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Farming

Market volatility hitting family farms

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REBECCA EVANS AM – Deputy Minister for Farms and Food, visited the Haverfordwest Creamery to better understand the challenges facing the dairy sector and the plans that farmer-owned First Milk have in place for the future.
Haverfordwest Creamery processes the milk from nearly 300 local dairy farmers, who are all co-owners of the factory and located within a radius of 50 miles.
After completing a factory tour, which included speaking with local employees and a local farmer representative, the Deputy Minister said:
“In the last 12 months we have witnessed volatility and low prices in dairy markets around the world, which has had a direct impact on family farms across Wales. We are working closely with the industry, through our Dairy Task Force, to increase the demand and add value for Welsh milk and milk products.
“I believe that well-invested farmer-owned facilities, such as this creamery in Haverfordwest, are vital to the long-term vision of an efficient and sustainable dairy sector in Wales. One which delivers benefits for the wider rural economy.”
First Milk’s site director at the creamery, Paul Rowe commented: “Haverfordwest Creamery creates approximately £70 million of economic activity per year in West Wales. It processes over 260 million litres of local milk and turns it into 28,000 tonnes of award-winning cheeses, with over 100 local people employed in our cheese making and distribution operations.
“Haverfordwest Creamery is one of the most efficient in the UK and a large proportion of the investments we have made, over the last few years, have only been possible with the support of the Welsh government.
“Dairy markets are very tough right now and dealing with this is our immediate priority. However over the longer-term we firmly believe that the Haverfordwest Creamery is well placed to take advantage of the growing global demand for dairy products. We will continue to work closely with the Welsh government in developing these opportunities for the benefit of our local farming members and owners.”
Addressing the annual DairyCo conference at the University of Aberystwyth the following day (Friday, March 6), Rebecca Evans, announced the completion of the Welsh Dairy Review.
In October, the Deputy Minister announced she was commissioning an independent review of the Welsh dairy sector. She asked Andy Richardson, a member of the Dairy Task Force for Wales, to lead the review, which was commissioned in response to difficulties faced by dairy farmers last autumn, as well as an opportunity to review the voluntary code which had been in operation for two years.
She recently received the final report from Mr Richardson, who categorised his recommendations under five key headings: Leadership, Market Focus, Efficiency, Knowledge and Skills and the Environment.
The Deputy Minister said: “One of the things that has particularly concerned me about the recent cut in the price of milk is the impact on confidence and the possible knock-on effect this could have on investment within the sector.
“Andy Richardson’s review suggests that the mood, both amongst farmers and processors, may be more positive than perhaps is being portrayed and that is good news – without continued investment the future will look very bleak.
“As the price paid for milk continues to fall, many farmers and processors in Wales continue to operate under extremely challenging conditions on a daily basis, as the industry faces a very difficult period, one fundamentally driven by an over-supply.
“I am however confident there is a secure and profitable future for dairy in Wales. As I have said many times before, we have the land, the animals, the labour and the infrastructure. Evident from Andy’s review is that we also have the commitment, the passion and the willingness to change and to adapt that will see us through our current difficulties.
“It is so important to me that we continue to support the sector by taking on board the views of those working within it, and help to grasp the opportunities that exist.
“Following discussions with farmers and processors across Wales, Andy has been able to provide a vision of the future for the whole of the dairy sector which sets the direction for a more sustainable industry in the future.
“I would like to thank Andy for his work, undertaken in such a short period of time. I expect to publish the report, alongside the Welsh Government’s formal response, in the form of an action plan once I have given it due consideration.”
The Dairy Review was intended to draw on the work already undertaken by the Dairy Task Force but looked wider, taking views from all parts of the supply chain. It also considered what support the RDP 2014 – 2020 may provide to dairy farmers and the milk processing sector in Wales.
Meanwhile at Carmarthenshire’s recent NFU-Cymru conference, NFU President Meurig Raymond assured union members that the NFU was doing it all it can to assist its milk producing members get through the current price volatility when he spoke at the recent Carmarthenshire NFU Cymru conference.
Mr Raymond explained helping farmers within the milk industry was the Union’s top priority at present. He said he has met with the leading banks to ask them to help farmers at this difficult time. He has met with Government to discuss tax concessions. They’ve given evidence to the Efra Committee asking for more powers to the Groceries Code Adjudicator. The NFU has spoken to milk buyers, particularly First Milk. Mr Raymond also told those present how he has personally had some very difficult meetings with the major retailers and has had some assurances that they will stock more British dairy products in the future.
Mr Raymond said, “We are grateful to shoppers for the positive messages we’ve received as dairy producers and pleased that so many consumers have come out and backed British dairy farmers at this time. We’ve been inundated on social media in particular by shoppers wanting to know where they should buy their dairy products to help us most. In response we have said that shoppers have to check the labels to make sure they are definitely buying British produce – not something that looks British. The Red Tractor mark is a good quick indicator. I would like to take this opportunity to thank the British public for all their support at this time.”

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Farming

FUW welcomes new minister

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Minister for the Environment: Hannah Blythyn

THE FARMERS’ UNION OF WALES has welcomed the announcement in continuity in the Welsh Government, following the Cabinet reshuffle (Nov 3), which saw Lesley Griffiths continuing in her role as Cabinet Secretary for Energy, Planning and Rural Affairs, with the addition of a deputy, Hannah Blythyn as Minister for Environment.

Responding to the news, FUW President Glyn Roberts said: “We welcome the continuity of keeping Lesley Griffiths as our Cabinet Secretary. Our working relationship has been a positive one and we look forward to continue working with her.

“With issues such as climate change and water management dominating agendas such as those listed in the Well-being of Future Generations Act, we are pleased to see Mrs Griffiths will be able to continue to fight for the interests of our rural communities – communities for which agriculture is a cornerstone.

“We are also pleased to see that Hannah Blythyn has joined the Cabinet. The addition of a new Minister recognises the complexity of the portfolio and we look forward to working with Hannah in the context of her remit.

“We met with Lesley Griffiths last week and will now seek a meeting with Hannah Blythyn at the earliest opportunity, to discuss those issues which are of concern to farmers and have an impact on all aspects of her portfolio.”

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Farming

Commitment on funding welcomed

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Addressing NFU Cymru conference: Lesley Griffiths

NFU CYMRU has welcomed the Welsh Government reaffirming its commitment to ring-fence funding for Welsh farming post-Brexit.

Last week NFU Cymru met with Cabinet Secretary for Environment and Rural Affairs, Lesley Griffiths AM, and in a wide ranging discussion covering a range of topics, Brexit topped the agenda.

Following the meeting, NFU Cymru President Stephen James said: “I am pleased that in our meeting with the Cabinet Secretary, Lesley Griffiths AM, she reaffirmed the commitment from the First Minister that funding for Welsh agriculture from the UK Government to the Welsh Government will be ring-fenced for Welsh farmers post-Brexit.”

The Cabinet Secretary’s commitment follows on from a response that the First Minister gave to Plenary on October 24 and reaffirms the commitment in the Welsh Government / Plaid Cymru Securing Wales’ Future document which stated that it is ‘essential that equivalent or greater resources to those Wales would have received from the Common Agricultural Policy (CAP) are provided from the UK to support Welsh farming’.

Stephen James continued: “NFU Cymru’s message on future funding arrangements has been clear and unequivocal. Governments in Cardiff and Westminster must maintain current levels of investment for farming in Wales, to ensure Welsh farmers remain competitive and can continue to produce food to the highest standards whilst maintaining and enhancing our environment and meeting our climate change obligations.

“At Plenary, the First Minister mentioned that he would consider looking at alternate ways of working and we would absolutely agree with that. This is an opportunity for us in Wales to work collectively to create a new agricultural policy framework that helps to achieve our vision of a productive, progressive and profitable farming industry that delivers jobs, growth and investment for Wales.

“We see the development of a new policy framework as an evolution over a period of time, with the timeframe for change very much determined by our future trading relationship with the EU.

“With the UK Government having committed to the same cash total in funds for farm support until the end of this Parliament, the next step is for the UK Government to clarify how these funds will be allocated amongst the home nations. This allocation should be based on the current formula for distributing CAP funds within the UK.

“Farming is a long term business and we need clarity and certainty on a range of issues including funding, trade and future agricultural policy. Developing agricultural policy and budgetary frameworks should be developed in partnership between the governments of the UK, so that a common policy framework can be agreed. A common policy, but a policy which allows flexibility for each country to take account of the pattern and practice of farming within their country.”

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Farming

Family farms on the brink

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Under threat: Over 80% of small farms are struggling

FEWER than one in five family farms are making a profit from their farming activity, according to research undertaken by the Andersons Centre on behalf of The Prince’s Countryside Fund.

Analysis of data from 172 participants in the first year of The Prince’s Farm Resilience Programme has shown that the average farm made more than £20,000 loss from farming activities, and instead is reliant on other income streams to make a profit.

The shortfall was made up by income from non-farming activity, such as tourism enterprises, renewables, direct selling of products to the consumer, or income from working off farm as well as farm payments.

According to the report, broadly speaking, farmers face two business choices in order to cope with declining economic fortunes: either to focus on a farming solution or to redeploy resources away from agricultural production. In reality, it may be a combination of the two or farmers may vacillate between the two courses of action with periods of off-farm work generating income interspersed with a focus on the farm.

There are, of course, two further options open to farmers. First, they may cease farming, either entirely through selling up the farm or by letting their land. Or secondly, they might tighten the belt and continue business as usual.

Worryingly, many operators of small farms, believe the near future will see them retiring or otherwise leaving agriculture altogether.

Lord Curry of Kirkharle, chairman of The Prince’s Countryside Fund said: “Although the initial figure is startling, the research from the Andersons Centre shows that farmers are increasingly looking at their farms as a business, and are proactively looking for how they can generate an income from diversified sources to remain profitable.

“This is more crucial now than ever. Farmers must develop their skills and improve their business confidence to survive. If they do not, the risk of extinction for the family farm is very real; farmers must act now to both strengthen their core farming business and to spread the risk.

“The Prince’s Farm Resilience Programme is vital, because it equips farmers with the tools they need to remain financially stable. Maintaining diversity of farm size is essential to protect the British countryside and our rural communities.”

The Andersons Centre developed a bespoke and easy to use Business Health Check Tool for The Prince’s Farm Resilience Programme, allowing farmers on the programme to benchmark their performance, identify their strengths and weaknesses, and make informed business decisions as a result. Data from this tool was analysed to identify trends and performance in the farm businesses involved in the initiative.

The Prince’s Farm Resilience Programme aims to help 300 family farms, across 15 locations, each year. It brings together like minded family farm enterprises in local networks, to review their current activity and identify improvements and opportunities that can be made on-farm to build resilience, effectively helping farmers to take control of their businesses. Farmers who took part in the first year have confirmed they have higher levels of confidence in their business, better business management, and stronger communication within their family.

The Prince’s Farm Resilience Programme directly addresses some of the issues raised in a report commissioned by the Fund from the University of Exeter, ‘Is there a future for the small family farm in the UK?’

The report detailed how the loss of small family farms would have devastating effects for the British countryside, leading to loss of employment, breakdown of rural communities, and potential negative environmental consequences. The report concluded that it was essential to maintain a diverse range of farm sizes, but that this was in significant jeopardy.

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