NFU Cymru warns of “extremely concerning” economic impacts from Sustainable Farming Scheme modelling
NFU Cymru warns of “extremely concerning” economic impacts from Sustainable Farming Scheme modelling
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NFU Cymru has urged the Welsh Government to address “extremely concerning” findings from new economic modelling that suggests the revised Sustainable Farming Scheme (SFS) will still lead to reduced income, jobs and production across the agricultural sector.
The Welsh Government on Tuesday (30 September) published its updated evidence base for the SFS. The independent analysis estimates reductions of around 5% in livestock numbers, 4% in on-farm labour, and 16% in farm business income under the universal actions proposed.
Deputy First Minister and Cabinet Secretary for Climate Change and Rural Affairs, Huw Irranca-Davies MS, said the evidence demonstrates that the new scheme is expected to deliver “better outcomes and better value for money than the current system of support centred around the Basic Payment Scheme.”
While these projected impacts are less severe than those contained in the 2023 impact assessment, NFU Cymru said the latest estimates still point to significant risks for Welsh farming, rural communities and the £10 billion food and drink industry.
NFU Cymru President Aled Jones said the findings must act as a wake-up call. “The economic modelling estimates a reduction in the number of jobs, income and production when compared to the previous iteration of the modelling, however from our perspective the numbers projected this time around remain extremely concerning.
“There is, therefore, more work to do to support Welsh farming, as well as the businesses and communities that we underpin, alongside securing the critical mass of production from our farms that supports the £10 billion food sector in Wales.
“The Welsh Government SFS announcement ahead of the summer recess included many positive changes to the SFS scheme design, including the important addition of the social value payment NFU Cymru had lobbied so hard for.
“Such changes reflected the work undertaken over the past seven years, in particular since the establishment of the Ministerial roundtable and sub-groups, to ensure that the wider benefits provided by farming are recognised and valued.
“NFU Cymru is looking to government to commit to use the information published today to review and address elements that negatively impact on income, jobs and production levels. We highlight the need for Welsh Government to urgently work with the farming industry to bring forward proposals under the optional layer of the SFS that support farm efficiency, productivity and increase profitability and the sustainability of farming businesses.”
The union reiterated its position that the SFS should provide at least the same level of economic stability as the Basic Payment Scheme (BPS).
“We have always maintained that the SFS should provide at least the same level of economic stability to Welsh farming, the supply chain and our rural communities as the Basic Payment Scheme (BPS) does currently.
“A move to a new scheme should not leave farmers financially worse off. We are clear that a properly resourced universal layer and social value payment must, therefore, continue to be at the heart of the SFS both now and in the future.
“We look to the next Welsh Government for an ongoing commitment to maintain, as a minimum, the current 70:30 budget split between the universal and optional /collaborative layers.
“Looking ahead, the next government should increase this budget to a minimum of £500m to take account of inflation and to help meet our shared ambitions for food, climate, environment, communities and language.”
The removal of the proposed 10% tree cover requirement was welcomed, but Jones said concerns remain over the 10% habitat requirement.
He continued: “The removal of the well-documented 10% tree cover requirement has been a significant step forward. The scheme requirement for 10% habitat remains an area that we believe needs to be kept under review, both in terms of the conditions attached to the habitat classifications and through an expansion of the range of temporary habitat options available to all farming businesses.
“The new scheme is a very significant change for farmers. We remain concerned about the level of detail, constraints, administration, costs and bureaucracy attached to the SFS which is significant and far greater than anything seen before.
“As the scheme reaches implementation stage, we are seeking reassurances from Welsh Government that Rural Payments Wales (RPW) will adopt an advisory-led approach to delivery and seek to minimise the stress and anxiety that farmers experience at inspection and the disproportionate system of penalties.
“More broadly, NFU Cymru continues to lobby for an independent review group to consider the cumulative burden of regulation, red-tape and bureaucracy facing the agricultural sector. Such a review needs to be ambitious and all-encompassing, encouraging and supporting an enabling policy, regulatory and planning framework for Welsh farming.
“NFU Cymru will now take the time to further examine the new evidence base. In the coming weeks, we will be meeting the Deputy First Minister to raise the issues we have identified.
“We will continue to do all we can to ensure that Welsh Government’s agricultural policy provides the stability needed for farming families so they can continue to provide high quality food, continue to deliver for our environment and underpin our rural communities, culture and Welsh language.”
Farmers are being urged to engage with the revised scheme by using tools such as the SFS ‘ready reckoner’ and completing the data confirmation exercise before the 31 October deadline. NFU Cymru has also scheduled a series of SFS surgeries across Wales to help members navigate the changes.
Mr Irranca-Davies acknowledged the evidence has limitations but stressed that it should be considered in its entirety. He said: “A lot of the data is based on modelling outputs which we must remember are not predictions of what will happen. I would also stress the importance of looking at this evidence together and that individual pieces are not considered in isolation. No individual figures or pieces of evidence tell the whole story.”
The economic analysis published alongside the business case shows potential short-term impacts on Farm Business Incomes (FBI), farm output and labour use from completing the Universal Actions required under the scheme. However, the Minister said this is likely to overstate the negative effects because the modelling does not capture longer-term gains from efficiency and productivity improvements.
He explained: “It is important to understand the economic modelling is likely to overestimate this because, as a static model, it does not include any of the longer term positive economic benefit to farmers from undertaking those same actions. The SFS supports on-farm decisions that should lead over the longer term to reduced costs, improved productivity and better environmental outcomes.”
The scheme has been developed through years of consultation with farming representatives, environmental organisations and rural stakeholders, with the Ministerial Roundtable playing a central role. Irranca-Davies said:
“It is clear the Scheme has been improved considerably through collaboration.”
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