70.Although the exact design of future agricultural policy for Wales will largely be a matter for the Welsh Government, subject to any common frameworks which are agreed between the UK and Welsh Governments, over the course of our inquiry we have heard a number of suggestions for how future agricultural policy could aim to support the Welsh red meat farming sector. Below, we consider how some of these could be supported by the UK Government, in collaboration with the Welsh Government, to help Welsh agriculture thrive post-Brexit.
71.We have heard that there has been a decline in the productivity of the Welsh agricultural sector, and that if this continues it could risk exporting domestic production to countries with lower standards, and also mean that the supply chains which rely on agricultural produce would no longer be sustainable. In light of this, once the UK has left the EU there will be a need for Wales to pursue greater innovation and productivity, so that Welsh agriculture is competitive both domestically and in new international markets. We heard that this might be achieved by increasing shelf life, exporting individual cuts rather than whole carcasses, marketing offal in the Far-East, and increasing the live-weight of livestock. We also heard that Welsh farmers could work more collaboratively with New Zealand exporters to complement contrasting seasonality.
72.Extending the shelf life of Welsh lamb could be particularly significant in expanding the markets to which it could be exported. Gwyn Howells, Chief Executive of Hybu Cig Cymru, emphasised that the average shelf life of lamb bred in the UK was approximately 30 days whereas New Zealand lamb has a shelf life averaging 70 days. This reduces costs to New Zealand’s exporters and makes the product more commercially attractive. The Welsh Government Cabinet Secretary told us that there was a lot we could learn from how other countries do things, and said that she had asked officials to look at what could be learned from other countries about increasing shelf life.
73.However, we heard that increasing shelf life can only be achieved by implementing reforms across the supply chain which relate to aspects of both cleanliness and slaughter. Glyn Roberts, President of the Farmers Union of Wales, told us that the average farm in New Zealand had possibly 2,000 to 3,000 sheep, where the average in Wales is about 70 sheep, and also said that having fewer sheep on each individual farm meant better animal welfare.
74.The UK Government has been clear that, post-Brexit, it intends to pursue an ambitious free trade agenda and agree new trade deals with a range of non-EU nations. Several of our witnesses recognised opportunities for Welsh agriculture in securing trade agreements between the UK and non-EU nations. We were told that opening new markets and achieving trade deals that will allow for the large-scale export of produce—be they comprehensive free trade arrangements or agreements specific to certain sectors—could take as long as a decade. We heard that accessing new markets will require leadership, prioritisation, and the investment of time from senior Government figures. It was therefore welcome when the Secretary of State for Wales, Rt Hon Alun Cairns MP, told us that he had already begun working with the industry and Cabinet colleagues to identify non-European markets and remove barriers to trade.
75.If opening up the UK to new international markets is to benefit Wales, much greater emphasis will need to be placed on the marketing and promotion of Welsh produce, as it becomes established in world-wide markets. We heard that the potentially lucrative Chinese and US markets remain relatively untapped for many Welsh products. We are, therefore, concerned at the very limited resources available to promote Welsh produce in new markets. It is also not clear what role the UK Government intends to play in promoting Welsh produce in new markets.
76.Welsh agriculture requires an ongoing supply of suitably skilled workers both within the industry and the wider supply chain. We heard that many parts of the agricultural supply chain are heavily reliant on migrant workers from the EU, and were also told that a downturn in recruitment has already affected abattoirs in Wales. One possible solution to this post-Brexit is the reintroduction of a Seasonal Agricultural Workers Scheme—which would enable migrant workers, who would not qualify for a skilled work visa, to travel to the UK specifically to work in the agricultural sector during periods of peak demand. The Welsh Government’s Cabinet Secretary told us that 100% of the vets who work in the Food Standards Agency—which is responsible for food safety and food hygiene across the UK—are EU graduates, and that in abattoirs and meat processing plants around 80% of the workforce could be EU nationals. Furthermore, we heard that the demand for labour in agriculture and the associated supply chain is often on a seasonal basis as opposed to year-round employment, which made it more difficult to recruit local workers, who were looking for employment all year round.
77.Many parts of the agricultural supply chain are heavily reliant on migrant workers from the EU, who are willing to work long hours for relatively low wages. We accept that the UK’s withdrawal from the EU means that, in the future, different immigration arrangements will apply to EU citizens. If the UK’s exit from the EU were to lead to a collapse in the supply of suitable workers willing to participate in physically demanding seasonal work this would increase costs for the agricultural sector and, ultimately, consumers. Such a situation must not be allowed to happen.
78.Post-Brexit, Welsh agriculture will need to pursue greater innovation and productivity to ensure that Wales is competitive both domestically and in new international markets. It will also be necessary to ensure that the sector has access to the labour it requires, and that future trade agreements secure access to markets which provide the greatest opportunities to Wales. We believe that the UK Government has an important role in supporting this work.
79.In light of the suggestions we have heard about how Welsh agriculture can be supported post-Brexit, we recommend that the UK Government, working in collaboration with the Welsh Government, bring forward a strategy setting out how it will support and promote Welsh agriculture—and particularly the red meat sector—once the UK has left the EU. This should cover:
80.While several of our witnesses recognised opportunities for Welsh agriculture in securing trade agreements between the UK and non-EU nations, we have also heard concerns about risks which could result from these, if not done properly. Glyn Roberts, President of the Farmers Union of Wales, told us that any new trade agreements should ensure that imports are on a par with domestic produce, arguing that it is “not fair to import a lower standard on our red meat”. Asked which foreign importers presented the biggest threat to Welsh agriculture, Cennydd Jones, Senior Member of the Year at YFC Wales, told us that New Zealand was the biggest threat in terms of flooding the UK market with lamb, while the US was the greatest threat when it came to undermining and undercutting Welsh agriculture as a whole.
81.We heard evidence that some countries with which Welsh farmers may have to compete in the future will often encourage very large herds and intensive farming processes which can undermine the welfare of animals. In addition, agricultural produce from other countries can include hormone-treated beef and chlorine-washed chicken. We have heard that allowing imports of agricultural produce which does not meet the UK’s high standards would create a significant risk of domestic production being undermined by imports from countries with standards far below those on Welsh farms. This was highlighted by the Welsh Government Cabinet Secretary, who told us that she did not want to see “Welsh food and drink producers, our agricultural sector, to be competing with countries with much lower standards than ours”. The UK Government has also highlighted high standards and animal welfare as priorities for future agricultural policy for England, and in March 2018 the Prime Minister said that she fully expected that “our standards will remain at least as high as the EU’s”.
82.We heard particular concerns that Welsh agriculture might not be a priority for the UK Government in negotiating future trade agreements, which we were told could affect not just Welsh agriculture but rural communities as a whole. We found no desire within Wales to lower standards and we do not believe that this would be the correct response to the challenges of Brexit.
83.As the UK Government pursues new trade agreements, it must not trade away the interests of Welsh agriculture. Trade deals which expose Wales to cheap agricultural goods—not produced in line with the high standards of domestic produce—in order to gain preferential access for sectors such as financial services will represent a bad deal for Wales, and must not be pursued. It would also be unacceptable if any future trade agreements resulted in Welsh producers having to compete on an unfair playing field with imports that do not meet the UK’s world-leading animal welfare and environmental standards. When securing new trade agreements the Government must not tolerate lower environmental and welfare standards for food imported into the UK, than food which is produced within the UK.
84.Hybu Cig Cymru (HCC), the body responsible for the promotion and development of the Welsh meat industry, is funded by the red meat levy, which is “raised on all cattle, sheep and pigs slaughtered in Wales or exported live” and jointly paid by producers, slaughterers and exporters. There is a long-standing inequity in the way HCC is funded. Under the existing system receipts from Welsh animals slaughtered in England are not reinvested in the Welsh industry, but are instead collected by the Agriculture and Horticulture Development Board the UK-wide body funded by levy proceeds from England (and for some products Great Britain or the UK). A 2014 study published by HCC showed that over 70% of Welsh cattle were slaughtered in England so this arrangement represents a significant loss to the Welsh industry. In 2015 the Government said that it would consult on this issue, but nothing was done as a result.
85.When we put this to the Minister for Agriculture, he recognised that there was an issue with the red meat levy in relation to animals which crossed the border, and told us that “we probably need to look at how the levy is collected and consider possible alternatives”. That said, the Minister noted that the Agriculture and Horticulture Development Board, spent about £7 million a year on UK-wide work, and said there would be a need to factor this in to any alternative arrangements.
86.We do not believe that the way in which the red meat levy operates provides Hybu Cig Cymru with sufficient resource to market and promote Welsh red meat in the way which will be required for the sector to make a success of Brexit. There is a particular unfairness that levy-proceeds from animals raised in Wales but slaughtered in England go to the UK levy body, and not the HCC. This issue has required resolution for too long—the Government said it would consult on this in 2015, but took no action—and we are disappointed by the lack of urgency with which UK ministers have approached this issue. It now threatens to be a serious impediment to the effective promotion of Welsh meat post-Brexit, when Welsh produce will need to be promoted in new markets. We recommend that the UK Government overhauls the complex framework underpinning the red meat levy so that the value accrued from the slaughter of animals reared in Wales is reinvested in the promotion of Welsh produce. We expect this problem to be resolved before the UK exits the EU, and recommend that any legislative changes which are necessary to achieving this should be included in the forthcoming Agriculture Bill.
87.We heard that public procurement of food—and the failure by public authorities to source local produce—has been a cause of frustration for domestic producers, who see that large-scale purchasers, such as hospitals, school catering services and the armed forces, have not always had the ability to favour British produce. Huw Thomas, Political Adviser at NFU Cymru, told us that the move to greater use of domestic product in public procurement contracts was “a potential Brexit dividend”. It is reassuring, therefore, that the Secretary of State for Environment, Food and Rural Affairs, Rt Hon Michael Gove MP, has acknowledged that the UK Government “can still do more to improve the procurement of British food across the public sector”. Our witnesses suggested that some mechanisms already exist to shape public procurement to encourage the purchase of local produce. The Minister for Agriculture told us that the UK Government had been successful at increasing the amount of British food being sourced by Government Departments, and said that similar action in relation to Welsh public bodies was a matter for the Welsh Government.
88.We heard encouraging evidence that public procurement can be better used to encourage the purchase of local produce, and post-Brexit there may be opportunities for increasing the flexibility of public bodies to procure local produce. The UK Government should seek to maximise these opportunities, and we recommend that, by the end of the year, the UK Government publish an action plan which details how it intends to increase the procurement of domestic produce by public bodies. As part of this action plan the UK Government, in conjunction with the devolved Governments, should provide public bodies with guidance outlining how, within existing rules, they can support the procurement of locally produced food. We also urge the Secretary of State for Wales to work with his Cabinet colleagues to explore how major public purchasers of food, such as the NHS and the armed forces, can be supported in procuring local produce.
108 Q105 [Dr Fenwick]
109 Q105 [Glyn Roberts]
110 Q106, Q203, Q208, Q209
113 Q203, Q205
115 Department for International Trade, , Cm 9470, October 2017
116 Q514 [Jacob Anthony], Q182 [David Swales]
117 Q207 [David Swales], Q219 [Gwyn Howells]
118 Q220 [Gwyn Howells]
119 Qs80–81, Responsibilities of the Secretary of State for Wales, , HC 680
120 Q208, Q218
121 Q241 [Gwyn Howells]
124 Q514 [Jacob Anthony], Q182 [David Swales]
125 Q522 [Cennydd Jones]
128 Q99 [Glyn Roberts], Q225 [David Swales]
129 Q225 [David Swales]
130 Q225 [David Swales], Q504 [Cennydd Jones]
132 Department for Environment, Food and Rural Affairs, , Cm 9577, February 2018
133 Prime Minister’s Office, , 2 March 2018
134 Q507 [Cennydd Jones], Q508 [Laura Elliott]
135 Hybu Cig Cymru, ‘’, accessed 15 March 2018
136 Hybu Cig Cymru, ‘’, accessed 15 March 2018
137 Hybu Cig Cymru, ‘’, September 2014, paras 122–123
138 HC Deb, 29 January 2014, [Commons written answer]
141 Q131 [John Davies]
143 Department for Environment, Food and Rural Affairs, ‘’, 5 January 2018
144 Q229 [Gwyn Howells]
Published: 9 July 2018