Item 5 on our agenda is a statement by the Minister for Environment, Energy and Rural Affairs on the future domestic rural development programme. I call on the Minister for Environment, Energy and Rural Affairs, Lesley Griffiths.

I wish to update Members on the Welsh Government's priorities for the future of rural development in Wales. In partnership with the EU, Wales will invest a total of £834 million in our EU RDP by the end of 2023. This has helped deliver significant value and resilience in our rural communities. 

During the period of the present RDP, we have witnessed the extraordinary rise of the Welsh food and drink sector. We exceeded our target, set in 2014, to grow the sector to £7 billion turnover by the end of 2020, reaching £7.4 billion a full year earlier than we had anticipated. Export growth has been a significant driver of this success, increasing £160 million since 2015 to reach £565 million in 2019, built on our reputation for world-class produce with high welfare and environmental standards. A recent independent evaluation showed that our Farming Connect service had played a crucial role in creating the foundations for change, with a substantial impact on improved business and technical skills, and evidence of widespread benefits in terms of biodiversity and on animal health, notably in terms of reduced antibiotic and fertiliser use.

The sustainable management scheme is delivering whole-landscape nature restoration in every part of Wales. This includes connecting and restoring dune habitats, trialling natural flood management to improve our climate resilience whilst creating woodland and wetland habitats, restoring hundreds of hectares of peatlands, and connecting thousands of people to the landscapes in their areas by creating new volunteering and recreational opportunities. The Welsh Government has some of the most sophisticated environmental monitoring capability of any European nation. Their work provides indications of some positive progress made through our agri-environment schemes, including halting the decline in the populations of upland farmland birds and an increase in woodland bird species, a positive recovery in soil acidity, consistent improvements in the condition of blanket bogs, and a growth in the overall land-use carbon sink, which in the decade prior to devolution was, in fact, a source of emissions.

Last year, I was able to repurpose the LEADER scheme to support rural communities in responding to the devastating effects of the pandemic. Those local action groups truly rose to the challenge, from the Conwy farm assistance scheme, a cohort of volunteers practically supporting farmers affected by COVID, through to Menter Môn's Neges project, which I was privileged to see in the summer—a food delivery service to ensure that vulnerable people and front-line workers were fed during the pandemic. It delivered 10,000 meals to NHS staff and 4,000 food parcels to vulnerable people. These efforts are a perfect example of how the rural development plan has helped to build resilience into rural communities. The local knowledge and agility of LEADER groups meant that they were there when their communities needed them. These are just a very small number of examples of the achievements supported by the RDP, and further evaluation will be completed as the present scheme draws to a close.

Today, I am laying agricultural support regulations that make provision to amend retained EU law in Wales to put in place a domestic framework to fund new rural development schemes. This would begin the multiyear transition, ahead of the introduction of the agriculture Bill in the next term of Government.

Before I move on to talk about the priorities for the future of rural development in Wales, I would like to place on record my deep frustration and disappointment shared by many in Wales's rural communities with the way in which UK Government has decided to renege on their commitment to replace the rural development funding that we are losing as a result of our exit from the European Union. Rather than replace the funding in full, they have taken the decision to subtract from replacement funds the amount we are still receiving from the European Union, as well as a proportion of those funds used to deliver the RDP. This has created a £137 million loss to the rural economy of Wales in next financial year alone.

Some have argued that rather than seek to recover these funds from the UK Government through a reversal of this decision, we should instead take funding away from other areas, including our COVID-19 response, in order to fill the gap left by the UK Government's decision. Besides being a perverse suggestion—to restore the losses to the rural economy by creating losses elsewhere—this is a matter where I believe the public would expect the Senedd to speak with one voice in calling on the UK Government to respect the importance of the rural economy to Wales and the UK, and to reverse this damaging decision.

The first in a series of consultations on the delivery of a new rural development programme is planned for summer 2021, to be brought forward by the new Government in the new Senedd, with the aim of launching a new rural development programme in 2024. As we begin that period of engagement, I believe there is a clear set of priorities emerging that reflects the desire amongst the public for a future very different from the past as we emerge from the COVID-19 pandemic in the context of the growing severity of the climate and nature emergency. The future of rural development will need to support social justice in the transition to a net-zero economy. The future RDP will need to support skills and employment that enable the greening of rural industries whilst promoting inclusion, fair work and use of the Welsh language.

The future rural economy of Wales also needs to be nature positive, achieving the sustainable management of natural resources. A future RDP will need to support innovation that can deliver greater direct benefits for the resilience of ecosystems and our wider well-being, sharing the benefits of our natural environment more fairly. We need to keep Welsh farmers on the land by further strengthening their reputation for high animal welfare and environmental standards, supporting the whole supply chain to increase the value of the goods they produce and capturing more domestic and international demand for truly sustainable produce. We need to strengthen the vibrancy of our rural towns and villages, including by supporting a circular economy that retains more value locally whilst avoiding waste and pollution, and by taking advantage of the opportunities for remote working to draw more economic activity into rural areas.

We need to see a major growth in our national capacity for land management beyond farming, including fostering a larger domestic timber industry that can supply low-carbon building materials, and supporting the development of our Welsh nature conservation sector with secure and diverse means of generating income. The progress we have seen under the RDP will provide a solid basis for developing a new rural development programme that is focused on supporting a socially just transition to a zero-carbon and zero-waste economy, achieving the sustainable management of natural resources and sharing the benefits of our rich natural heritage more fairly. Diolch.

Thank you for the statement, Minister. To ensure that the future RDP delivers for rural Wales, lessons have to be learnt from the past and the agricultural sector need listening to. Your claim that the progress seen under the RDP—the current one—will provide a solid basis for developing a new rural development programme is not strictly correct.

As this Parliament knows well by now, RDP 2014-2020 has been badly managed, to the extent that £53 million was awarded without ensuring any value for money. So, you cannot achieve that strong basis without agreeing to calls for an independent review of the RDP to be urgently commissioned, to include an analysis of the effectiveness and value for money of RDP projects and measures. So, will you, Minister, please listen? It's the farmers who are telling me this from across Wales. Will you deliver on this, please?

Now, the request is supported by the fact that the latest data shows that as of November, the farm business grants scheme allocation had £453,000 uncommitted, despite huge demand. That scheme was allocated around £10 million less than the enabling natural resources and well-being scheme, which, despite two rounds, has seen zero applications, and only 50 per cent of the total of £835 million has been spent to date.

Clearly, we need an update today as to what is going on with the enabling natural resources and well-being scheme. So, I would be grateful if you could clarify now how you will ensure that, for instance, there is an appropriate, secure electronic system to record, maintain, manage and report statistical information on the programme and its implementation, and why the rural development advisory board is non-statutory. Why won't you consider making the board statutory, so as to ensure that it operates as a programme-monitoring committee, involving our key stakeholders, like the National Farmers' Union Cymru, the Farmers' Union of Wales and the Country Land and Business Association?

There's a real need for such a committee already, because at present you have shown us no plan, hardly any situational analysis, any description of measures, any evaluation plan, a financing plan, an indicator plan, a communication plan, a management and control structure, monitoring and evaluation procedures, nor any information on programme publication and selection criteria. Now, of course, I acknowledge that the first in a series of consultations on the delivery of a new rural development programme will be planned for this summer in 2021, but there are changes and guarantees that we could achieve now. For example, will you honour the £40 million per annum commitment for the domestic RDP and make a full spend under the current EU RDP? Thank you. Diolch.

Thank you, Janet Finch-Saunders, for those lists of observations and comments and questions. You talked about disallowance and allegations against RDP projects, and I am, obviously, aware of those. Appropriate and proportionate checks are taken to ensure that eligible expenditure is reimbursed, and that includes recovery of payments that have been made during the lifetime of a project, and I think that's really important to understand—that there are a variety of stages during the life of a project.

I should also say that the Welsh Government has obligations to the European Commission—they monitor and they oversee all of the RDPs, and we are meeting and we continue to meet those obligations, and that needs to be recognised, and the Commission has repeatedly articulated their satisfaction with our programme. Our record on disallowance is the best in the UK and it's one of the best in Europe, and it really compares very favourably with the European Union. I think their average is about 2.1 per cent, the UK average is about 2.4 per cent, and the disallowance on our spend is 0.14 per cent. So, I hope that you'll join me in recognising that. I think it's a very naïve approach to public finances to suggest value for money is something that only can be assessed at one stage of a project. Every Member here knows that value for money for public spend has to be assessed at every stage of the project going forward.

You talked about the enabling natural resources and well-being grants, and those projects are being developed along with cross-sector co-operative projects at the right scale. It does predominantly support projects that make improvements in residential areas by delivering benefits for people, for businesses, and their community. And again, each project is required to set out the multiple benefits that we're doing.

I do appreciate that for some organisations, moving away from core funding to a more project-and-outcome-based model was faster, perhaps, than was originally expected, and it caused concern. But we are allowing time and funding for organisations to transition and action the exit plan that they were asked to set in place. Officials continue to meet with organisations to talk through the grant, and we've been very clear that what was considered to be core funding in the past can now be built into the future-based grant applications, and I have to say the feedback that's come back via officials and from myself with engagement with stakeholders has been very positive. This is the first window of the ENRaW funding. All large-scale projects have been issued with 'proceed at risk' letters, and they were required to produce those detailed delivery plans you referred to, and those plans were based on their original applications, and perhaps focused more on the operational delivery.

It is absolutely important that we listen to stakeholders, and as I said, going forward to the new Government when they take the future RDP forward—it is really important that we look to learn from the existing RDP, and it's also really important that we take action in the context of our own Welsh Government priorities. And certainly the climate emergency must be at the fore of that. So, it is really important that we talk to a wide range of stakeholders, not just the ones that you referred to, but also that we look around the world at best practice to bring forward new projects and make sure that that targeted investment has the most benefits and impact. I mentioned the climate emergency. Obviously, we have a biodiversity emergency as well. And, of course, we have Brexit to deal with. So, I think it's not business as usual—that's not an option any more—but we must learn from the current RDP.

Thank you very much, Llywydd, and I thank the Minister for the statement. It's crucial, of course, that there is a specific framework for rural support in Wales, with specific measures to support rural development in order to provide for the viability of our rural areas. In doing so, it's also important that the Government's approach delivers across the aims and objectives outlined in the Well-being of Future Generations (Wales) Act 2015, which are the environmental goals, but also the economic, social and cultural goals, and I would hope that the RDP would reflect that cross-section of ambition that each and every one of us has, I hope, in Wales.

I share the Minister's disappointment on the fact that the Conservatives have not kept their word on funding. There is valid concern that there is a risk that this Government will also find itself not adhering to your part of the funding deal. Now, I welcome the fact that you've committed, in your statement, to spending the whole of the RDP budget for 2014-2020. I do think it's very ironic that a Conservative involved in this debate has asked you to keep to your level of RDP funding for future years, but that is a valid request. The Welsh Government should be contributing on average £40 million, which is what would have been the joint domestic funding. Now, I want to hear you saying clearly that that will be a commitment from Government in moving forward, because if you don't do that, then you are doing the same as the Conservatives by ensuring that Wales will lose out as a result of leaving the EU.

Your statement does say that there will be a further evaluation completed, and you have made mention of that, but you've not provided us with any detail on what that evaluation will be and what it will evaluate. I assume that you will say that it won't be an evaluation of the impact and value for money for the whole RDP. It perhaps will only look at specific projects, and perhaps you could give us more information on that. Will it be an independent evaluation or something that the Government itself undertakes? Because if we are basing the future approach on the model from the past, then it is important that we learn lessons from the past and it's important that those lessons are objectively assessed outwith Government, and I'm on the record in saying that I also support a broader independent review of the past RDP. So, we need more clarity on your intentions in that regard, please.

The point on governance is valid. We do have the current programme monitoring committee for the RDP, and there is concern that transparency and accountability will be eroded unless there is a corresponding body in the context of the future programme, and it's an important principle, I think, that stakeholders should be a central and meaningful part of that process of managing how this funding is administered and used.

Now, you refer to the fact that this will be the first in a series of consultations undertaken in the summer—well, I hope it'll be more meaningful than some of the consultations that we've had in the past. Because you will know, with the White Paper on agriculture, many people feel that very little has changed, although we're on our third consultation. You said that it was important that we speak to stakeholders; I would say that it's important to listen to stakeholders too. Perhaps we need to do a little more of that in future years.

Finally, I just want to refer to something that you said in your statement.

You say in your statement that

'we need to keep Welsh farmers on the land'—

I couldn't agree more with that, of course—

'by further strengthening their reputation for high animal welfare and environmental standards, supporting the whole supply chain to increase the value of the goods they produce.'

Well, of course, one thing that has to be central to that is growing our processing capacity here in Wales. We know that the majority of our milk leaves Wales to be processed. We know, having lost abattoirs over recent years, that too much of our meat, as well, is leaving Wales. We're still an extracted economy, even when it comes to food, one of the cornerstones of our economy here in Wales, and the RDP has a central role in reversing that trend and retaining more of the value in the associated jobs from the food sector within the Welsh economy. It'll shorten supply chains and cut food miles as well. So, can you just confirm to me that you agree that this has to be a central focus of any new rural development programme moving forward?

Thank you, Llyr, for those questions and comments. I think what you were saying about the well-being of future generations Act is absolutely vital, and it's really important that the future RDP responds broadly to it, as you say, to enable social, economic, environmental and cultural opportunities across rural sectors. And I think, in my opening statement, I did refer to that.

It has to fit in with Welsh Government's priorities, and listening to the previous oral statement by my colleague Ken Skates, it's really important that we reduce those barriers to economic development that there are in our rural communities, and better position our rural communities to attract and retain jobs and investment. It's also really important that the future RDP continues to respond to the statutory requirements of the Environment (Wales) Act 2016 as well.

You asked me for commitments around funding, and shared my concerns regarding the UK Government reneging on its commitment. Obviously, I can't commit full domestic funding for the next financial year—where would that come from? I go back to what I was saying: it's all very well, as you say, Conservatives telling me that I've got to plug gaps; in Government, you have to budget and make sure that that budget is spread across. Where do you make those choices? So, you know, to take it from somewhere else to make sure the rural communities don't, unfortunately, have that gap, caused by the UK Government, is obviously very difficult. We will continue to co-fund the EU RDP and we stand ready to commit that funding in the future.

I think you raise a very important point around processing, and certainly, prior to COVID-19, we'd seen a loss of some of our processing capacity, which we could ill afford to do, and I think that is an area where there will need to be a focus.

I don't agree with you around any consultation I've ever had not being meaningful; I've always thought that it's absolutely vital that the consultation is meaningful. And, okay, we're having a third one around our sustainable farming management scheme coming forward, but don't tell me you haven't seen changes in those consultations to reflect the previous consultation. I always feel that the consultations have been very welcomed as we go towards having an agricultural Bill, and you'll be aware that I published the White Paper in December ahead of the next term of Government.

I'm sorry, I muted myself there. I was busy thanking the Minister for her statement. There are no further speakers in this statement.