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Welsh farmers must face up to Brexit challenges

Livestock and arable farming in Wales could both be under threat if Brexit brings a bad deal for the livestock industry, with the small amount of arable farms dependent on the feed markets.

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Welsh farmers must face up to #Brexit challenges

And while the arable sector was less exposed due to a lower level of exports, the iconic Welsh lamb industry faced the biggest challenges, according to the latest Horizon report from AHDB, released in conjunction with Welsh meat promotion agency Hybu Cig Cymru (HCC).

 

The Welsh lamb industry was most under threat from changes in trade policy, due to a reliance on exports, although the farming industry as a whole was less exposed compared to the rest of the UK due to a lower level of exports.

 

But Wales was more under threat from any reduction in support as it contributed a higher proportion of farm business income.


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David Swales, AHDB head of strategic insight, said: “While we do not know all the details, we would rather farmers and growers start to prepare now based on the information we have at present.”

 

He added this would allow industry to avoid the ‘wait-and-see approach, which we believe is high risk’.

 

HCC industry development and relations manager John Richards said it was important businesses took steps to assess the possible impact on their sector and begin to plan accordingly through benchmarking and other tools.

 

He said: “It is not easy to plan when we do not know the final outcome, but knowing their costs and maximising efficiency is something farmers can do straight away which is certain to help.”

Trade

 

WALES was a net exporter of lamb, with 35 per cent exported outside the UK and 90 per cent of this going to the European Union.

 

And the biggest concern was with carcase balance, with 40 per cent of lamb bought in the UK leg joints. Other member states have a preference for the loin and shoulder, complementing UK consumer demand.

 

However, Wales was a net importer of pork, beef and dairy products, which could open opportunities for import substitution if it became more difficult to import from the EU.

 

For potatoes, there were also opportunities in displacing imports of processed products, such as frozen chips, although there were challenges if the UK lost preferential market access to non-EU countries for seed exports secured in EU agreements.

Support

 

SUPPORT was proportionately more important to Wales than the rest of the UK for grazing livestock, outside the dairy sector.

 

And recent market volatility meant direct payments were ‘as important as ever’ in helping to compensate for potential market failure.

 

While it was not clear how agricultural support would change post-Brexit, there was likely to be much more scrutiny and support payments were important to maintain farm business incomes for many businesses.

 

Labour

 

MIGRANT labour was generally less important in Welsh agriculture, with labour-intensive industries such as horticulture making up a low proportion of agricultural output.

 

But the impact would be felt further down the supply chain, for example in abattoirs and meat-processing plants, which could put Welsh processing facilities at risk.

 

And 80 per cent of the vets in Welsh abattoirs were from the EU.

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