Why Welsh farmers are so angry

Let's break down the long running battle between the Welsh Government and farmers

Time for another newsletter and it is a beauty.

Originally this newsletter was going to cover both farming and my interview with First Minister Eluned Morgan. However it became revoltingly long and so I have decided to send them as two separate newsletters.

So tomorrow you will get the First Minister’s interview (which includes a juicy exclusive) along with a big chunk of analysis, and today you will get a breakdown of the battle that the Welsh Government is having with Welsh farmers.

You might think that the farming issue is a bit niche to dedicate an entire newsletter to, however it is worth bearing in mind that an astonishing 80% (80%!!!) of Welsh land is managed for agriculture.

But first a few words from our sponsor:

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Is there anything harder to domesticate than a Welsh farmer?

It feels that for the last few years, farmers and their associated protests have been all over the media. Yet despite this, it can be hard to actually get your head around what the issues are, what it means in a Welsh context and which side is “in the wrong”.

So to help you understand this I am going to break this section down into three parts (keeping it as concise as possible):

1. The context of farming and climate change in Wales.

2. What the new sustainable farming scheme (SFS) seeks to do and why it is so controversial.

3. What the new inheritance tax rules mean for farmers in Cymru.

I mentioned which “side is in the wrong”. I actually think this is a really unhelpful way to look at these debates. As anyone who reads this newsletter will know, I have absolutely no problem in criticising the Welsh Government. However I actually think the stances of both Welsh farmers and the Welsh Government have been fairly justifiable in the main.

There are huge societal challenges that we face and tough decisions and compromises are going to have to be made on both sides. Tackling the climate crisis while safeguarding farming communities is a problem for all of us. A bad result hurts everyone, it is in our collective interests to get this right. So let’s start with the context.

Cows in Bwlchgroes, Pembrokeshire (Copyright: Marc Pell)

The challenge

Obviously we want (need) Wales to become carbon neutral by 2050. Doing this is impossible without addressing the challenge of agriculture. Here are some headline figures:

• Agriculture accounts for around 12%-14% of Welsh emissions (UK-wide it is about 10%).

• The sectors of agriculture and land use, land-use change and forestry have seen their emissions fall by 18% since 1990. However, there has been little progress in reducing emissions in recent years.

• Direct methane emissions from livestock currently make up 61% of agricultural emissions in Wales with manure management contributing an additional 14% of emissions.

• In Wales, farming is the dominant land use with around 80% of Welsh land managed for agriculture.

If you want to decarbonise the heating of homes there is a pretty clear path to doing it. If you heat with electricity, and that electricity is from renewables, there are no emissions.

But you can’t decarbonise a cow or a sheep.

If methane emissions from livestock make up 61% of a sector's emissions, the way to reduce emissions realistically means having less livestock and making a big effort to offset emissions you can get rid of.

You know I love a graph so let me show you some from the Climate Change Committee (CCC), an independent non-departmental public body that advises the United Kingdom and devolved governments/parliaments on tackling and preparing for climate change. They released a progress report on how the Welsh Government was dealing with the transition to net zero and it was not good.

This graph is emissions from agriculture. We have actually been trending up a bit. Look at the change we need to make (the purple line) to hit target:

• The black line is historic data

• The purple is where the CCC say we should be at to hit targets

• The yellow line (when there is one) is the Welsh Government’s own ambition

For those nerds out there, the figure on the y axis is “million tonnes of carbon dioxide equivalent”

Woodland

Wales is enormously off track when it comes to annual woodland creation. The graph below shows the target for woodland creation compared to the actual result (the numbers on the side are for thousand hectares of woodland created) as well as peatland creation.

• The black line is how many thousand hectares of woodland the Welsh Gov created each year.

• The yellow line is the the Welsh Gov’s own target

• The purple line is where we need to be according to the CCC.

So what you have here is a really tricky situation for the Welsh Government. They want to reduce Wales’ emissions but to do this they need the farming sector to make significant changes.

This brings us to the…

Sustainable Farming Scheme (SFS)

In simple terms, the sustainable farming scheme is proposed Welsh legislation designed to replace the schemes in place when we were in the EU (because of course Brexit feeds into this).

The Welsh Gov had previously put forward a proposal that said, among many other things, that farmers must have:

• 10% of their land put aside for tree planting

• 10% of their land put aside as habitat

That point around 10% of land being put aside for tree planting was immensely contentious with farmers. I spoke at the National Farmers Union (NFU) Cymru conference and all anyone wanted to talk about was that 10% tree cover rule.

Farmers felt that it was arbitrary and would undermine the productivity of their land. This led to protests including farmers leaving loads of wellies outside the Senedd.

Farmers left their wellies outside the Senedd in protest

You can see why Welsh farmers feel that the Welsh Labour Government are not their friends.

Back in 2022 Mark Drakeford said that subsidies to replace EU funding won't be provided unless it can be justified to "Bangladeshi taxi drivers" in Cardiff. While the then First Minister’s point here does make sense (that there needs to be a justification for giving taxpayers money to farmers) it was unnecessarily combative and it was obvious that this was going to rub people up the wrong way.

We also had the Labour MS Mike Hedges in the Senedd who suggested that “there is no reason to subsidise agriculture” and that supporters of subsidies think “putting money in the pockets of farmers is more important than feeding kids”.

While all these protests have been going on there have been upheavals in the Welsh Government (Gething etc) and there is now a new minister in charge called Huw Irranca-Davies. He is widely seen in both politics and the industry as a competent and straight forward operator (plus having an immaculate goatee).

Given the opposition to the SFS the Welsh Government undertook a mammoth consultation which received over 12,000 responses. Following this they have drawn up a new proposed SFS which they published last week.

In it they removed the 10% tree coverage requirement for farms (though kept the habitat 10%). Now the target is for 10% tree coverage across the industry rather than on a per farm basis (though the details on this are yet to be worked out. They also made it more accessible to small farmers.

How has the industry reacted to the new proposal?

Cautiously optimistic is the best way to describe it. I spoke to the NFU Cymru Deputy President Abi Reader (who runs a farm in Vale of Glamorgan) she told me:

“The changes to the 10% tree cover has taken the toxicity out of it. Farmers are pleased they have been listened to.

We are currently waiting for the impact assessment of what it will mean because the last one said it could cost 5,500 jobs.

Farmers also need to know what exactly the payments will be but that detail is due to come out in the summer which is a very tight timeframe.”

Farmer Abi Reader

Why are farmers OK with 10% habitat cover but not tree cover?

“Habitat” is much to accommodate if you are a farmer. If you plant trees on a piece of land, that is pretty much what that land is now used for going forward.

The value of agricultural land is roughly £10k per acre (these are very loose figures). By contrast the value of forested land is about £2K/£3k an acre.

So if you are a farmer and you've got a mortgage or a loan and you suddenly change the value of your land, you don't have the assets to underwrite that debt.

Habitat also includes using land for hedges. From a farming perspective you can use this for example, for containing livestock. I don’t want to make this newsletter about hedges but they are actually pretty amazing from a biodiversity perspective. However this only applies if they are managed properly. If a farmer lets their cows graze right up to the hedge it significantly loses its use for animals, such as nesting birds.

Does the new SFS go far enough to get Wales towards net zero?

Of course, the measure of the effectiveness of this scheme in tackling Wales biodiversity and climate challenges will be in the detail, how well it is implemented, enforced and managed.

But there is reason to be sceptical that it goes far enough in its current form to meet these challenges.

Wales Environment Link (WEL) is a network of environmental, countryside and heritage non-governmental organisations. Following the proposals their director Karen Whitfield said:

“We recognise the pressure farmers face and the need to ensure that sustainable farming is economically viable.

However, the scale and pace of the proposed changes under the SFS do not reflect the urgency required to address the climate and biodiversity crises. A requirement simply to ‘have a tree planting plan’ and ‘some progress’ on its implementation is not enough; it can be seen as a first step, and we look forward to working with the Welsh Government on ensuring the plans’ application and governance is robust.”

So, at the moment, the anger around the SFS is dying down a little. However it has been replaced by the huge row over inheritance tax changes that UK Labour announced in the budget. This has some significant Welsh specific impacts that it is well worth understanding…

Why Welsh farmers are more vulnerable to the new inheritance tax rules than English farmers

The tweet above comes from Swansea West MP Torsten Bell. He was defending the UK Government’s changes to the tax farmers will pay when passing on their farms after they die. As you can see it gained A LOT of attention.