Dazzling market prices shouldn’t let us blink at what lies ahead
Fraser McAuley, CLA Cymru’s Senior Policy Advisor acknowledges today’s strong market for livestock, but Welsh farmers need to be aware of great change ahead – and the Welsh Government needs to manage a smooth transition for everybody’s benefit.
Lamb and beef prices are performing well: many farmers are happy with what they are receiving for their high-quality livestock, but it should not distract from the big changes to the Basic Payment Scheme (BPS) and Glastir that are on the horizon.
Beef prices are currently in a good position with recent prices hitting the £4 per kilo, and lamb prices are holding-up well currently at £0.91 per kilo above the five-year average. Two reasons explain this, firstly there has been strong domestic demand and continued easing of Covid restrictions has reopened the hospitality sector this summer. Visitors and Welsh people alike are enjoying a meal out. The second reason boils down to the changes to normal trading patterns both due to our departure from the European Union and the pandemic. A suppression in supply-levels ahead of the Brexit deadline sustained prices for local producers in Wales.
This welcome and positive news should not distract us from the importance of the fundamental changes in farming policy coming-in soon. As it stands BPS will operate in the same way for 2021 and 2022 (subject to financial agreements from UK Treasury) - a position we at CLA Cymru had lobbied for to give farmers and landowners some certainty. What happens after that is somewhat opaque, to say the least.
Following last week’s Senedd elections, we have welcomed Lesley Griffiths MS back as Minister for Rural Affairs. Her colleague, Julie James MS is leading a new Ministry for Climate Change including picking-up the environment brief. We really need Welsh Government to put the rocket-boosters on their policy development work to get the Sustainable Farming Scheme up and running for 2024. In order to do this, we must understand how the farming sector’s delivery of public good will serve both Minister’s ambitions – and fit with the work of the new Economy Minister, Vaughan Gething MS.
In practical terms, we need to see some piloting of the new scheme and an indication of how the transition to the new world of Sustainable Land Management will work. There is also significant concern from farmers about the future of Glastir. Yes, many have been offered extensions until the end of the year, but business decisions - such as whether to stay organic or not - need careful consideration, and an announcement on Glastir after 2021 is essential for many in farmers across the country.
Although farmers are rightly feeling positive about the great livestock they breed and finish in Wales, there are other areas of concern that short-term higher-prices may not be able to help with. Wales-wide agricultural pollution regulations have already started to be introduced and more changes that are significant are due in 2023 and 2024. These regulations could increase costs for many farmers and there is only limited capital support available from Welsh Government.
In the short term although, hopefully, prices will hopefully hold-up, we really need all those in Welsh Government to get going on the future policy and for farmers and rural businesses to not allow high prices distract them from future changes.