WAP - White Paper Welsh Agricultural Policy

Those are my views and analysis not those of my supervisors or funders. The fact that I raise some doubt or criticise the words (rather than the thinking) laid out in this white paper is purely a way to trigger an open and frank debate. There is still a lot of work to be done on this Welsh Agricultural Policy and most of my criticism come from the uncertainty surrounding some parts of it. Do not forget to contribute to the consultation to have you voice heard.

I tried to outline my personal thoughts and analysis in notes and opinion sub-sections to make clear what the Welsh Agricultural Policy meant for me.

FTA: Free Trade Agreement SLM: Sustainable Land Management WG: Welsh Government WAP: Welsh Agricultural Policy (and not Wet Ass Pussy)

Since the publication of this Blog Post a team of researcher at the CCRI (Countryside and Community Research Institute) drafted a response to the Welsh Agricultural Policy consultation that we submitted on the 26th of March. You will find below it's content. We tried to emphasise the points on which we had evidence. I am grateful to all the members of the CCRI that helped pull together this feedback that we hope will be useful.

The Welsh Agricultural Policy (WAP) white paper published the 16th of December 2020 is a document to enable the Welsh Government (WG) to put forward an agricultural policy for the future. Many powers being granted, a framework on future orientations rather than precise actions. I was puzzled by the WAP as in places it still seems a bit confused in terms of what it wants to be. Caring for the environment is set to be a major goal while it still wants to be competitive on the markets in order to export (and price competitive). A willingness to evolve as a New-Zealand or Irish types exporter but with an increased environmental focus - this could be challenging. 

There is also a problem of power and funding. We have to view the WAP as a flexible baseline tool for the long-term future but the WG only holds funding from the United Kingdom (UK). There is no clear commitment regarding the amount available year after year (particularly after 2024). Without clear commitments on funding from the UK government the wishful thinking behind the WAP can well be rendered useless. In short: On wasn't supposed to look for clear answers but one could start to guess the structure of this scheme.

The WAP is said to be linked to the Environment Act from 2016 and the Well being of future generation act 2015. A consultation process took place to try to refine the WAP objectives and proposals to address a sustainable future for welsh agriculture as a whole (cf "Brexit and Our land"). Some of the thinking set out by the WG with the support of the labour administration may well have to change after the Welsh Election of May 2021.

Nota: The vision is interesting but if it is of no interest to you and you just want to know the mechanism go straight to the next title.

The UK is leaving the EU market, one of the most remunerative in the world and the biggest market close to Wales. Agricultural markets were protected at a high levels under the EU single market. The trade relationship has changed but there is still a free-trade deal which doesn’t avoid some more work for exporters and importers. And potentially some problems in the future with rule of origins and geography indicators. The trade environment with other FTA (Free Trade Agreement) for agriculture will be scrutinized by a special commission but the UK minister will hold the power. Those additional barreers to trade could potentially trigger some import substitution on some high added value sectors (dairy, hens, horticulture…).

The WG acknowledged that other FTA deals might induce additional price-based competition for welsh farmers on a the range of welsh exported productions. Stating that it would be a problem for some Welsh farms that can’t compete. Thus looking for opportunities to export and develop possibilities for welsh produces on other things than cost

Nota: Would it mean quality produces, or certifications, do they mean processed, do they think that environmentally friendly farming (correctly evidenced) will be enough to sell tons of agricultural primary produces.… There is still a lot of uncertainty in the later design about how this goal would be achieved.

Covid 19 had an impact on farming and the Welsh economy as a whole according to the WG. Mostly on the tourism side of this industry. The WG explains this impact with the GDP evolution trends and couple comments on food production and supply chain.

Nota: There is no mention of the switch in consumption patterns (local food, consumer type of meat pieces bought…).

Sustainable production of a safe and high quality food is at the top of the agenda and one of the Welsh agriculture sector strength. Most notably keeping farming standards up to the EU ones will be high on the priority list. And though Wales can never be entirely food self-sufficient a need is recognised to improve food sovereignty/autonomy. But still with the goal to put welsh food on the world's tables.

On the environment the WG states that there is a need to address the climate emergency with the fact that markets tend not take it into account (even using the term free market while such thing is a purely theoretical concept even in a liberal economy) nor individuals. There is also a willingness to deal with the biodiversity loss.

Nota: Farming CO2 emissions where not mentioned in the WAP

Other key context elements range from protecting rural communities (inc. Welsh language, the landscape they shape…), ensure public health, ensure productive and healthy animal that contribute to all the objectives.

Nota: On public health and farming there are talks about ammonia only, not a word about noise, other particles pollution, other sources of acidification…). There was not a word about current forestry practices externalities.

The summary of the impact gives an overview of the policy goal: With the delivery of the new WAP focused on it’s overarching principle of the Sustainable Land Management plenty strategic objectives will be addressed. This new WAP will include increased woodland cover, an increase in arable and horticultural production (even if it's not mentioned how this will be achieved) together with increased farm and landscape-scale habitat resilience. It will also result in changes to the way agriculture will operate, with shorter supply chains, a new emphasis on localism and better data management. Farms will have a sustainable, long term business model, taking advantage of market demand to produce the food desired by consumers but in a way that maintains delivery of the other outcomes for which the Welsh Government will provide financial support. Less obvious, farms will significantly reduce their carbon footprint as well as contributing to improved public health through the delivery of better air and water quality.

The welsh government plan to introduce new statutory requirements to every landholder. They will be closely derived from the GAEC and SMR as a basis for land management.

• P28, P31-32  General  Structure of the Sustainable Land Management Scheme:

It is the place where you will find most of the informations about the future scheme structure and clearer proposals.

The goal is to achieve a double sustainability of Welsh farms. The new scheme aims at providing an income stream to farms while also preparing them to fight in a tougher environment (both trade-wise and outside) while committing to looking after various key elements of the environment. This scheme will have two components with grants and payments based on a long term timeframe. 

Nota: Word of caution - We don't really know what the long-term timeframe would mean.

Some strong support from side-organisations and academia will be necessary to make the scheme successful as there are many assessment, data collection, plans to draw, all at an individual scale. A technological jump is implicitly expected and necessary through this scheme. Not the least because of the number of additional missions farmers will have to be in charge off.

Opinion on the proposal set-out: The scheme is commendable but the decision to separate grants and payments makes it less holistic than it could. The amount of informations, the level of details and the fact that we would be dealing with long term outcome based plans are both a blessing (stable farm support/income for a long time) and a curse (amount of checking, time to draw plans, constraints on long terms to farms with reduced agility). I can’t help but think to truly make this scheme more holistic it would have been interesting to couple grants and payments together for a more comprehensive evolution.

Nota: Good from the WG to commit to a long term timeframe for farm payments/scheme but as long as the UK doesn’t sanctify WG payments nothing is written in stone. What about the impact of inflation on such long period of time.

Besides it will become necessary to pay farmers for their stewardship of the land as a whole and not only on capital/management features. Data collection takes time.

• P35, 36, 37 Industry and Supply Chain : Impressive by it’s brevity even if it has a smaller chunk of the money than the SLM

We note that contrary to the farmers, the supply chains and markets won’t have commitments under the Sustainable Land Management, though they will have to live up to the maintained high standard for health and safety goods.

To illustrate that, the market intervention measures are copying what already exist.

Opinion: It is comforting to see them in the WAP but it is not sure that in the new trade relationship without the same trade barriers for other countries - as UK had in the EU - they will have an impact. Overall in the Industry section it felt that the design and tools were somewhat less advanced.

Personal opinion and analysis on the White Paper proposal:

« According to the consultation: Brexit and our land: funding linked to CAP has not equipped the sector to be resilient nor address te environmental challenges confronting us » WAP. A partial point of view diminishing the impact of direct payments – GAEC/SMR and agri-environmental schemes… A lot of tools used in the CAP will be found under a new disguise in the WAP. The CAP has been devolved for more than 2 decades, some EU countries have successfully managed and agro-ecological intensification. Like Ireland.

« Recognising that a thriving welsh food and drink industry can create demand for Welsh primary produce. This will be key to enabling welsh farmers to compete in international markets and putting welsh food on table accross the world. » It sounds dated. Using the vocable primary produce sounds too much like selling low valued commodities. Furthermore the welsh food and drink industry has no real differentiated product for now (the welsh lambs are loosely regulated compared to other geographic indications I worked on in France). It would require a real effort from the entire industry. On the flipside it said before that some Welsh farmers would not be able to keep up with price competition.

The use of the word "diversification" in the WAP means two very different things:

• The differentiation: Choosing one path for the farm system production rather than another.
• A diversification: Adding new/differents farm income streams which can mean taking up new activities/jobs not necessarily in the farming sector.

Do we really support is it the differentiation and farmers focusing on their farms altogether or adding new time-consuming activities not necessarily land related.

Use of the word improvement for farms to get the new farm support. This describer would gain to be replaced by evolution or preservation because not everything has to be improved and it doesn’t mean that those farms don’t need support.

The "traditional welsh family farm" is totally absent from the WAP proposal.

"Agricultural policy is concerned with the relations between agriculture, economics, and society. Land ownership and the structure of farm enterprises were traditionally regarded as primarily social problems." Brittanica Encyclopædia 2021

From this point of view we might need a broader view of the farm's ecosystem on the economical and society side to encompass the Agricultural Policy both at the Welsh scale and the Great Britain scale. The fact that the two have a same economic space thoroughly restricts the range of tool that can be used.

1. Sustainable and profitable farm businesses and farming industry: Add value, add revenue, lower costs.

1.1 A renewed focus on the possibility to better characterize, market, control and price special welsh products. Going further than a welsh flag on products to differentiate them in the eyes of the consumers.

1. Revalued upland products with tight characterization on Welsh Black Cattle - Welsh Mountain Sheep; small, rough and slow growing matching with the Mountainous/semi-Mountainous environment. Marketing and research on different test, breeding strategy. As the salt marsh lambs.
2. A wool market to redevelop, a welsh demand to support. For insulation, carpeting, insulation curtains… Target increase wool price and find a good use to the lower quality Welsh Mountain wool. Research on traditional welsh patterns for weaving.
3. Promote productions of products on which the UK market is not self-sufficient with a welsh branding and could be grown in the wet temperate climate: Horticulture, Vegetables, Fruits, honey, alcohol. High Value but high capital investment crops. Profitable on small acreage but need a long term lease agreement, stability. Including subsidies on investment. (would also trigger a landscape diversification)
4. Surf on the local food wave. Wales is close to the North-East Powerhouse (A55) and has its own metropolis in the South West.
5. Create a label based on (even) higher levels of animal welfare, linked to short transport/wait times to the abattoir/market and excellent management of quality on the farm. Subsidies on handling systems, mobile abattoirs…

This would reduce the liability of Wales to commodities market (swappable products with NZ or England …). Also reducing the liability to the sheep export market and release some valuable market share for uplands. A complementarity for a greater added value out of well recognized products and appelations.

1.2 Farmers sell perishable goods (even when they are alive) with a given quality. The Market structure is a stressful oligopoly where farmer’s weekly/daily low volume of output is vulnerable to predatory pricing from buyers:    

1. Rethink the organisation of livestock markets to operate more on bulk buying, constitute homogeneous loads of lambs for transformation and fatteners. This would prevent to have mismatched animals or smallish lots presented by farmers.

Markets are already more or less specialized, it is just taking it to a next step. This would increase the average lamb price and reduce the imbalance between producers and buyers. Separate the seller's market and buyer's market > Grading and Sorting on arrival - Digital. Maintain classic sales for breeding. Increase bulk sales/buying.

1. Rethink milk pricing with a fairer and more transparent system for every farm. The hyper-specialization has led to an opaque pricing system with contracts negociated on every farms. An hyperperishable product.
2. Develop/Support Welsh food transformation industry with new players particularly in this very concentrated industries (meat). Increase the number of buyers for Welsh Product and increase the added value produced in Wales. Grants and facilitation for small food transformers and local food sellers.

1.3 Resolve the land concentration and farm concentration dilemma in Wales vs reduction of the number of farmers :

Keep land value and FBT (Farm Business Tenancy) prices under check ? How to face the farms concentration?

1. Introduce a named land register/land access file in Wales for greater transparency.
2. Put in place a land tax paid to the acre with higher rate if you don't farm it yourself. Tax on land when it changes farmer rather than under a death duty. Favour perennity of landholding/managing.

1. Create a new FBT for longer term lease allowing to secure long term investments on farm holdings or less profitable farming systems. In FBT a need to clarify the pay-off for investment already done.
2. Offer a new joint farms partnership similar to the GAEC system in France to allow several farmer to join forces in one enterprise with a preferential business rates/a premium on subsidy/premium on investment subsidies. Branded limited partnership enterprises. Could also contribute to have more women in charge/could allow more farmers to switch to profitmaking.
3. Maintain the young entrant scheme - combined with the creation of a farm transition and investment fund with a range of missions and tools. This structure could take up the burden of bulk investing for farm projects or holdings and leasing it back to the farmer(s). In that case if the project goes void it will still have the possibility to find a new user.  This could be seen for example as a transitionary structure or a longer term move. This fund would only be allowed to invest in “essentials” items. It would create new opportunities for new entrants.

A viable tool to take over the county council farms being sold gradually. Not to waste away a valuable capital currently undersold because of the AHA locking those investments for cash-strapped County Councils. This would also resolve the problem of loan access in Wales like in the rest of the UK. These could also be done for smallholdings not deemed viable.

Policy of estate agents to split farms is accelerating farm amalgamation and increasing the land price rise.

1. On business investment grants a need to rethink targeting and attribution: Machinery wise only key machinery would have to be part of the bids (hay kits, cattle trailers – who really needs its own jet-grounding machine). The investments musn’t have a lower threshold but must have a cap (per family worker). Potential for lease by the WG for use of it by farmer.

1. Enhance and maintain wales environmental/historical capital on farms:

An environmental capital scheme that needs to be fairer and accessible to everyone and get away from the existing farm habitats: An evolutionary process to construct on the long time

2.1 A need for a gradual transition out of the direct payments of the CAP to minimize a competitive squeeze effect in human resources among which is likely to accelerate the moves towards even less flexible and lower added-value farming systems. A potential reduction in farms numbers would be associated and given the current farming environment would be unlikely to reappear.

What do we need to take into account?

1. A fair evolution in the payments/actual constraints ratio if linked to the habitat or a landscape type. A rarity based payment on some options could ensure that some are not overpriced (or overlooked by farmers). An element of yield management. With the difficulty to price items in a scheme the possibility to have a biding process for options and capital items.
2. A need for a number of workers based approach to subsidies, or number of family worker. It would mitigate the need to cap subsidies and allow a minimum payment in the schem.
3. Future schemes recognizing the fact that farmers plan their system on a lifetime basis and offering smooth transition and very long term planning and budgeting. (i-e to facilitate the uptake of binding options as Forestry…)
4. A greater need for farmers and local communities to feel involved in the planning of conservation/improving their environmental capital. A level of local arbitration – delegation could be put together.  Today rural communities (that tend not to vote labour) feel powerless in the decision making process.

This amount of local delegation (sub-county or municipality level) for example with a facilitator would be appreciated.

• Dealing with the resolution of conflicts between farming system and agri-environment scheme contracts.
• A facilitator to guide the local community through the choice of evolution for a common change in the landscape and helping with agreements.
• Some elements of self-monitoring (photos, water stream tests, soil testing, flower counts, 2 person checks…).

What kind of option offer?

1. An entry scheme maintenance without lower threshold but a cap worker looking at landscape quality and carbon storage mainly easily accessible with a flatrate year on year payment. Payment on rarity and need to evolve:
   • Give access to the land through paths
   • Permanent pasture payments (C Storage). Diverse grassland payment (not meadow or rich, just diverse to get away from the Ray-Gras and Clover) (Landscape, C Storage)…
   • No-till farming payment - where adequate (C Storage, C emissions)
   • The amount of artificial fertilizer spread and bought-in feed used (C emissions, Environmental damage). Environmental – favouring autonomous economical farming systems)
2. An advanced payment for a transition period towards environmental outcomes and then a switch to a maintenance program. Counselling, facilitators - land type and amount vs livestock type and outputs vs input used for land management vs income. A very complicated equation to solve that needs a level of individual thinking using flexible tools. Drive farms towards more autonomous farms that also embrace carbon emissions reduction as well as sequestration.
3. Organic subsidies construction is deemed good but a gradual reduction for high sized farms or high stocking density farms (in terms of LFU/ha or output/ha) might be adding a level of transparency vs the aspiration of the public towards this farming models.
4. Advanced options on the management of marginal parts (unimproved land) of the landscapes should be maintained but with caps per family worker. On management a year on year review of these habitats should help to taylor the grazing needs (time, type of animal, stocking density) more accurately to access outcomes. Facilitators would play a big part in it.  
5. A environment upgrading element through capital grants could be envisaged to improve the local environment:
   • Hedge, tree planting, drystones walls, tracks (it then avoids compaction or poaching)…
   • The transformation of lowland productive parts of the landscape in alternatively productive land; hay meadows, orchards meadows, creation of water elements, agro-forestry… This should be favored as opposed to forestry as they still offer a regular (not in 30-50-100 years) income out of subsidies.
   • Upgrade the farm building for landscape purpose and improving environmental compliance.

This focus on the farm workers could mean that the contribution of women in agriculture would be more acknowledged.

1. All wales sustainability farming sector: Frugality

Reduce input use to accompany the Wales wide transition towards more sustainable farming:

3.1 Promote the development of mixed autonomous farms by removing some barreers

1. Supporting diversifications in renewables to drive the energy transition, bridge today's problem faced around land control via co-enterprises. Secured loans with reduced mortgage or rents for use of the land being offered. Water storage facilities for ecological energy storage.
2. Trigger a new thinking on tree planting and what transformation industry is needed.
3. Access to capital to invest into the farming activity: Interviews show that it is relatively easy to get a loan for a Dairy or Poultry/Hens/Pork project owing to the good market prospects. But it is not the case for Beef and Sheep farming. Returns are often seen as too low and investments unsustainable, by lenders. Another issue is the mortgage or at least the amount of capital that farmers already have. Banks definitely base the farms’ overdraft and the loan offer (and interest rates)  on this criterion. For example, the amount of subsidy received is also taken into account, so larger acreage farms are seen as offering more security against which a loan can be agreed. 

Even today when interest rates have never been lower for such a sustained period, only certain farm types have access to these loans - specialized. In the past, subsidized loans existed in the 1960s-1980s to help farmers to invest. Mostly these reduced (part of) the interest payments on the loan (UK).

Those facilitated loans should be directed towards sustainable investments on farms and linked to a clear business plan.

3.2 An ecological and environmental intensifications of farms to leave more room for conservation and reduce inputs/imports consumption

1. Support the development of a greater autonomy of farming systems. Grow more cereals on farms and avoid if sensible/possible grass on grass - import less. Grow more protein plants producing plant in Wales to import less (Kale and Rape / Oilseed rape/ Mustards…). (In no-till where adequate)
2. Support grass based input frugal farming system in Dairy, Beef and Sheep industry. A need to develop more efficient grazing practices for the use of existing grass (that could allow for more room for conservation).

Combined with greater diversity in Pastures and an increased number of permanent pastures. Development of Agro-forestry.

1. In France machinery rings have been hugely subsidized by the EU. These allow farmers to rent the machinery only for the time they need it. As with contractors, it can be challenging to provide for everyone on time, at critical periods during the year. But it allows farmers to do the work themselves while not owning the machinery, meaning that a small holding with only 1 farmer can do everything on their farm. In Wales I have seen several machinery rings but the distance to them can be a problem, as well as gathering the number of people willing to take part in them, to make them viable. It would allow more specific/specialized tools to be acquired if needed for some production.

In a farm with diversified crops it might be challenging to have a contractor come for small acreage.

Toolbox Agricultural Policy not used yet:

- Tax on artificial fertiliser as it is a derivative from fossil fuels.

- Possible scheme on rural housing subsidising; housing refit in rural areas (studios, small houses) in disused former faming buildings if they are used on non holiday let. Cap on the maximum. possible number of housing claimed. Could also help reach carbon neutrality in rural areas.

- Dispute resolution and sharing mechanism on electricity production schemes.

Théo Lenormand

03/2021