concern among those whose incomes are very low under the present system.

"The problems of LFA farmers are well-documented and are acknowledged by politicians from all parties," says Mary James, the FUWs director of agricultural policy. "Change is always disconcerting, but is even more so when the very survival of a farm business, and of hill farming communities are threatened.

"We will be fighting for the nature of LFA farming in Wales to be recognised when payments are decided. And we want the money to continue to come from the Treasury directly rather than be paid as part of the block grant to the National Assembly for Wales."

Tir Gofals £12.4m budget peanuts – scheme supporters

THE long-awaited launch of Tir Gofal, the first all-Wales agri-environment scheme, disappointed both farmers and conservationists.

All bodies with an interest in land use contributed to the development of the scheme, and there was universal backing for the concept. But the £12.4m budget for three years, which the Welsh Office claimed was a "massive commitment to environmentally-sensitive farming" was described by the schemes supporters as peanuts.

Instead of providing for 3300 successful applicants as most people expected, the 36-month budget is enough to cover set-up costs and payments to only 1800 contracted farmers. The ranking system to be used to select these means many who were envious of the 1023 farmers involved in the three-area pilot project Tir Cymen, which the new scheme replaces, will be disappointed.

Access to the environmentally sensitive areas, access, habitat and moorland schemes will also end.

The new scheme offers annual whole farm area payments of up to £3000 a unit, plus a mixture of payments for mandatory and optional habitat management agreements and capital works. Individual farms can also boost total grants to a ceiling of £5000 a year by providing permissive access.

Rob and Liz Owen, Caecethin, Llanfair, Merioneth, believe that a great opportunity to build on the improved relationship between farmers and conservationists has been missed. They are taking full advantage of Tir Cymen, and it is helping to keep them in business.

Funding to renovate stone walls, to create a pond and to protect sensitive habitats has improved the appearance of their 28ha (70-acre) less favoured area farm. That has contributed to the success of the farm park and nature trail they have opened to the public.

"It is impossible to make a living on a farm of this size," Mr Owen claims. "We decided that all resources on the farm had to be exploited, which included marketing good environmental management by providing access for visitors who flock to the area."

Now about 15,000 people a year pay to view old slate quarrying caverns on the farm, to touch the lambs, goats, rabbits in the mini farm park, and to follow the trail down to the pond, which was an overgrown eyesore before work started.

"Tir Gofal funding should have taken account of potential benefits to the whole rural economy and local communities. All farmers take care of the environment and I am disappointed that many more farmers will not be able to benefit from doing so."

Census shows land split

WALESS 1.66m hectares (4.1m acres) of agricultural land is divided into 28,000 significant holdings.

About 73% of farms are owner-occupied while 3000 farms are wholly rented. Only 24% of the area is not designated less favoured, and 53% of land is severely disadvantaged. The December census indicated that Welsh farms carried 1.25m cattle and calves, including 280,400 dairy and 223,100 suckler cows. There were 7.7m sheep and lambs. About 52,000 people are engaged in work on agricultural holdings in Wales.

Fears that MM collapse may force dairymen out

WELSH farming leaders claim that some members fear being forced out of milk production by the collapse of Milk Marque.

The co-op is the only buyer operating in some remote parts of Wales. Delay in publishing the Monopolies and Mergers Commission report, coupled with the fall in milk price, has greatly increased uncertainty about the future. Whenever dairy farmers get together a growing number predict the imminent demise of MM.

Even its strongest supporters admit they are worried. Hugh Richards, president of NFU Cymru-Wales, reports that only six of 23 producers in his parish who signed up originally are still selling to the co-op.

The Welsh Institute of Rural Studies supports co-operation in principle, but increased income from its second dairy herd by £25,000 over two years by leaving Milk Marque and supplying a co-operative creamery direct.

Pembrokeshire producer Mansel Raymond, chairman of NFU Cymru-Waless milk committee and vice-chairman of Milk Marques south Wales council, says that to survive it must start negotiating higher milk prices, cut administrative and transport costs, and work closely with other quota holding groups.

"The fact that we have 40-odd mini producer groups in this country is ridiculous," Mr Raymond claims. "Processors are playing one off against the other and we are being picked off for their benefit. We need Milk Marque to survive – I can live with it having only 25% to 30% of the milk – and be in dialogue with the other half dozen largest quota holding groups."

He admits that involvement in processing is essential for Milk Marque to survive and prosper, and he believes that a combination of farmer and outside investment can be raised.

Roger Evans, one of the co-ops five farmer directors, agrees that members have been lost through retirement and switching to other buyers, but refutes suggestions that membership is in terminal decline.

New entrants worry

WELSH farming unions are worried that a shortage of tenancies and lack of incentives are starving the industry of new entrants.

Only 12% of agricultural land is wholly rented, and this area is reducing as local authorities sell off their smallholdings and more estate owners start farming land in hand. Prices offered when smaller farms reach the market are frequently inflated by bids from established farmers who are hungry for more land, and from non-farmers who want the house and a parcel of land, and who then rent out the remainder.

Even though many farmers children are refusing to enter the industry, there are still many who are keen. However, they find it difficult to get hold of land at a price that can be justified by its income generating potential.

Their plight was highlighted when politicians from the main parties visited Castell Llwyd, Nelson, Glamorgan. They heard that even after five years of working seven days a week Bethan Williamss dream of farming in her own right was still in the balance. She said that without the continuing support from her own family, and that of her husband of 20 months, Edmund, the business would not have survived the collapse in returns from their 320 Welsh Mountain ewes and 24 suckler cows.

"Last year we broke even, but that was thanks to income from providing a small number of farmhouse respite holidays for people with learning difficulties," said Mrs Williams. "Because the UK does not offer proper support like reduced interest loans, new entrants to farming are very vulnerable."

The 77ha (192-acre) severely disadvantaged farm had been bought for a reasonable price because the house was isolated and had no mains water or heating. The land was not in good heart and many fences needed replacement.

"But if I had borrowed the money needed to buy, fence and stock this farm from a commercial source, rather than from my parents and brother, I would have gone under. I feel it is so unfair that Edmund and I work such long hours, for a fraction of what others earn for working 8am to 5pm." &#42