What the Welsh draft budget 2025-26 means for the rural economy
Finance Minister Mark Drakeford delivered the Welsh Government's draft budget for 2025-26 in the Senedd on Tuesday, but what does it promise for the rural agenda?
Finance Minister Mark Drakeford delivered the Welsh Government's draft budget for 2025-26 in the Senedd on Tuesday, outlining measures to address Wales' economic, social, and environmental challenges. For the rural economy, the announcement was welcomed as a step towards providing stability for farmers and rural communities amidst ongoing changes in agricultural policy and funding structures.
The draft budget for rural affairs and agriculture
Increased departmental funding:
- An additional £36.35m in revenue funding (a 6.6% increase).
- An extra £71.95m in capital funding (a 31% rise).
- The total departmental budget now stands at £482.5m, returning to 2023 levels after earlier reductions.
Basic Payment Scheme (BPS):
- The government has committed to maintaining the BPS ceiling at £238m for 2025.
- This move aims to provide financial stability for farmers as they transition to the Sustainable Farming Scheme.
Rural investment:
- A further £5.5m in resource funding and £14m in capital funding were allocated for broader rural development initiatives.
Sustainable Farming Scheme support:
- While the details of future funding under this scheme remain under scrutiny, the Farmers' Union of Wales and other stakeholders emphasise the need to match or exceed the historical funding provided through European programmes, estimated at £337m per year.
Victoria Bond, Director of CLA Cymru, welcomed the draft budget’s support for rural communities, noting the importance of stability during this period of transition. She said:
This draft budget represents a step forward in securing the future of Wales’ rural economy. With the retention of the BPS ceiling and increased capital funding, it is clear that the government recognises the importance of family farms, tourism, and other rural businesses. However, we must ensure that the final budget matches the scale of ambition needed to unlock the full potential of our rural areas. We’ll continue engaging with members and decision-makers to advocate for sustainable growth across the sector.
What is next for the draft budget?
It is now open to scrutiny by the Senedd’s committees and will undergo further debate and revisions. The final budget is expected to be signed off in March 2025, ahead of the financial year beginning in April.
Key areas of focus for CLA Cymru and other stakeholders during this period will include:
- Ensuring sufficient funding for the Sustainable Farming Scheme to maintain parity with historic EU support levels.
- Advocating for continued investment in rural infrastructure and green growth initiatives.
- Working collaboratively to address any potential shortfalls in allocations compared to previous European funding frameworks.
The draft budget signals progress for rural Wales, with notable increases in funding for agriculture and related sectors. However, it remains vital that the finalised budget provides the level of support needed to ensure rural communities thrive in the face of economic and environmental challenges. CLA Cymru will remain at the forefront of these discussions, championing the interests of its members and the broader rural economy.
