RDC(3) FOU2
Inquiry into the Future of the Uplands in Wales
Response from NFU Cymru
NFU CYMRU EVIDENCE TO THE RURAL DEVELOPMENT SUB-COMMITTEE INQUIRY INTO THE FUTURE OF THE UPLANDS IN WALES
Introduction
1. NFU Cymru represents an estimated 21,050 farmers, managers and partners in businesses in Wales. In addition we have 4,200 countryside members with an interest in farming and the countryside.
2. For the purposes of this inquiry NFU Cymru will define the uplands of Wales as that area currently designated as Less Favoured (LFA). This area represents approximately 80% of Welsh Agricultural Land area and within this area Hill and Upland Farming play a crucial role economically, environmentally and socially.
3. In addition to the primary role of food production, hill and upland farming plays a vital role in protecting the environment and in the sympathetic management of fragile landscapes. Farmers and their families are at the heart of most economic, social and cultural activities within these areas. The landscape of the uplands, shaped and maintained by farmers is important to the growth and development of the Welsh tourism industry and farmers in the uplands of Wales play a crucial role in the survival of the Welsh language and culture.
4. However farm incomes in the uplands have been at pitifully low levels over the past decade. Figures published by the Welsh Assembly Government on the 24th February 2009 show net farm income for grazing livestock farms in the LFA at just £14,900 for 2008, since 2001 average net farm incomes have varied from just £1,600 in 2001 / 02 to a maximum of £15,900 in 2003/04. From these figures investment within the business must be funded as well as returns to the principal farmer and spouse. Without a sustainable income it becomes impossible to keep both people and livestock in the hills without which none of benefits highlighted at paragraph 3 can be achieved.
5. Upland farmers face many challenges and uncertainties over the coming years. In terms of policy changes there will be EU budget negotiations, further CAP reform, a major change to Land management schemes with the introduction of Glastir from 2012 and the implementation of the EC boundary review currently scheduled to be implemented from 2014. The uplands will have an important role to play in terms of alleviating the impact of climate change, at the same time the role of upland farming in food production will become ever more important to feed a growing population.
Questions for the future of the Uplands in Wales inquiry:
What form should future public support for the uplands take (including consideration of the European Commission’s emerging proposal for the designation of Intermediate Less Favoured Areas)?
6. Due to adverse conditions in terms of climate and land capability farmers in the uplands of Wales have to contend with generally low levels of production and significant restrictions on the types of enterprise that the land can support. Given the nature of the landscape, general infrastructure and distance from centres of population, opportunities for diversification are less and more restricted giving farmers little option but to concentrate on livestock production.
7. However unless agriculture in the uplands is viable then all the wider environmental and social benefits are also lost. Support for farming in the uplands of Wales through LFA support schemes (most recently Tir Mynydd) has been crucial in maintaining the viability of thousands of businesses and has not just maintained food production but also improved the landscape and level of traditional skills (hedging, stone walling etc.) and has prevented depopulation and land abandonment in the uplands of Wales.
8. In terms of the current European Commission LFA Boundary Review NFU Cymru would agree with the main policy objectives of the review which are:-
To adapt the intermediate LFA delimitation and payment system in order to target the aid to the preservation of sustainable farming activity in areas affected by Natural Handicap.
To ensure transparency and complementarity with other measures.
To limit the administrative burdens linked with the measures.
9. NFU Cymru believes that in Wales the basis for the current LFA designation based on Agricultural Land Classification is robust and transparent. Designation is based on physical objective criteria that measure permanent natural handicap and which by their very definition will not change over time. Whilst NFU Cymru can appreciate the need for objective criteria and for transparency throughout the EU to prevent the criticism made by the Court of Auditors report in 2003 we are confident that the integrity of the current designation in Wales will stand robust and detailed scrutiny by the EU.
10. The Review sets 8 common EU-wide biophysical criteria for delimiting LFA areas across the EU 27. Clearly the handicaps faced by member states vary hugely, for example heat stress and soil water balance are issues of concern to the more southerly member states whilst others relating to stoniness may be more relevant to Northern European countries so it is important that if common criteria are used that they cover all potential handicaps encountered in member states.
11. NFU Cymru believe that the 8 bio-physical criteria and the corresponding cut-off ranges presented fail to reflect accurately land with very severe limitations to agriculture in Wales. Specifically, the effects of the cool, wet maritime climate on spring germination, plant growth, soil traffic-ability and harvest periods are not fully recognised. We suggest that a further criteria relating to the interactions between soil moisture and climate should be taken into consideration. Field capacity days (FCD) are a measure which indicates the “workability” of the land. It is the number of days when the soil moisture deficit is zero (rainfall exceeds evapotranspiration) and we believe this criteria would address the concerns we have over biophysical criteria.
12. In terms of the land area at which the commission have requested for definition to take place, this is requested to take place at a LAU2 level, in Wales this equates to designating LFA status at a Ward level. NFU Cymru firmly believes that in some cases, a smaller scale (possibly Parish basis) may give a better reflection of an areas agronomic potential. We therefore believe that simulations should be conducted at the most appropriate level suited to the member state / regions ability to collect relevant data. There should also be the potential for the system of designation to identify differing degrees of handicap. This means that, as is currently the case in Wales, the LFA area can be further defined as “Disadvantaged or Severely Disadvantaged”.
13. NFU Cymru is of the opinion that land exposed to structural handicaps such as peripherality and remoteness are at a genuine and legitimate disadvantage which is likely to remain permanently attributable to that land. Currently such structural indicators are regarded as socio-economic criteria. We firmly believe that socio – economic criteria should remain as part of any future criterion. If this is not possible we believe that peripherality and distance from markets remain genuine, long term handicaps which merit continued recognition in terms of LFA designation.
14. NFU Cymru is currently actively engaged with officials from WAG as to how the proposed new criteria will impact on LFA designation in Wales ahead of the need for WAG to submit maps to the commission before the 31st January 2010.
15. Finally it must be remembered that the designation of the LFA Boundary only sets out where additional resources may be targeted by the WAG to make up for the extra costs associated with farming in the LFA’s. Whether and how resource is targeted to these areas is then a matter for WAG. Our views on the proposed new land management scheme for Wales, Glastir, through which WAG propose to deliver LFA support in future will be discussed further on within this paper.
How can the uplands be valued for their contribution to the social and economic future of Wales as well as the environment?
16. In terms of economic contribution, as a rough estimate 80% of the beef suckler herd and 90% of the breeding ewe flock are located in the LFA areas of Wales and much of the livestock found in the lowlands has originated from the LFA. It is also worth noting that around 55% of the dairy herd can be found in the LFA. Upland farming therefore makes a significant contribution to a Total Income from Farming figure of £101 million in 2008 and to the gross output of Agriculture in Wales valued at £1,100 million in 2008. In terms of the labour force 42,132 people were engaged in work on LFA farms in 2007.
17. The Welsh Food Industry relies on the uplands for a significant proportion of its raw material and the tourism industry in Wales relies heavily on the landscape of the uplands to draw in tourists. These two industries contribute significantly to the GDP of Wales and without question the uplands of Wales contribute significantly to the value and success of both sectors.
18. To actually put a value on the uplands contribution to the social future of Wales is an impossible question to answer because to begin with what price do you put on the value of our culture and language in Wales, both of which are intrinsically linked to the people who populate the uplands of Wales?
19. In terms of the environment what value does society place on a biodiverse landscape, excellent water quality and the storage of carbon? We are aware that throughout the World there are various studies taking place to put a value on these outputs and it may be possible at some point in the future to put an accurate monetary value to the contribution the uplands make to the environment in Wales.
20. NFU Cymru have long argued that under Axis 2 measures of the Rural Development Plan farmers have not been adequately rewarded for the public / environmental good of farming in a sustainable manner. This is because the current payment formula for Axis 2 measures is based on an income foregone / additional costs calculation and does not compensate farmers for the public / environmental good of traditional upland farming.
How can government policy work with land managers’ needs to achieve the best use of Welsh Uplands?
21. Profitability and dealing with the issue of market failure is the key to addressing the needs of land managers in the Uplands of Wales. Unless the additional costs of managing this land in a sustainable way are addressed then there will be depopulation from the hills and land abandonment. This would have irreversible and adverse economic, environmental and cultural implications. Land managers are prepared to work with policy makers to address the massive challenges Wales faces going forward in terms of dealing with climate change, maintaining and improving habitats, water quality etc. but only if the policy makers ensure that the conditions associated with achieving these aims are practical and workable at a farm level and sit alongside efficient farming business. To achieve this goal active engagement and participation with people with experience of upland agricultural practices is needed at all stages of policy formulation.
22. This leads on to Glastir, the new land management scheme for Wales, announced by the Minister for Rural Affairs on the 5th May 2009. You will be aware that NFU Cymru have raised a number of concerns over Glastir and unless significant changes are made we do question how many farmers will be able to access the scheme and if take up is low then obviously not only will farmers suffer but also WAG and society as whole will lose out as the scheme will fail to deliver on the targets set. The following paragraphs highlight a number of ongoing concerns.
23. NFU Cymru’s preferred option would have been to continue with a “stand alone” Tir Mynydd Scheme rather than the integration of LFA support into “Glastir” but we can see that by making this new scheme deliver on climate change, water quality, biodiversity and soil carbon management the new scheme does make it less vulnerable to budgetary cuts when there is intense competition for resources with other WAG departments.
24. NFU Cymru has always taken the view that LFA support is provided to mitigate the additional costs associated with working in disadvantaged areas affected by permanent handicaps. Currently we also have distinction between the differing handicaps faced between the Severely disadvantaged areas (SDA) and the Disadvantaged areas (DA) of Wales, we are concerned that the differing levels of handicaps won’t be recognised in future under Glastir.
25. NFU Cymru has received no justification from the WAG in economic terms for the top up of 20% for LFA farmers on the entry level part of Glastir. Without knowing how this figure was calculated we have no way of evaluating whether or not this is set at a reasonable level. Our major concern is that this will be the only feature of the scheme that is available to recognise the difficulties and additional costs associated with farming within the LFA.
26. The LFA top up issue is of critical importance since the present Tir Mynydd scheme on many farms can be the difference between a positive and negative net farm income. In 2008 £29.7 million was divided between 11,593 claimants giving an average payment of just over £2,500 per farm business, when you consider that net farm income within the LFA was £14,900 the contribution of LFA support cannot be underestimated. When you consider that in recent times net farm income has been as low as £1,600 (Paragraph 4 refers) it is clear to see why the correct calculation of the LFA top up is crucial to whether businesses make a profit or loss in the uplands of Wales.
27. NFU Cymru is adamant that farmers in Wales must know the detailed conditions of both the entry and higher level elements of Glastir before making a decision on entering the scheme. It will be impossible for farmers to make an informed decision on whether or not they wish to participate within Glastir unless they are fully aware of the “whole package”.
28. The stated objective of the upper tier of Glastir is to target support at areas that deliver on the challenges set out in the EU CAP Healthcheck agreed in November 2008. NFU Cymru is very much opposed to the principle of targeting. All farmers in Wales are modulated and therefore all farmers should have the opportunity to recover that modulated money in return for contributing to the environment. If future CAP reform advocates a further shift of resource from Pillar 1 to Pillar 2 then clearly this exacerbates the position of those land managers unable to access the upper tier of Glastir.
29. We are unable to make any further comment at this moment of time on the Upper tier element of Glastir because we have not received any significant detail on this element.
30. NFU Cymru also feel it is unfair that those farmers currently involved in agri environment schemes have not been dealt an even hand compared to Organic producers who will eligible for a 50% points reduction for entry to Glastir.
31. NFU Cymru’s objective as far as the entry level scheme is concerned has been to ensure that as wide a menu of prescriptions as possible is available and to ensure that prescriptions are practical and workable and thus achievable at a farm level to ensure maximum participation in the new scheme.
32. We have been very concerned at the lack of modelling / piloting of the new scheme though following lobbying WAG have now capitulated and agreed to look at the impact of the new scheme on farms at different locations, farm types, sizes etc. This is essential to be able to ascertain any resource redistribution issues given the vulnerable state of net farm incomes in the uplands.
33. NFU Cymru has real concern at the process for application and the ability in resource terms of the Welsh Assembly Government to deal with applications given that there will not be project officer support available. NFU Cymru feels that WAG is underestimating the scale of the task that needs to be undertaken. It is imperative that every farmer and land manager who wishes to enter the scheme in time for its introduction in 2012 is able to, failure to do so will have major cash flow ramifications for farm businesses. With the ending of the Tir Mynydd scheme in 2011 everyone who currently receives a LFA support payment and who wants to participate in Glastir must be able to enter from the start date of the new scheme given the financial implications of any delay in entry to the new scheme.
How can a value be put on the natural, ecosystem services provided by the uplands, such as carbon storage and flood management?
34. NFU Cymru believe that the role of farmers and land managers in carbon storage and flood management has been undervalued in the past and at paragraph 20 we have questioned the format used to calculate payment rates under Rural Development Plan measures. Putting an exact monetary value on the issues highlighted within this question is difficult and we are aware is the subject of much debate throughout the World possibly one method would be to view this from the perspective of cost mitigation?
35. In terms of flood management, the uplands of Wales should be seen as part of the solution to flood management issues in Wales but not the only solution. We are concerned for example by the recent consultation on a Flood and Water Management Bill for England and Wales which puts a value on homes and businesses estimated to be at risk of flooding but does not include agricultural land in this equation. Agricultural land including land within the uplands of Wales are vital to food production and will become more important as we cope with the impact of a growing world population and the effects of climate change. It is estimated that global food production will need to increase by 40% by 2030.
36. In terms of carbon storage it is estimated that Wales’ soils contain over 400 mega tonnes of carbon, given the importance to maintaining or even to adding to this store in future to mitigate the impacts of climate change it will be increasingly important to ensure that farmers and land managers are rewarded for the value of maintaining this store.
How can climate change and the potential impacts of climate change be built into planning for the future of the uplands?
37. The potential impact of climate change is one of the biggest challenges the uplands in Wales face over the coming years. Whilst it is vitally important that farmers and land managers help to contribute to climate change mitigation and adapt where appropriate it is essential that this is done without compromising domestic production of food in the short, medium or long term. Mitigating measures employed in the uplands must be based on sound science and also be practical and achievable “on the ground”.
38. Farmers and Land Managers in the uplands will bear the brunt of any impacts of climate change which may be a mixture of positive and negative and whilst we agree that the impacts must be built into planning for the future the potential outcomes are so varied that it makes detailed planning very difficult to consider. A change in climate could impact on the types of crops grown or livestock reared and we only have to note the incursion of Bluetongue into the UK in 2007 to highlight the increase risk of incursion of exotic disease from a milder climate.
39. NFU Cymru would look to WAG to support farmers and land managers in their individual efforts towards tackling climate change through a sympathetic planning regime which will for example allow for the construction of rainwater harvesting facilities as well as on farm renewable technologies where appropriate. Glastir from 2012 will provide a £5 million annual grant for amongst other things the installation of renewable energy and energy efficiency technologies on farms; we have concerns whether this budget will be sufficient to cover the expected demand.
40. WAG have made it clear that Glastir is to be the primary delivery mechanism on climate change matters for land managers in the uplands in Wales and that a budget of £89 million for the whole of Wales has been allocated to this scheme. Clearly given the potential impact that climate change could have on Wales, financial restrictions could well have an impact on what can be delivered.
41. Planning for the future must also recognise that the uplands will have to play a part in meeting the increased demand for food as a consequence of rising global demand; this could have an impact on Wales’s greenhouse gas emissions (GHG). NFU Cymru takes the view that the primary role of farming is to produce food and as such upland farmers in Wales must not be prevented from responding to the market place. If our farmers are unable to respond to these signals then farmers in other parts of the world where climate change is not such a political issue undoubtedly will with the result that GHG emissions will merely be displaced to elsewhere in the world. The challenge for Wales is to increase production without a corresponding increase in GHG emissions, this can be done by increasing productivity, taking on board scientific advances and reducing “food miles” by increasing consumption of domestically produced product. Of critical importance to tackle these issues is the availability of adequate funding to support Research and Development in Wales specific to the needs of climate change mitigation and Welsh agriculture.
What are the roles of farming and forestry in the future of the Uplands?
42. The integration of farming and forestry in the uplands is vital not just because of the financial importance of farming and forestry but also for the role they both play in carbon storage as previously highlighted within this paper. The balance between farming and forestry is important with a patchwork of improved and unimproved land of high landscape and environmental value. Maintenance of field boundaries is also integral to this landscape and this can only be achieved by the maintenance of skilled labour in the countryside. Future forestry policy needs to include shelterbelts with a mixture of broadleaf and coniferous woodland.
What role does common land have in the future of the uplands?
43. The common lands of Wales are as an important part of our heritage as any historic building and are an intrinsic part of the uplands of Wales. In Wales there is around 175,000 hectares of Common land which cover 8.4% of the total land area of Wales, the majority of which will be located within the uplands of Wales.
44. The term common is an unfortunate and misleading one in many senses, as it is only those with grazing rights that are in a position to maintain these areas. It is no coincidence that 66,000 ha (36%) of Common land in Wales are also Sites of Special Scientific Interest. Policies for the future need to recognise this and protect those that are in a position to achieve the aims of Politicians and decision makers. They are areas of land that are a vital agricultural resource to those that exercise their rights of common and they are central to the profitability of these farms but will only remain so if there are skilled shepherds in our uplands willing and able to farm these areas.
Conclusion
45. This paper has set out the importance that NFU Cymru places on ensuring a healthy and profitable future for the uplands of Wales. A viable and profitable farming sector delivers on a number of wider social, environmental, economic and cultural activities that all rely on the people who live and work on upland farms and on a landscape created, managed and maintained by farmers.
46. The support offered to 80% of Wales through LFA support schemes has been crucial to the maintenance of sustainable farming systems in the uplands of Wales and without this support there is no doubt that the result would have been depopulation and land abandonment in some of the most remote and fragile areas of Wales.
47. The uplands of Wales face many challenges from both the market place and policy changes in the coming years. EU budget negotiations, CAP reform, LFA Boundary review and land management policy changes need to be managed carefully and the combined impacts of these changes need to be factored together to work out their impact on the Uplands. It is also vitally important that sufficient resource is made available through the RDP to help compensate for the handicaps faced within the uplands and to adequately reward farmers and land managers for their contribution to the environment and climate change mitigation.
48. Farming industry concerns over the introduction of Glastir in 2012 need to be addressed to ensure that the scheme delivers on its stated objectives to farmers and to society at large. NFU Cymru is concerned that there will be a loss of resource from the LFA given the potential increase in claimants under Glastir set against the backdrop of a fixed budget. This is why NFU Cymru is adamant a full and detailed analysis of the impact of the introduction of Glastir on the LFA of Wales needs to be undertaken ahead of implementation.
49. Finally NFU Cymru believes that it is possible to deliver on the challenges outlined in this paper on climate change and the environment and at the same time the uplands of Wales can make an important and increasing contribution to securing food supply for an ever growing global population. However this cannot be achieved without support from WAG to address the additional costs associated with meeting these significant challenges.
