A Welsh MP has suggested cash currently given to dairy and beef farmers could be redirected to sheep farmers if the UK were to leave the EU with no trade deal.
David TC Davies, who represents Monmouth, made the remarks during a Welsh Affairs Committee hearing this week.
Studies have shown producer prices in the dairy industry would increase by 30 per cent if the UK fell back on to World Trade Organisation (WTO) rules, with beef farmers seeing a 17 per cent boost.
But for net exporting sectors such as sheep, which Wales is heavily dependent upon, farmers could see a 30 per cent drop in prices.
Mr Davies said: “There is potential for beef and dairy and pig farmers to be better off under this scenario because we are quite dependent on imports from those countries and they would have to pay a tariff.
“The issue we have to look at is sheep farmers, especially hill farmers.
“Given the fact a large proportion of their income is coming from subsidies, it surely should be possible to maintain or possibly even increase those subsidies, perhaps at the expense of sectors which have profited from a WTO scenario, to ensure incomes do not fall.
“It would be perfectly easy and reasonable to do this.”
But David Swales, head of strategic insight at the Agriculture and Horticulture Development Board (AHDB), disagreed.
He said: “It would be very difficult to ringfence money for particular sectors.
“It may be possible to ringfence particular geographies, but doing this on a sectoral basis I think would be quite a challenging thing to do with regard to WTO rules.
“Although we have left the rule book of the EU behind, there are rules around how we govern and set up our agricultural policy which are set by the WTO.”