We now move on to a debate by the Climate Change, Environment and Rural Affairs Committee on its report on the future of agricultural and rural development policies in Wales and I call on the Chair of the Committee to move the motion—Mike Hedges.

Motion NDM6347 Mike Hedges

To propose that the National Assembly for Wales:

Notes the report of the Climate Change, Environment and Rural Affairs Committee on the future of land management in Wales, which was laid in the Table Office on 26 March 2017.

Motion moved.

Thank you, Deputy Presiding Officer. I am an example of Harold Wilson’s statement, ‘a week is a long time in politics’. [Laughter.] I am delighted to open today’s debate on the report from the Climate Change, Environment and Rural Affairs Committee on the future of land management in Wales, although I feel like someone going up to collect the cup and not having played in the tournament. I am grateful to all those who took the time to contribute to the inquiry. I would also like to thank the previous Chair of the committee, Mark Reckless, all the members of the committee, and the clerking team, for their efforts in delivering this report.

For over 40 years, the way agricultural produce has been farmed, sold, and financially supported has been decided primarily at a European level. The vote to leave the European Union means that Wales will, in future, have the opportunity—or the threat—to mould policies closer to home. So, what will the Welsh agricultural sector look like in five, 10 or 20 years? This report sets out a road map to overcome the immediate obstacles and an ambitious vision for the future.

The first part of the committee’s report deals with the immediate challenges arising from Brexit. What would constitute a successful Brexit for Wales’s agriculture sector and land managers? The committee identified five key elements. First, access to the single market: the risks of failing to achieve a trade deal with the EU are grave. In 2015, Wales exported over £12 billion-worth of goods outside the UK. Over two thirds of that was sold to the EU. Last year, over 90 per cent of Wales’s meat exports were to the EU—that’s excluding movement within the United Kingdom. The value to the Welsh food production economy and jobs in Wales is too great to contemplate no longer having access to the single market.

We need reassurance from the UK Government that we’ll have tariff-free access and, importantly, no quotas on exports for our agricultural producers. What we don’t want is what some other countries have—some at zero tariffs and then, above a very small number, you start paying a substantial tariff, which will only do damage to the Welsh agricultural sector. This can only be achieved if Wales has an equal voice at the negotiating table on talks regarding access to the single market. The terms have to be UK agreed, not led by Westminster.

Cabinet Secretary, you have accepted in principle our recommendation relating to strengthening existing markets and developing new markets on the basis that you already undertake significant trade efforts to develop export markets. We are facing new and significant challenges. Can you explain what you are going to do differently to address them?

The second key element is an appropriate level of funding. The UK Government must commit to maintain funding for agriculture at the current common agricultural policy level for this present cycle. Funding for agriculture should not be subject to the Barnett formula, because if it is, Wales, which is more dependent on agriculture, would lose out substantially, financially. We argued that, in turn, the Welsh Government allocate this level of funding for agriculture, with no reduction, until at least April 2021, and I am pleased that the Welsh Government has accepted this in principle. I would be grateful for more detail from the Cabinet Secretary on her response that she

‘will continue to press for the best deal for Wales’ on funding.

The third element will be a regulatory framework that supports the agricultural sector. Leaving the EU will necessitate new inter-governmental relationships at a UK level. Central to this will be the development of common regulatory frameworks agreed by each of the constituent nations of the UK, not imposed from the centre. Within such frameworks, there needs to be flexibility for us to develop policies that are appropriate for Wales. These regulatory frameworks must prevent unfair competition between producers in different parts of the UK, and reassure consumers that high animal welfare and health standards will be maintained. Cabinet Secretary, can you update us on the latest ministerial-level discussions on the proposals for a UK council of Ministers and whether or not there is support for an adjudication mechanism in case of disputes? And, when I mean ‘adjudication mechanism’, I mean something that is different from being decided by the department of agriculture at Westminster. It needs to be independent and fair.

The fourth element is access to labour and skills. Our agricultural and food producing and processing sectors will continue to need to access a full range of skills once the UK has left the EU. There is a grave risk to Welsh businesses if Wales’s labour needs are not reflected in negotiations on withdrawing from the EU. This also represents an opportunity to think about workforce planning for these sectors. Welsh Government needs to assess where skills shortages will be in future, and consider how skills and education policies can be aligned with the needs of the sector. We recommended the development of a skills strategy for the sector, which the Cabinet Secretary has accepted in principle only. I would be grateful if she could explain why she could not accept the recommendation in full.

Finally, there must be a transitional period. The changes arising from Brexit are challenging and complex. For forty years, we have operated within systems and structures arising from our membership of the EU. In its report, the committee has emphasised the importance of a transitional phase to move to any new system of support.

Part two of the committee’s report sets out a vision for what might come next. After CAP has gone, how should we support the agricultural sector in Wales? What will rural communities look like? How will communities thrive? The committee believes that we need to be ambitious and innovative, and has put forward proposals for a model of payment and support for land management that is based on sustainable outcomes. Farmers are central to the delivery of these commitments, as they manage over 80 per cent of the land area of Wales. They can help to deliver priorities such as tackling climate change, flood prevention and improving the quality of our water.

What are the outcomes a new system should support? We must tackle climate change. Measures to tackle climate change should be central to a future support mechanism based on outcomes. We want to see policies that aim to reduce the carbon footprint of food production and incentivise carbon sequestration. We must support a resilient food production sector. There is an opportunity for Wales to become a more resilient, more self-reliant food-producing nation. We want Welsh Government policies that value local production, reduce the carbon footprint and protect high animal health and welfare standards. We recommended that the Welsh Government should work with producers and retailers to increase sales of Welsh produce, including through public procurement, and that includes both health and local government as well as central Government itself.

We must maintain sustainable forestry and woodland. Land managers should be incentivised to increase forestry coverage in Wales, and future policy should also consider the role commercial forestry can play. We must protect and enhance biodiversity. Funding for land managers should support specific interventions for threatened species, habitats and protected sites and also promote a spatial approach to land management.

We must manage the landscape for the benefit of tourism, recreation and, perhaps most importantly, for the local communities. A system of support based on outcomes must encourage and improve public access to the countryside. In addition to the considerable public health benefits, this will lead to benefits to tourism and the rural economy. We must nurture the Welsh language and vibrant rural communities. Rural communities are fundamental to a thriving Welsh culture, language and identity. Protecting the agricultural sector is vital if we want those rural communities to prosper. Many of the areas with the highest density of Welsh speakers are in rural north-west and west Wales. Any future system of support must bolster Wales’s unique cultural and economic environment and the upland farming tradition. The Welsh Government must emphasise these aspects of Welsh life in its discussions with the UK Government about the future direction of policies in the UK.

In conclusion, leaving the EU provides an opportunity to realign payments for rural communities to deliver public goods such as climate change mitigation and biodiversity enhancement. Financial support for agricultural producers will be shaped differently in future. The committee’s report makes it clear that our landscapes and rural economies will continue to be managed mainly by farmers, and this should be supported with public funding. However, we can only seize these opportunities if we are guaranteed the same level of funding that Wales receives from the EU, something promised during the referendum campaign. The Welsh Government must seize the chance to design made-in-Wales policies that support the sector and reward farmers for delivering sustainable outcomes, such as protecting biodiversity and mitigating climate change. Without continued support, there will not be a managed landscape to attract tourists and a thriving rural economy to support the language and culture of Wales. This is a once-in-a-lifetime opportunity. Wales needs ambitious and innovative land management policies to deliver wider environmental benefits for future generations. I hope it can be achieved.

I’m pleased to take part in this debate and to reflect on some of the themes highlighted in this report by the Climate Change, Environment and Rural Affairs Committee. A significant number of the recommendations included in the report refer to agricultural trade relationships following Britain’s decision to leave the European Union, and I am pleased to note the positive response of the Cabinet Secretary to those recommendations. It is vital that a fair and permanent framework is established to protect the sustainability of the agricultural industry when Britain leaves the European Union. Several stakeholders stressed the importance of EU export markets for Welsh agricultural products, and highlighted the need for the devolved nations to have a strong voice at the negotiating table. CLA Cymru, for example, is right to say that farmers need a trade policy that creates markets for farmers here in the UK and abroad. Therefore, it is absolutely essential that Governments across the UK now work together to secure an agreement that allows farmers in Wales to continue to rely on existing export markets, to ensure that these exist in the future and to protect our farmers against cheaper imports.

The evidence to the inquiry here also makes it clear that there will be individual priorities for each of the nations to discuss with the EU, and that one of Wales’s priorities will be to protect the red meat sector. I note that Hybu Cig Cymru told the committee, and I quote:

I can’t over-emphasise the importance of the European market to us as far as the red meat sector is concerned, especially Welsh lamb. As the majority of you will know, one third of the Welsh lamb production from Wales, which is about 1.3 million lambs, actually ends up being consumed in Europe, tariff-free of any restrictions.’

Of course, the Welsh Government must now work with the UK Government to ensure that sectors such as the Welsh red meat sector are prioritised strategically in any Brexit negotiations, and I welcome the Welsh Government’s response to recommendations in the report on this specific issue.

The committee’s report is broad-ranging and is not only concerned with the role of agricultural trade in Brexit negotiations. Indeed, there some very interesting themes related to food production and food culture, and I’m pleased to see this particular issue getting the attention it deserves. I’m sure we all agree that Wales is unsurpassed in producing high-quality products. This policy encompasses a number of Welsh Government departments—everything from health and education to the economy—and therefore it is vital that any strategy in this area is effectively co-ordinated.

I agree wholeheartedly with the committee’s view that there is a need for a higher level of support from the Government to develop a culture that creates high-quality food, sourced locally, and that creates sustainable products. For example, a lot more could be done on public procurement, particularly in relation to supporting smaller producers. Indeed, while I accept that the National Procurement Service has made some progress in this area, the Welsh Government could do more to lead the way in supporting local sourcing of food and drink for contracts, as well as building stronger ties with small and medium-sized companies, which should be supported in their efforts to access public procurement supply chains. The Welsh Government’s response to the report refers to a new approach being adopted in this area, designed to open up new opportunities for producers that have not been prioritised in the past and have not had the ability to tender successfully. I hope that the Cabinet Secretary will expand on this a little in her response to the debate.

The committee report is also right to emphasise the importance of the dairy sector in Wales, and I note recommendation 17, which calls on the Welsh Government to prepare a plan for the dairy industry, in consultation with producers, distributors and retailers. Members will know that there are high input costs for dairy farmers, and I believe that there is scope here for the Welsh Government to secure more funding for capital improvements. When I quizzed the Cabinet Secretary on this particular point in March, she said that the new small grants scheme was one area where the Government could provide specific support, and I hope that she can provide more details on how the Government is doing this. I appreciate that an independent review of the dairy sector in Wales resulted in a report in March 2015. However, given the significant funding problems experienced by some farmers in the dairy sector, this may be an area that is worthy of further attention.

In conclusion, Dirprwy Lywydd, may I again thank the committee for its work on the report? This report has addressed a wide range of issues, including climate change, sustainable land practices, agriculture and food and drink. And I hope that, in light of the committee’s work, the Welsh Government will proceed with an even greater focus on supporting the agricultural industry, and will do everything it can to work with the UK Government to safeguard our agricultural industry in the future.

First of all, can I say that Plaid Cymru supports the committee’s recommendations in full? We’re very pleased that we were able to agree a cross-party report that set out so clearly the issues and concerns in leaving the European Union and what needed to be addressed by this Government, but also by the Westminster Government. Because I agree with the report, I don’t want to talk much about the report itself, but concentrate in two areas, I think. One is the area in which Plaid Cymru would have gone further than the report—so, to set out how we would respond to some of the challenges that are in here—and secondly, what’s happened since we published the report. Because it’s worth bearing in mind: we’re having this debate today, but the report was published at the end of March. What has actually happened? We’ve had several weeks, almost three months, since then—more than three months, actually; four months—where we would’ve hopefully seen some progress on some of these recommendations. Well, let’s examine a little of that.

First of all, to say how we would respond to this report. From our point of view, we believe that membership of the single market and the customs union remains the most viable and sustainable way to maintain our agriculture sector here in Wales. We have that market that has been so successful for us to date. Farmers want to remain trading with that market. Yes, they want to explore new markets that will become available, but they want to remain trading in that market, and I think the membership of the customs union and single market is the most successful way forward on that.

Plaid Cymru also wants to examine how we might firm up something that’s been said over the last few weeks around payments and continuing support for the farming sector. Because obviously, what did happen between March and today was a general election, which changed nothing, politically. It didn’t give a mandate for any sort of Brexit, has led to a mess in Westminster, and a lack of progress on the challenges set out in this report. But it has led to something that’s emerged over the last week, which is a commitment by the Westminster Government that the farming payments are now maintained for this Parliament, and that’s to 2022. So, we’ve gained a little bit of time, if you like, in that sense. I would like the Cabinet Secretary, when she has the opportunity, to confirm that she will maintain that support and it is the intention of this Government to continue that, because as she says in responding to the report,

‘Continued CAP support beyond 2020 is dependent on decisions made by HM Treasury.’

True, but Her Majesty’s Treasury, or Her Majesty’s Government, has said there will be support until 2022, so let’s hear a similar kind of in-principle support from this Welsh Government.

The Llywydd took the Chair.

I also would like us to do a lot more around procurement, and Paul Davies did mention this. But clearly, if we are leaving the European Union and we have some flexibility around how we use procurement now, we can prioritise, let’s be honest, what other countries do prioritise anyway in the European Union—but there we are, let’s re-examine that argument—high welfare, high environmental standards, healthy food, local food, fresh food. These are the things that the Italians and the French use even today under present rules. But without such restrictions, we can look at how we might beef up—yes, beef up—how we produce. In hospitals, in school, in our army and our armed forces, we need to be buying UK and Welsh meat as much as possible. There’s an awful lot of progress we can make on that with contingent benefits for the agriculture sector.

I also have to say that we haven’t seen the progress that I would want to see following the committee’s report in March on the workforce issues. We have, at least, just had an announcement from the Prime Minister around her, if you like, deal or offer to EU citizens in the UK. I don’t think it’s generous enough. I don’t think it’s sufficient enough to meet the concerns of the committee, and I would like to see more effort put in there. It is certainly Plaid Cymru’s view that those EU citizens that are here currently should stay and should have the same rights as they currently have. That would give some assurances within, in particular, the food production and serving side, if you like, with the restaurant trade as well. That’s all part of that particular circular economy.

I also think that Plaid Cymru would go further than the report around where we see a trade deal being agreed. If we are to be leaving the single market and if we are then to strike different sorts of trade deals, then certainly we are of the view that this National Assembly should have a veto as part of a UK-wide agreement on how those trade deals should be struck. I think it’s something to be said that David Davis has recently said that the National Assembly will be formally consulted on the repeal Bill—they’ve stopped calling it a great thing—but we need to go further. We need that consultation and agreement on the trade deal that might be struck as well.

The report is, I think, very comprehensive and a thorough explanation of the challenges that face us in leaving the European Union, but I think the imagination that we need to demonstrate now in responding to those challenges has not been demonstrated fully to date by the Welsh Government. It certainly has been completely absent to date from the Westminster Government, and Plaid Cymru wants to see much further action and much faster action.

I’m very pleased to take part in this debate and to congratulate Mike Hedges on his emergence—as Tory leaders used to before elections—as Chairman of the committee. I know we didn’t have an election, but I can say that if there had been one and he was a candidate, he would have had my enthusiastic support, because I’ve seen the way that he has worked in the Public Accounts Committee, which is very impressive indeed, and I’m sure he’ll be an excellent chairman of the climate change committee.

I believe this is a very good report. I don’t agree with absolutely every recommendation, but almost all of them, and I do think it does help to put matters in perspective. If we turn to paragraphs 8 and 11 of the report, they give us the figures that Wales exports £12.3 billion-worth of goods, but only 2 per cent of those are accounted for by food and live animal exports. So, agriculture is a vital part of the Welsh economy, but, as I said earlier on, whatever problems might be thrown up by the uncertain process of transition from where we are now to where we’ll be post Brexit, it should be relatively easy for the British Government and the Welsh Government to accommodate the financial implications of whatever is decided. I’ve no doubt whatsoever that agriculture in Wales will not be worse off, post Brexit, than it is now. Indeed, the scope for improvements are much, much greater.

We have a massive trade deficit in food products. We exported, from the UK, £20 billion in food and drink; we actually import £43 billion. In 2016, the latest year for which figures are available, that trade gap actually widened by over 4 per cent. So, if the European Union is so foolish as not to enter into a successor agreement with us, then there is massive scope for import substitution, because, again, the report very usefully provides us with the effective tariff figures for food products, which are, of course, colossal. Eighty-four per cent in cattle carcasses, 87 per cent in frozen beef, 46 per cent in lamb carcasses, and so on and so forth.

What that demonstrates to us is actually how regressive in its impact on ordinary people the common agricultural policy is, because tariff forms of protection are a very inefficient way of supporting agriculture and farm incomes, because the people who bear the biggest brunt of the burden are those on the lowest incomes, because everybody has to buy food and food products. Therefore, they tend to be very regressive in their impact, and one of the great advantages of being able to design for ourselves an agricultural policy for the UK and for Wales is that we will, perhaps, be able to skew the system more in favour of people at the lower end of the income scale. And I very much hope that that’s what we’ll be able to do.

I do think that recommendation 2 is unrealistic, which calls for an equal voice at the negotiating table in the talks and access to the single market for the devolved nations, because the United Kingdom Government is charged with the responsibility for negotiating on behalf of the entire United Kingdom, and I think it’s unrealistic to imagine that any of the constituent nations could have a veto on its decisions. Given that England has 85 per cent of the population of the UK, it’s just not practical politics to make this argument, whatever the merits might be from Plaid Cymru’s perspective, and I fully understand why they want to make the case for that. But, nevertheless, being part of a federal system would be a very different state of affairs from the one that we currently have, and that would have implications for fiscal transfers between England and the rest of the United Kingdom as well, the consequences of which might be very significantly adverse for Wales. So, it’s a game of swings and roundabouts.

But having said that, I do believe that the devolved nations should have a parity of esteem within the United Kingdom in these negotiations, and the United Kingdom Government should have at the forefront of its mind the interests of Wales, and Welsh agriculture in particular, in the negotiations. Although free trade negotiations are, inevitably, as Simon Thomas said, a trade-off of one interest against another, we must find a way of compensating the losers, if there are losers, from that process. Given the statistics that I quoted at the start of my speech, I don’t think that that is an impossible situation to find ourselves in, ultimately.

As regards the issue of migration, and agricultural workers in particular, before we went into the European Union, we had a seasonal agricultural workers scheme that was being maintained right up until relatively recently, and it should be not beyond the bounds of possibility to restore that and to take account of whatever skills gaps there are in the Welsh economy, as well as in other parts of the UK. Again, that calls for sensitivity on the part of the UK Government.

So, there’s very little time in this debate to go into all the complications of this process, but I do believe that this report gives us very good ground upon which to take the argument forward, and I congratulate members of the committee for reaching the consensus that they did.

Could I just begin by congratulating Mike Hedges on taking over the chairmanship of this committee, and also a very good first speech here in the Senedd introducing this report? Could I also thank our former Chair as well? Contrary to any rumours, he wasn’t booted off—we were doing a good old job there, and he presided over a good piece of work in this report, and over the previous work that we’d done as well, so it is worth marking the recognition of that and the fact that we came to a consensual approach within this on some very difficult areas. I think it’s a tribute to the joint working of the committee, but also the impartial stewardship that went on in this period as well. But, Mike, congratulations, and I know you’ll do a cracking job going forward as well, as you’ve already shown.

I don’t want to go through all of the report now. In fact, I’m specifically going to stay away from the explicit issues to do with farming, dairy sector, Welsh lamb sector and so on. They’re in there. I agree with all of them; that’s patently obvious, and we hope that the Welsh Government will take them on board and respond to them well. But I want to deal with some more fundamental issues that I think are of importance.

The first one, actually, responds to the mention that Neil has just made about recommendation No. 2 on a UK-agreed position. What I would say here is: I think the thinking of the committee on this recommendation was, as we do these negotiations in exiting the EU, and how we will come out on the environment, on agriculture and a range of other things, we should now be doing what we mean to do going on from here. We shouldn’t be waiting for the next two or three years. We’ve now come to the point, quite frankly, where the old days of being on a JMC, where the agenda is set by a UK Minister—it’s not a meaningful agenda, where the discussions are fairly cursory, where there are no meaningful outcomes, and if there are any outcomes, frankly, it’s agreed by the UK Minister rather than those sitting around—are long gone. If the forward model—and I think it is; I personally strongly feel it is, and we touch on that in later recommendations, in fact—is that we need to have that, if you like, more of a council of Ministers approach, where not only is there parity, as in, ‘We all get along very well and I’m going to show you respect’, but there is genuine parity, as in, ‘We will jointly agree what the agenda is; we don’t care whether you’ve got a 3.5 million population or a 58 million population, you have equal say around this table’—. Curiously, I would say to Neil: think of this in terms of what currently goes on in Brussel when the Council of Ministers sit down. It doesn’t matter what size that country is; it doesn’t matter whatever—they all have a power to actually say ‘no’ at some points there, whether you are Malta or whether you are the United Kingdom. [Interruption.] And I used to sit next to the Maltese Minister and he had the same power we had.

Let me turn to—. So, I want to touch on those issues: recommendations 6, 7 and 8 there—those ones that talk about joint working mechanisms such as developing a UK council of Ministers. I think that is very important. We haven’t seen progress on that, despite Welsh Government making its position clear on its approach on this, and we are a few months down the line on this, but particularly in respect of agriculture and rural development and land management, as we’ve got within this report. That parity of esteem that agriculture and rural development will be developed in partnership, and there will be parity of esteem between the UK Government and devolved administrations—these may seem like simple rhetoric, but they’re not rhetorical flourishes. It is going to the essence of what we think should be, now, a changed relationship amongst the constituent parts of the UK. And it’s not diminishing the role of the UK Parliament, the UK Ministers—it’s actually saying there needs to be much more equity about the whole piece and across the nations and regions.

We note in recommendation 6 that,

‘The Welsh Government should seek urgent bilateral talks with the UK Government to develop a common understanding of the legal and constitutional position in respect of devolved and reserved powers.’

I still think, as we speak now, we still have no clarity. We are waiting for, no longer the great repeal Act, but the repeal Act, but we still have no clarity. This I find quite amazing, that as we stand here now, months on, at this stage, and as we have Ministers for Brexit, Ministers for this, that and the other out there in Brussels at the moment negotiating, we still do not have clear a common understanding of the legal and constitutional position in respect of devolved and reserved powers at this very moment.

In the brief few seconds remaining I would urge everybody to look not only at part 1, which shows the pragmatism, the issue of dealing with the here and now, the immediate challenges of land management and Brexit, but also to look at part 2, because part 2 is the pragmatic idealism of where we go in future. I say this against the background of a UK Minister who has spoken openly about the possibility of having an insurance-based scheme for farms going forward. He hasn’t spoken about them in the last couple of weeks, but he spoke about it previously. That is an open market situation where you trade your commodities against futures and so on and so forth. Well, heaven help our sole trader, upland hill farmers if they’re exposed to that, quite frankly. But there are some great ideas in here about actually explicitly rewarding, in effect, using public money to reward public goods of land management, sustainable outcomes, biodiversity et cetera, et cetera—even access. That, I think, is an exciting thing that we should grasp, going forward, from this report.

Even if I’m not able to congratulate the Chair of the committee on obtaining the debate, I very much want to congratulate him on his speech and for collecting the cup and what he is doing with the committee. I very much want to distinguish what I said last week about the allocation of Chairs and Standing Orders from welcoming him personally to the position, and I only hope he enjoys it as much as I did. Thank you, also, to him and Huw Irranca-Davies for their remarks.

I was delighted to steer or shepherd this report through committee, and I think it’s a very strong committee and a good report that has cross-party support and, I think, speaks for Wales. I would like to concentrate my remarks on a number of the recommendations.

Recommendation 6 was that there should be bilateral discussions between the Welsh Government and the UK Government. We gave some specific areas where that should happen, but in general I think it’s a good approach. I totally understand there are formal sort of cross-UK devolution approaches, whether that’s the JMC or a replacement, but I think we also need our own bilateral relationships to develop particular issues for Wales. Paul Davies mentioned red meat and, particularly, lamb exports, but also I think there’s just a very different political context. Scotland has a Government that is committed to independence and breaking up the UK. The DUP, if the Executive gets back, will have a First Minister who is in an alliance or a pact at Westminster with the Conservative Government, and has her own particular ways of influencing the agenda through that. I think we’re probably in an intermediary position to those two, but we need to be making our points forcefully, bilaterally as well as multilaterally, through the devolved arrangements, and I think we need to work together as an Assembly. We’ve done that on this report, but I hope we could also do so more generally. We were speaking yesterday about all 60 Assembly Members working together to get more resources for Wales, but, yes, particularly in the agricultural area. Andrew R.T. Davies is a farmer. He’s leader of the opposition. He’s offered his help in any way with these post-Brexit discussions to try and get the best deal for Wales, and I just hope the Welsh Government will take him up on that offer.

I want to look at recommendations 9, 10 and 15, which broadly relate to funding. I think there has been some move forward on this. To me, at least, the Conservative manifesto was clear that there would be continued funding through to 2022. That wasn’t reflected in the Welsh Government’s response to the committee report. I assume that’s because that hadn’t been communicated, at that point, at Government-to-Government level. I’m pleased to hear, I think, from the Cabinet Secretary, that that has now happened, and indeed if the DUP have helped to accelerate this, at least that is one positive point.

I think, as a committee, we thought very carefully about this recommendation. We want to continue getting money for Wales. We think farmers continue to need support. On the other hand, I think, for some of us, there’s a question as to how realistic it is to say that that must happen forever and a day, whatever happens to be the support at this particular point in time, because the Welsh farming and agricultural land development will develop, the CAP will develop, and we don’t know what the CAP funding is going to be between 2021 and 2027. We think that’s the most appropriate benchmark, but we also think that’s a sensible period to transition to a new system. I think now that the UK Government is offering financial support on reasonably equivalent terms through to 2022, that takes us well into that transition period. I think it would be helpful if Welsh Government could clarify and confirm that that money, to the extent that it flows from the UK, will continue to be spent on agriculture, farming and land management purposes more broadly over that period. Then we need to look to a transition into a new system. And whatever people’s views about the merits of the European Union, I think few people would say that we would have designed the CAP specifically for Wales. When we get the opportunity to determine our own agriculture policy and for land management, that will be very different.

I think, for many farmers, it is going to be quite a challenge making that transition. It’s very important that we give them time to plan for that, but I think also if there is a change in funding relations and, as on recommendation 16, that we are using those to be more aligned to sustainable outcomes while producing high-quality food, but public benefit for public money, that will be a very different system. To the extent farmers plan and develop for that, I think if we move away from pillar 1 subsidies or payments simply on the basis of land ownership, one implication of that may be that the value of agricultural land becomes less over that period. One implication as a sustainable thing may be in terms of forestry. We didn’t see it as a binary thing of forestry or farming; we actually think many farmers would like to plant more woodland on their farms than they do now, and do so more easily, and that farming and forestry can work together, just as we hope that the Welsh Government and UK Government will work together to see a better future for farming and land management in Wales.

I rather disagree with Simon that the general election changed nothing politically vis-à-vis the debate we had yesterday, but I think it was very disappointing that, having called the general election, Theresa May then said absolutely nothing about the Brexit terms and conditions that, supposedly, the general election was about. We are still very much in the dark about what the future might hold, although we’re beginning to have a rational debate about the virtues of changing our immigration policy.

I think that is one of the considerable threats that’s on the doorstep now, in that many of our industries are actually dependent on immigrant labour from other parts of Europe. So, for example, our tourism industry relies a lot migrant and European labour, as do our abattoirs and our food processing industry. So, we already have the challenge of fewer Europeans coming to the UK to work because of the fall in the pound, which makes the wages on offer less attractive. One of the challenges we face now is: who is going to do these jobs if they are not going to be done by other Europeans? Are we going to increase the pay in these sectors, which will attract more local people, or indeed retain the people coming from other European countries, or are we going to be happy to see these activities being exported elsewhere, whether it’s abattoirs to England or food processing to other parts of Europe? But I think that, in turn, compounds the challenges we face in relation to climate change, and the more we add on food miles, the more challenging that becomes.

Neil Hamilton is right to point out that we have a massive trade deficit in food at the moment, so there are many opportunities for diversifying. However, the huge dislocation of current agricultural patterns could be needed if we’re suddenly going to be having tariffs imposed on us for entry into the single market, which will have a huge and revolutionary impact on, for example, our lamb industry, where 30 per cent of the product is exported to Europe. Tariffs would kill off that business overnight.

So, it is true that whilst the CAP has guaranteed the production of food after the second world war, it hasn’t exactly delivered the sort of healthy, local food industry that certainly I would envisage that we would want, to ensure that we have a thriving agricultural sector that benefits our rural communities, but also benefits the population at large. Yes, everybody has to buy food, but what many people buy at the moment would have difficulty passing the trade description Act as being food. Quite how we’ve allowed the food processors and the distributors to dress up their products in the drive for profit at any price, whilst those who actually produce the food have really not been in the driving seat, and we’ve really lost sight of the need to nourish our nation.

The Welsh Government has a key role to play through its food procurement strategy. The health of the nation relies on a radical change in our diet. Too many people never eat fresh fruit and vegetables, and if we’re not serving them in schools and hospitals, we should hardly be surprised. We have much to learn from our European partners, who take pride in their local food culture in a way that many of us fail to do. There are enormous opportunities for us here to ensure that we have a Welsh agriculture that is of cultural and social significance, beyond the numbers employed or the capital invested.

We do have some pioneering food and farming businesses here in Wales and we need to continue to develop them. For example, Puffin Produce, which now produces nearly all the potatoes sold in all our supermarkets across Wales, as well as an increasing number of other vegetables as well and a few items of fruit, is a completely excellent model for the future. But, diversification has got to be on farmers’ agendas when there’s such a huge question mark over some of the things they currently rely on exporting. Many farmers say this isn’t possible because of our weather, but I challenge that business-as-usual approach, because water is the new gold and we have plenty of it, whereas the eastern part of Britain faces serious drought. We cannot go on simply extracting water from underground reservoirs to continue in an unsustainable way. So, I think there are many other ways in which we could see a diversification of our food industry, as well as an improvement in the health of our nation, as we move forward in this rather unknown landscape of the post-Brexit world.

I’d like to thank the committee for their work on this report. I think there’s some excellent analysis and statistics, and it’s wonderful to see the Damascene conversion of the former Chair of the committee, Mark Reckless, previously a UKIP Member, on the need to continue to have full access to the European single market. He, I’m sure, is aware of the implications of what that implies, which goes against a whole range of promises made to the Welsh people during the Brexit referendum.

Will you take an intervention?

I thought you might, Mark. [Laughter.]

I notice the Cabinet Secretary, in her response, said that it was absolutely crucial to maintain the single market and the free movement of goods, services, and capital—no reference to labour, workers or people in the Government response. I believe the whole Chamber would support free and unfettered access, as frictionless as possible, to the single market, and in particular no tariffs. I think that’s the objective of all of us, and something I believe can be achieved.

Great. Well, good luck with that one. I hope that the European Union is listening. We would all love that kind of situation to be one that is delivered. We will see what is possible.

I think there’s a whole load of issues that need to be considered in the light of Brexit, but I think one thing is clear and that is that we will cease to be a part of the common agricultural policy under any new model that we are part of. So, unless we get our ducks in a row pretty quickly, that’s likely to lead to massive instability and insecurity for vast numbers of people living in our rural communities. And the clock is ticking.

I hope members of the committee will forgive me as I’m not going to focus on what is good in the report, which I must emphasise is excellent, but on aspects of policy that perhaps have not been given the attention that I think they deserve in the report. I believe that, like the Government in Ireland, we should be preparing for a worst-case scenario: one where we fall off a cliff and have to resort to WTO rules. It’s clearly not a desirable situation, but one for which I think we should be prepared. I think if this were to happen, it would be imperative for the farming community to shift from an industry that focuses on supply to one that focuses on demand. There’s almost no mention in the report of the need, or the possibility, of adding value to raw produce. Whilst processing food is done to an extent in Wales, the scope for expansion is absolutely enormous. Let me give you an example—

Could the Member just give way on that?

Of course.

Just to inform the Member that the committee intends to do another report, launched in the Royal Welsh Show, on food in Wales.

Lovely. Well, I look forward to that. So, I’m glad that that is something that will be addressed. One of the things that you could focus on, perhaps, in that report, is the fact that there are over 79 million ready meals eaten in the United Kingdom every week. So, where’s our ambition to grow in this area? What’s the infrastructure, training and support that we need to put in place to make that happen?

I highly applaud the emphasis put in this report on using public procurement to drive demand for Welsh produce. In particular, Welsh quality processed produce, but this must be a platform to drive the conversation with the big boys, with the supermarkets, who are the really serious players who buy our goods. Also not mentioned in the report was any reference to compensation for people who work on the land in the framework of the CAP. This is particularly important in relation to TB in cattle, or if there is a future outbreak of foot and mouth disease. I hope that’s something that the committee will be able to look at in future as well. Some of these issues will be explored in the economic development plan for rural Wales, which I’ll be publishing next week.

In relation to the workforce and the potential threat if we were to restrict access to EU seasonal agricultural workers, a recent report suggested that the cost of fruit could go up by 50 per cent in the United Kingdom if seasonal workers were not allowed in. But it’s not just about the fruit pickers: 60 per cent of abattoir staff are EU nationals and 98 per cent of vets in abattoirs are EU nationals. So, the amount we’d have to pay British staff would be considerably more. So, the price of our meat would inevitably rise and don’t forget that this could be at a time when we’d be flooded with cheap meat from Argentina, New Zealand and elsewhere. [Interruption.] Was that a bit of mumbling?

Mumbling is allowed. [Laughter.]

Mumbling, fine. Sighing, yes, we’re used to that. The costs of leaving the EU are clearly emphasised in the report, and the regulations that we adhere to currently support the production of high-quality food, and ensure the widest possible access to market. But it’s not just increased tariffs that we need to fear. If we leave the EU, and let’s not forget that those tariffs could be astronomical if we’re using WTO rules—a cattle tariff of 84 per cent, a land tariff of 46 per cent, these are huge costs—but there are these massive extra costs that could come from administration, in particular if we were outside the customs union. There’d be an increased cost in relation to rules of origin, conformity of assessment procedures, the need to reformulate products, labelling and packaging changes—[Interruption.] More mumbling. All of which—[Interruption.]

Carry on, Eluned Morgan.

All of which, the report suggests, could lead to a 5 to 8 per cent increase in costs. So, in terms of what we can do in Wales in future to support agriculture, I was extremely interested to read in the report about the restrictions that may be imposed by the WTO in relation to how, and to what extent, future payments can be made to farmers, and the restrictions, in particular, of environmental schemes that are limited to income forgone for the compliance scheme in question. This could massively curtail our room for manoeuvre in terms of support. I think this is a real worry. I would ask the Cabinet Secretary if this is an area that the Welsh Government is exploring. I’d like to, finally, thank the committee for its work. In particular, I’d like to thank the former Chair for his work; I hear that he’s done a very good job as Chair of the committee. And I would like to wish the new Chair, Mike Hedges, all the best for what I think is an essential area for rural communities.

I call on the Minister for the Environment and Rural Affairs, Lesley Griffiths.

Diolch, Llywydd. I very much welcome the committee’s report, and would like to thank Members for—. It really is an excellent report and I think that’s reflected in the fact that I’ve been able to accept, or accept in principle, all the recommendations. So, I think we’re already making progress on some of the recommendations. I, too, would like to thank Mark Reckless for his work as Chairman and to welcome Mike Hedges to his new role.

As the report recognises, farming accounts for the management of over 80 per cent of our land in Wales and, therefore, the future of our environment and the future of agriculture are fully intertwined. I think Members have raised some really important points this afternoon, and I will try to respond to as many as possible in the time allowed. Our White Paper, ‘Securing Wales’ Future’, outlines our views on the future of agriculture and the environment post Brexit. We are absolutely clear these are, and must remain, devolved. We will not tolerate any attempts by the UK Government to deprive this Assembly of its existing powers or deprive Wales of any funding. We will have our own Wales agriculture policy and I’ve made that very clear since we had the referendum back in June. It is essential—Members have referred to this—that Welsh Government plays a full part in discussions to ensure the UK negotiating position fully reflects the very specific Welsh context we have. Colleagues will be aware that I’ve been actively engaging with the UK Government and devolved administrations through regular ministerial meetings. We have had a hiatus. Simon Thomas referred to the fact that it’s been three months since the report came out, and what’s happened? Well, we have had a big pause of two months. We’ve lost an enormous amount of time over the general election campaign.

I’ve had the opportunity now to speak to the new Secretary of State at DEFRA. Colleagues will be aware I mentioned that the June monthly meeting was pulled. We’ve now got the July one reinstated, following discussions by myself and my Scottish counterpart, because it is really important now we get on with this. We’re over a year since the referendum, article 50 was triggered back in March, and we really need to be making some progress. As a Welsh Government, it’s been a huge focus for me. It’s a huge focus for my officials. We are looking at scenarios. We’ve looked at the cliff edge that somebody referred to. We’re looking at all scenarios so that we are absolutely ready when discussions begin again.

I have acknowledged that UK-wide frameworks may be needed and I still believe that to be the case. But I will not tolerate the imposition of such frameworks by Westminster and Whitehall. All four nations have to agree collectively any UK-wide arrangements and devolution must be respected, and any UK position that’s come to must reflect the interests of the UK as a whole. I made it very clear, when I spoke to Michael Gove, that he needs to be very clear when he’s talking for the UK and when he’s talking for England.

I think one of the opportunities, because we have to look for opportunities in this, is that this—. Somebody mentioned it was once in a lifetime—I think it was Mike Hedges who said it. I think there is a unique opportunity for our stakeholders to help us shape policies going forward, particularly in agriculture and fisheries and environment. So, that was one of the reasons I immediately set up the ministerial round-table group—we meet again on Monday—so that we can have that input from our stakeholders. I think the work of the round table has added significant value and it’s really enabled a cross-sectorial approach so we haven’t had people working in silos. I think, again, we’ve led the way across the UK in that stakeholder engagement. We’ve really considered issues and looked at issues and discussed issues in a much more integrated way. We have got a number of sub-groups that have recently come about from the stakeholder group and one of them is on land management. That will provide further focus to this area of work.

Jenny Rathbone mentioned that things have become slightly clearer. I think slightly clearer is the way forward. For instance, the UK Government just talked about the great repeal Bill prior to the election. Then, suddenly, last week in the Queen’s Speech, we heard there was going to be an agriculture and fisheries Bill, which we hadn’t heard before. We were being reassured that the great repeal Bill would be able to contain everything and we’d go from there. We didn’t think it would, and clearly the UK Government have come to that view also.

Just turning to funding—and several Members raised funding—earlier in the election campaign, the Prime Minister visited a farm in north-east Wales and she declined to commit to protecting support for farmers after 2020. That has now gone to 2022, so, in answer to Simon Thomas’s question, whereas I confirmed agricultural support up to 2020, we can now confirm it up to 2021—obviously, the lifetime of this Welsh Government. But we need to keep pressing on this, because we were told that the agricultural sector would not lose a penny if we left the EU, so that is a point I keep making.

I think the lack of a commitment post 2022 raises a lot of worries about long-term investment, because, when you talk to farmers, they have to look very long term—years and years—and I know it is a concern not just to farmers but to land managers, rural businesses, and rural communities, because they have to plan effectively. So, whilst we are waiting for further detail, I think it’s up to the Welsh Government to do all we can to protect our rural communities.

Paul Davies mentioned that, when I went to committee, I talked about the small grant. Well, that’s the £40 million business farm grant; I didn’t like the word ‘small’ grant, so we’ve renamed it business farm grant, and I launched that in April, which is £40 million—£10 million per year for four years. That will enable farmers to invest in vital equipment and technology to help their businesses become more resilient, because that’s what we all want to see—an agricultural sector that’s sustainable, vibrant, and resilient.

Jenny Rathbone mentioned about diversification. Last Thursday, I visited a farm just outside of Llanrwst where the farmer has diversified now into tree planting, and he’d planted 85,000 trees since March. It was absolutely brilliant to see this, and that’s the type of diversification we want to see and support.

I’ve also fully committed the remaining £223 million of our rural development programme, which will provide some much-needed financial reassurance.

Again, I’ve continually stated how vital full and unfettered access to Europe’s single market is to Wales’s economic success. Trade is obviously a reserved issue, and that’s why it is so important we’ve engaged. So, it’s not just myself that’s engaging but also, obviously, the First Minister through JMC Plenary and Mark Drakeford through JMC EU. Some two thirds of identifiable Welsh exports go to EU countries, and any significant reduction in access to the single market we know will be damaging. So, again, we’ve urged the UK Government to adopt this as a top priority for negotiation with the EU.

Some Members mentioned the food and drink sector. It’s hugely valuable to Wales and employs, if you think about everybody—from restaurants and food processing factories, abattoirs, agriculture—0.25 million people in Wales. The UK Government seem to prioritise deals with other countries over maintaining our access to the single market, which is of concern, and they do appear willing to sacrifice sectors such as red meat in the interest of quick wins with countries like the USA and New Zealand, who are very keen to access our markets. By contrast, a key consideration for us is UK producers not being undercut by imports where production standards are poor, and where consumers are put at risk. The UK market is also very important to us, and I absolutely believe UK Government must play its role in safeguarding our food and agricultural industries across all sectors and regions of Wales.

We’ve also sought to influence UK Government departments to promote our products through international trade work, and we also undertake significant trade efforts to develop the export market for food and drink ourselves, and I will continue to have a focus on that. Hybu Cig Cymru obviously promote our red meat, and we’ve just had a new board in place. I’ll be announcing a new chair, hopefully in the very near future, also, because the focus needs to remain on that.

So, I just want to reassure Members that I will continue to face the challenge that we all have, and absolutely want to assure our stakeholders that I will speak up for Wales forcibly at every opportunity. Diolch.

I call on the Chair of the committee to reply to the debate—Mike Hedges.

Diolch, Llywydd. Can I thank everybody who took part in the debate? We’ve seen a great degree of consensus breaking out over most of it. Can I thank the Cabinet Secretary for her response, and can I just thank everybody who either during the debate, or via messages prior to it, welcomed me, and can I just say thank you very much for that?

Starting off with Paul Davies—it’s nice to go first, Paul, isn’t it, because everybody else has to say the same thing as you but in a slightly different way? I think Paul highlighted the need for devolved nations to have a strong voice, Governments across the UK to work together, and he highlighted the high quality of Welsh food products. I think that was echoed by very many other speakers. Can I just say, on my own experience of the high quality of Welsh food products—lamb, beef, cheese and butter in particular—I’ve got the stomach to prove it? [Laughter.]

Simon Thomas—I thought he was going to stop after 30 seconds when he said he would give full support—. Unfortunately, he felt the need to go on for the next four and a half minutes. But I think he’s right, we do need to keep single-market access. The importance of that—I’m surprised that some people don’t actually see how important it is that you’re already trading with people—. Finding new customers is great, but giving up the customers you’ve got seems a very brave decision—the words ‘foolhardy’ or ‘stupid’ might be used by others.

Simon mentioned something that I keep going on about—one of the advantages of coming out of the European Union is the procurement rules of the European Union will no longer apply. We can support our own local food industries. Far too often, many of us, in different places, doing jobs prior to this, have been told, ‘You can’t insist it’s Welsh lamb. You can’t insist it’s Welsh beef. You can’t insist it’s Welsh cheese and butter, because you have to obey the European Union rule and you have to go out to procurement.’

Will you give way, Mike?

Please.

Sorry. Thank you for giving way on that item. Indeed, it does give us the opportunity perhaps to do more, but, picking up on Simon’s point, when he raised this, I think, in his contribution, actually, we’ve already shown that there are other countries within the current EU framework that can do that. In fact, the Welsh Government led on the work on that, with Professor Dermot Cahill of Bangor University, who showed that many of these so-called rules that prohibit us doing more with procurement were actually a load of baloney.

Can I say I agree with you entirely? What I was going to say was we could have got round it from the very beginning by saying all instructions had to be in Welsh, and make everybody in Spain, Portugal, and other people who wanted to export to us, produce Welsh packaging with Welsh instructions, and that would have stopped it.

Neil Hamilton—with Brexit, there are lots of different views; yours is probably in a minority in here at the moment. But we’ll find out, won’t we, over the next two years. This is an experiment—not one that many of us would like to go through, but it is an experiment and somebody’s going to be right and somebody’s going to be wrong in less than two years’ time. Importing food from outside the EU, yes—but can I just ask how reliable will it be, what will the quality be like, and what quality of animal welfare will we see from it? I think that some of us are prepared to pay a little bit more not for animals to suffer.

Huw Irranca Davies—he thanked Mark Reckless for the chairing of the committee. I think that’s very important because, although I’m replying now, all the work was done under the chairmanship of Mark Reckless—so, can I just again say thank you very much, Mark, for the quality of the report you were responsible for? Can I slightly change what Huw Irranca-Davies said: Luxembourg has the same power as Germany in the EU—I think that’s a much better one than Malta and the UK, because we won’t be in it much longer. I think he did raise something that was really important, the importance of part 2. Where do we go from here? Because I think that is the situation. Whatever happens, we’re coming out of the European Union—how can we protect it?

Mark Reckless, thank you—it’s your report, so I knew you wouldn’t attack it. [Laughter.] The importance of bilateral discussions, funding—I think that is important—. I think that—. If you remove the support, do you think that hill farming in Wales would survive without any subsidy? We just had, earlier, members of the Conservative group saying how important it was that it got its agricultural support from European agricultural support. In fact, we had complaints that some of it was coming late. Well, actually, when we come out of Europe, none of it will be coming ever.

Will you give way?

Certainly.

Can I just say, it wasn’t my report, it’s the committee’s report as a whole? I agree, without subsidy, it will be very, very difficult to see that sort of sheep-farming landscape—upland farmers—survive anything like they do now. One thing we saw in the report is the value of that landscape to tourists and people who come to Wales and I think it should be a priority, with the money that we will have, to keep that.

Thank you very much. Jenny Rathbone—post Brexit—. Well, the starting pistol has been fired. Our dependency on immigrant labour, we know. The effect of tariffs on lamb exports, we won’t have—well, we will have very, very few. And the quality of food is important. I think that something we all we all need to think about is what we’re putting in our stomachs. Eluned Morgan said it was an excellent analysis and congratulated the committee—another person who, after 30 seconds, would have been great to stop, but went on to say some very important things. World Trade Organization rules are there to allow everybody to trade, but it doesn’t make it easy for people to trade outside the trading bloc. Food processing is important. If anyone’s read my little pamphlet on the Swansea city region, one of the things I say is why we don’t get the benefit of the processing of food. We produce it and then the processing—the high value—goes elsewhere.

Can I just thank the Cabinet Secretary for her response, welcoming the report—an excellent report? There’s the White Paper, which I think that most of us are in total agreement with, and that all four nations must agree. We can’t have ‘What’s good for England is all that matters’. The involvement of stakeholders, I think, is really important and the financial support until 2022 is probably the one thing that’s going to please lots of farmers coming out of what’s been said today. Thank you.

Y cwestiwn yw: a ddylid nodi adroddiad y pwyllgor? A oes unrhyw Aelod yn gwrthwynebu? Felly, derbynnir y cynnig yn unol â Rheol Sefydlog 12.36.