Farmers in Scotland can expect to receive a cash injection under the terms of the Bew Review, published today (September 6), but the Farmers’ Union of Wales has warned the move could put Scottish producers at an advantage and distort the market.
The UK Government has accepted the recommendation of Lord Bew to increase agriculture funding for the period 2020-22, with £56.59 million of ‘new money’ allocated by the Treasury.
Scotland is to receive £51.4 million of the additional funding, on top of the £160 million already granted in the Chancellor’s Spending Review to ‘address the historic injustice’ of convergence cash misallocation, while Wales will get an extra £5.19 million.
Budgets for England and Northern Ireland over the same period will be maintained at current levels.
The UK Government has also agreed to divide convergence funding for 2020-22 according to land across the UK which has previously received less Common Agricultural Policy (CAP) funding per hectare than the UK average, tilting Pillar 1 support in future towards the uplands.
But FUW president Glyn Roberts said the one-off payment to Scotland and the reallocation of funding was not fair and could have ‘adverse effects’ on Welsh farmers and the sectors which rely on them.
"Giving Scotland an extra £160 million could cause market distortion on an unprecedented scale and is extremely unfair on Welsh farmers," said Mr Roberts.
“In 2017 Scottish farm businesses received an average Pillar 1 payment of £23,971, which was more than 30 per cent higher than the UK average of £18,306, and 65 per cent higher than the Welsh average of £14,568.
“As such, this reallocation of funding, which reduces average Welsh payments, is likely to exacerbate differences between farm businesses in different nations which must compete in the same marketplace."
Mr Roberts said while 85 per cent of Scotland’s land was Less Favoured Area (LFA), it received targeted support through the CAP, which Wales did not, despite 80 per per cent of land being LFA.
Defra confirmed the £160m would be given as a one-off lump sum payment in 2020/21 and will be ring-fenced to ensure it reaches eligible farmers and land managers.
Organisations including NFU Scotland, the National Sheep Association in Scotland and the Scottish Association of Meat Wholesalers welcomed the move, adding it brought a welcome boost at such an uncertain time.
Meeting with Prime Minister Boris Johnson on his visit to a farm in Aberdeenshire today (September 6), NFUS president Andrew McCornick said: "Settling the issue around convergence comes at a time when we are weathering a political storm and many sectors of Scottish farming and crofting are enduring significant price and cost pressure.
"We want our industry to come out the other side of the current turmoil and this huge uplift in funding will help us build greater resilience into our farming and food sectors.”
As part of his review, Lord Bew also recommended Governments across the whole UK recognise the value of farming by ‘protecting, if not enhancing’ future agriculture funding, particularly in the context of Brexit uncertainty, adding all four administrations should collectively agree principles for allocation of cash after 2022.
Speaking to farming journalists at Defra headquarters in London today (September 6) Defra Secretary Theresa Villiers said she was aware of the FUW’s fears over market distortion and said she would be engaging with Scottish Ministers ’to minimise problems of that nature’.
Ahead of a meeting of devolved government Ministers on Monday, she said: "There is a separate question about the differences in farm support we will have after EU exit. There is a case for the UK Government and devolved nations to try and work together closely to deliver some common themes in terms of approach to farm support.
"In putting those support schemes together we would want to avoid unnecessary competitive distortions as well."
Asked about concerns lowland farmers may be penalised if more money is pushed to the uplands, Ms Villiers said Lord Bew had highlighted particular challenges upland producers faced, but that ’does not mean that we are failing to take seriously the needs and concerns of the rest of the farming sector’.