We recently emphasised the importance of maintaining agricultural support to the rural economy and agricultural production and published a report highlighting the role of direct support to Wales’ livestock supply chains, writes FUW Brecon and Radnor Executive Officer Kath Shaw.

The report, entitled ‘The role of farm support in Wales’ livestock supply chains’ uses five years of Welsh Farm Business Survey figures to investigate what increases in profits or reductions in selected input costs would be needed to maintain average livestock farm profits if direct support was cut by 50 per cent and 100 per cent.

Wales has already lost more than £200 million as a result of UK Treasury cuts to our agriculture budget, and the Welsh Government has recently cut this year’s rural affairs budget by a further £37 million.

This means there will be less money not only for farms, but also for the tens of thousands of Welsh non-farming businesses that provide services and goods to our farms.

It is essential for politicians and policy makers to fully understand the economic role played by farm support in supply chains and the dangers of cuts and changes proposed by some, especially as few analyses have been undertaken by governments ahead of proposing or implementing policy changes.

We calculate that without direct support, expenditure by Welsh livestock farms would be vulnerable to cuts of £38.87 million for feed, £12.15 million for veterinary treatments and medicines, £9.83 million for paid labour, £10.56 million for contracting and £26.34 million for fuel and repairs.

Such figures are estimated by reducing expenditure in each of the farm business survey expenditure categories by a fixed percentage in order to ‘balance the books’. But in reality farms would decide to focus cuts in some areas more than others based upon business decisions. That means the cuts in receipts for some kinds of non-farming businesses could be far higher in such a scenario.

Any cuts, however large, will have a knock on effect on many Welsh non-farming businesses, and in the worst case scenario some non-farming business sectors would lose tens of millions in income, with inevitable impacts for business viability and employment.

We naturally hope that budgets and policies would never be changed in a way that resulted in such horrendous impacts for our farms and those who rely on them, but we are all aware of the pressures to make sweeping changes.

The Welsh Government needs to ensure its design and implementation of the new Sustainable Farming Scheme is thoroughly investigated in terms of the type of impacts revealed in our report and takes our concerns and proposals into account.