How can farmers go ‘Green’ if they are in the ‘Red’?
Following Brexit and the introduction of the UK Domestic Agricultural Policy, the UK farming sector faces substantial uncertainty. This blog explores some economic, social, and environmental impacts of these changes in Wales, with a particular emphasis on the emerging issue of poverty among farming households.
Post-Brexit agriculture policy is creating significant economic uncertainties for many UK farmers. Increasing governmental pressures to meet international and national environmental sustainability goals, such as achieving net zero, are driving transformational changes in the industry. These policy shifts are leading to growing discontent among some farmers, resulting in changes to farming practices, concerns over the economic viability of their businesses, and an increase in bureaucratic red tape. Welsh farmers are joining their Dutch, French, and German counterparts in expressing their concerns through farm protests.
Post-Brexit Farming in Wales
The phase-out of the EU’s Basic Payment Scheme, a major contributor to farm incomes and a stabilising factor for uncertain markets for agricultural products, poses a significant threat to the financial stability of Welsh farmers. Such subsidies, in some cases, accounted for up to 90% of a farmer’s annual Farm Business Income. The Welsh Government’s new Habitat Scheme aims to support famers to use sustainable land management practices. However, take-up has been low due to limited payments per hectare and the significant impacts on land management and potential farm productivity.
Similar to farming policy in England, the Sustainable Farming Scheme is set to be introduced in 2026 in Wales, replacing the EU Basic Payment Scheme (BPS). The Sustainable Farming Scheme will continue the voluntary scheme already in place, becoming the main source of government support for farmers and a central pillar of support for mainstream Welsh farms and, as the name suggests, aims to promote ‘sustainable’ farming practices through the allocation of this subsidy. However, the future level of financial support under this scheme is uncertain.
There is concern that the transition to new schemes replacing BPS could exacerbate rural poverty and hardship among farming households. This could lead to a loss of farmers from the sector, and potentially a loss of necessary land management skills needed to face the challenges ahead.
Farming and net zero in Wales
The Sustainable Farming Scheme will help the UK Government meet its broader environmental plans of reaching net zero by 2050. Indeed, different approaches to reaching net zero are being proposed. However, there are legitimate (in our view) concerns over net zero plans and the impacts to the farming industry. Some of these concerns have formed the basis of the Welsh farmer protests. Indeed, an increasing number of farms in Wales have been purchased by companies seeking to offset their carbon emissions through tree planting. Such initiatives have promoted farming unions in Wales to respond by calling for action on carbon trading to ensure Welsh famers – and the skills they bring – are part of the solution. Indeed, carbon offsetting on productive land, as seen in Powys, Mid Wales, often driven by large corporate interests, is impacting not only the price and future food production from farmed land in Wales but also potentially affecting soil biodiversity, watercourses, and landscape diversity. This is due to significant trends of planting woodlands dominated by coniferous species, which are less valuable for wildlife diversity. There can be economic and social trade-offs when there is too much pressure on carbon reduction and offsetting.
There is also a potential risk to food production if large swathes of land are removed for rewilding purposes. Furthermore, there’s significant uncertainty at the farm level regarding what the government expects from farmers concerning the net zero issue. As the net zero strategy is measured based on territorial emissions, concerns arise that food production may be outsourced to other countries. This could undercut local farmers in price, while also undermining standards in animal welfare and environmental protection. Since emissions from imports are not measured under the current scale, this potentially results in merely ‘outsourcing’ emissions, rather than reducing them globally.
Economic Factors
Agriculture is integral to the Welsh economy, society, and environment, employing about 58,300 people. With 84% of Wales’ land being used for agriculture, predominantly in ‘Less Favourable Areas’ suitable for hill and upland livestock farming, the sector is highly vulnerable to the removal of subsidies. Pressures such as rising input costs, linked to the cost-of-living crisis, reduction in farm subsidies, and fluctuating market prices make running a farm business a challenging endeavour.
Indeed, in response to growing profitability challenges in the sector, many farmers are dedicating more time to expanding their income through both existing operations and new farm diversification ventures. Opportunities for diversification into direct selling, agri-tourism, and renewable energy present potentially lucrative avenues for many farmers. However, access to advice and support for such entrepreneurial ventures often leave many farmers constrained.
Farming in Wales: Social and Environmental Contributions
Welsh farming is socially and culturally essential, with many families having worked the same land for generations. Farming in Wales produces key public goods and supports cultural ecosystems, including the day-to-day maintenance of living Welsh cultural landscapes. This is exemplified by farmed land within Welsh National Parks and Areas of Outstanding Natural Beauty.
Traditional farming practices, such as the use of working dogs, shared access and shepherding of ‘cynefin mynydd’ (common grazing), and the expertise in maintaining and utilising vintage machinery, are not only functional but also add cultural richness to the Welsh countryside. These heritage practices, from farmers preferring working dogs over machinery to engaging in traditional haymaking and showcasing their crafts at local village shows and fetes, are integral to the idyllic countryside which the public value. New schemes should protect against the potential loss of these valuable and culturally significant traditions and activities.
However, financial instability poses a risk of deepening poverty among farming households, pushing farmers to exit the sector and, in the process, eroding the social fabric of rural Wales.
Indeed, many farms contribute to the biodiversity and richness of the Welsh countryside, through the conservation of landscape features such as dry-stone walls, traditional farmhouses and outbuildings, and the conservation of native livestock like the Badger Face Welsh and Banwen Welsh Mountain sheep . These breeds thrive on natural herbage that is well-managed.
While global food systems account for about 31% of human-made greenhouse gas emissions, Welsh hill and upland farming offer numerous environmental benefits. These practices are often less emission-intensive and involve grass-fed livestock on predominately extensive agricultural systems (as opposed to intensive indoor set-ups). Arguably, many Welsh farms align well with pro-environmental farming approaches. Thus, loss of farmers means the loss of their environmental contributions.
Moreover, new environmental regulations may impose significant financial burdens on farmers. While it is true that some actions, like some regenerative agriculture practices, can offer both economic and environmental advantages, other actions involve economic and social trade-offs. Rural policy makers should analyse carefully potential unintended consequences and properly compensate farmers for economic losses involved.
Moreover, farmers will likely need targeted support and guidance when transitioning to new schemes, especially if they have always been historically engaged in food production activities. For many, food producer is the sole identity of the farmer. Yet, the increased greening of agricultural policy is challenging this identity. To meet these environmental sustainability initiatives investment is needed. Not just farmer buy-in but also financial. Without a profitable farm business, farmers are unlikely to make the green transition. Farmers cannot go green if they are in the red.
Below we offer some ways in which Welsh farmers can be supported throughout this green policy transformation.
Key Ways of Supporting Welsh Farmers: A Holistic Approach
- Balanced Sustainability in the Sustainable Farming Scheme: It’s crucial that the Sustainable Farming Scheme not only focuses on environmental goals but also ensures the economic viability and social fabric of farming communities. Financial compensation must adequately cover the loss of BPS post-Brexit, preventing business failure as farmers transition. Environmental efforts should not undermine the social dynamics of the industry. For example, excessive tree planting, while beneficial for the environment, could jeopardise food security and diminish the workforce in certain areas.
- Mental Health and Community Support: With high rates of mental health issues in farming communities, providing support is essential, especially as economic pressures linked to poverty among farmers intensify. Several agricultural charities in Wales, some supported by the Welsh Government, are addressing this rising challenge.
- Encouraging Diverse Farming Practices: New schemes should reward activities that hold social and cultural significance, accommodating traditional farmers keen on preserving their identities and practices. Practices such as using working dogs, and maintaining vintage machinery, while not the most efficient or environmentally positive, enrich Welsh agriculture’s cultural landscape and should be preserved and encouraged. Payments could be given to some farmers to preserve these socially and culturally important activities.
- Establishing a Conducive Rural Economy: A robust local and regional economy is fundamental for farming success. Support for ancillary rural businesses—such as abattoirs, machinery specialists, and traditional craftspeople—is vital. These entities not only support the agricultural ecosystem but also contribute to the community and cultural continuity. Furthermore, advisory services and rural networks should be bolstered to provide farmers with localised knowledge, enabling them to navigate post-Brexit changes effectively.
Final thoughts
The post-Brexit era presents unique challenges and opportunities for Welsh farming. Addressing economic uncertainties, preserving social and cultural practices, and enhancing environmental contributions are pivotal. Farmers should play a crucial role in achieving net zero; it should not mean zero farmers. Targeted policies that focus on alleviating poverty among farming households while encouraging sustainable practices are essential for the resilience and prosperity of Welsh farming communities, and Welsh communities more broadly.