With the new government set to deliver its first budget on October 30, NFU Cymru has written to the Chancellor of the Exchequer, Rachel Reeves and all Welsh MPs ahead of the autumn statement making the case for a ring-fenced, multi-annual UK agricultural support budget which has been adjusted for inflation. 

In addition to this the union took the opportunity to raise concerns about any potential changes to Agricultural Propery Relief, pointing out that removing or changing this vital relief from inheritance tax would have a highly detrimental impact on family farming businesses leading to significant restructuring within the sector.  

The union set out its long-held view that a strong primary production base is of huge strategic and economic importance, something which is borne out by the fact that in Wales alone the food and drink sector has now grown to reach a turnover of £9.3 billion, whilst employing 228,500 people, the equivalent of 17 per cent of Wales’ total workforce.

With farmers facing challenges on so many fronts including weather events, high input costs, marketplace volatility, animal disease together with policy and regulatory issues, we made the case that that in order to give farmers confidence in their business in the short to medium term, the number one priority has to be the setting of an adequate, ring-fenced multi-annual agricultural budget for the duration of this parliament.

Our correspondence also explained that the level at which agricultural support was set in the last Westminster parliament derived from an EU budget, which was set at the end of 2013, ahead of the 2014-2020 Common Agricultural Policy period. This 2013 budgetary baseline is therefore very much in ‘the rear-view mirror’ with its real terms value having been steadily eroded by inflation, particularly over the last two and a half years, which have of course seen very high rates of agricultural inflation.

Adjusting for this inflation, reflecting the challenges the sector faces as well as the scale of the ambition NFU Cymru and Welsh Government have for the sector, brings the union to the view that a ring-fenced, uplifted, multi- annual UK agricultural support budget of £5.6 billion per annum is now needed.  Based on historical agricultural funding allocations within the UK home nations, this will give Wales a pro-rata allocation of just over £500m each year.

This forthcoming budget will be critical to Welsh agriculture and NFU Cymru will continue to make the case for an adequate agricultural support budget and why there should not be any changes to agricultural property relief. We do however know that MPs are often more responsive to communications they receive from their constituents on various issues, and I would therefore urge you to contact your MP directly on these issues between now and the end of the month in order to help NFU Cymru’s efforts to secure an adequate budget and to resist any changes to the inheritance tax treatment of agriculture.

To read the full letter please visit the NFU Cymru website.