3. Topical Questions – in the Senedd on 2 March 2022.
1. What assessment has the Government made of the impact of the United Kingdom and Aotearoa (New Zealand) trade agreement on agriculture in Wales? TQ602
We've worked with our industry stakeholders to identify the impacts on Welsh agriculture. This work underpinned our representations to the UK Government that any trade deal must not disadvantage Welsh farmers or compromise our high animal and environmental standards.
I thank the Minister for that response. Now, whatever the spin of the Conservative Government in Westminster, the truth is that this trade agreement will leave Welsh farmers at the whim of a market that they have no control over. If something changes in the lamb market, particularly in terms of China or the United States, then there will be far more New Zealand lamb reaching these shores or going into the European Union, undermining our farmers. Without a tariff, Welsh farmers have no say and no protection. Plaid Cymru has warned for some time that these trade agreements will have a detrimental impact on Welsh farmers. The Farmers Union of Wales has suggested that the impact of the agreement with Australia, for example, will lead to a reduction of £29 million in the red meat GVA in Wales. Whilst it's not possible for us to make the same forecasts for the agreement with New Zealand, the data available suggests that the impact of both these agreements will lead to a decline of somewhere in the region of £50 million in the GVA of the red meat market in Wales.
So, I would like to ask you as Minister whether you believe that this is a price worth paying. Welsh farmers are more vulnerable to a bad agreement than other farmers in this state. Also, does the Minister agree with me that the Westminster Government needs to hold a full assessment of these trade agreements and their impact on Welsh farmers?
Yes, I do. I think it is that cumulative impact, because it's very clear to us and probably to your party, and certainly to the stakeholders we spoke to, that one of the things we were very concerned about with the Australia deal is that it would set a precedent and you can see now with the New Zealand deal that that is absolutely the case. So, I do think that an assessment is needed. Now the deal has been signed, obviously our officials and I need to scrutinise that next chapter. But we warned them; this is what we told them would happen. We're very concerned about the animal health and welfare standards and the environmental standards. I think New Zealand have very similar standards to us, if not higher, perhaps, in some cases, where Australia certainly doesn't. But it is that cumulative impact—you know, what's the next trade deal going to do? So, I think it is important that we monitor it very carefully. We repeatedly raised concerns with the UK Government about this, but I'm afraid they haven't listened to us.
Minister, I'm grateful to the Member for Dwyfor Meirionnydd for bringing this question forward today, but it is important to note and remember that this trade deal is worth much more and is much broader than agriculture alone. This isn't spin—[Interruption.] This isn't spin, as the Member said. This deal is the most advanced agreement that New Zealand has signed with any nation bar Australia. Despite the chuntering of the Member from Blaenau Gwent on the back benches, it is one of the most environmentally green deals ever, confirming commitments to the Paris agreement and net zero. It will liberalise tariffs on the largest list of environmental goods in any free trade agreement to date and encourage trade and see investment in low-carbon services and technology. It will also ensure that produce not able to be grown or produced here in Wales, such as Marlborough sauvignon blanc, manuka honey and kiwifruit, become more affordable to Welsh consumers. At the current time, 210 Welsh businesses export goods to the value of £23 million—[Interruption.] They may wish to shut me down, however these are the facts, Llywydd.
No, you won't be shut down unless I say so, and you can carry on, in my opinion.
Diolch i ti, Llywydd. At this time, 210 Welsh businesses export goods to the value of £23 million to the New Zealand market, and the indication is that, across the whole of the UK, the value of this relationship is likely to increase by almost 60 per cent. While I understand the agricultural industry's concerns that Wales will be flooded with an influx of New Zealand lamb, we already know that New Zealand do not even use half of the quota that they are allowed to export under existing rules. In fact, New Zealand sheep meat exports to the UK have fallen by nearly a half over the last decade. With Wales currently exporting agri-produce to the value of £1.8 million to New Zealand, and £23 million of export in total, could I ask the Minister what plans she has to help the Welsh agricultural sector further grow this market, and what discussions is she having with Cabinet colleagues to ensure that we make full advantage of this trade deal with New Zealand?
The Member does a sterling job in putting a very positive spin on this trade deal. The question I was asked—[Interruption.]
Let the Minister respond, please.
The question I was asked was about the impact on agriculture, and you will appreciate that's where I've had my focus. It is important that we do look at how we can expand our exports. You will be aware that the Minister for Economy is currently in Dubai at Expo 2020, where, yesterday, for St David's Day, Welsh food and drink was promoted on the UK pavilion for the whole day. We've just had Gulfood, where Welsh Government supported eight food and drink companies, and we're continuing to work with Hybu Cig Cymru to make sure that we do expand new markets for our very high-quality Welsh lamb and beef. But that does not take away the concerns that we have about the New Zealand trade deal. You are quite right; New Zealand doesn't currently meet its tariff-free quotas for lamb, and that's primarily due to the costs and the distance of exporting to the UK, as compared to the far nearer and obviously larger Chinese market. But there is a risk that New Zealand will pivot away from China, in particular due to current trade friction. Of course, New Zealand does, as I say, send the majority of its beef, for instance, to China and the United States. These are large markets that will still demand the majority of exports, but it's the cumulative impact that we are particularly concerned about.
I'm grateful to take part in this question, and I thank Mabon for laying it. Unlike Samuel Kurtz, who will try to defend the indefensible, and has swallowed, obviously, the little black book or whatever it is he's been given to do that, I don't feel quite so assured, and I'm sure the farmers in my area and his area won't feel quite so assured either. It is a fact—let's keep to the facts here—that Australian animal welfare is lower. [Interruption.] This now is, you're quite right, a New Zealand trade deal. We all know that there is a high dependency in our area on exporting Welsh lamb, and it is, in my view, the best lamb in the world; there is no question about that. But we can't ignore the fact that there is going to be a cumulative effect of all these trade deals. It doesn't matter how you try to talk it up. And that in itself will have a negative impact on the farmers here in the UK, particularly here in Wales. Brexit was supposed to deliver freedom. Well, it isn't going to deliver much freedom for these farmers when they haven't got any money in their pockets. So, my question to you, Minister, is: above and beyond what the Welsh Government is already doing to support Welsh farmers, which is much more than the UK Government, by the way, what more is the Welsh Government able to do, considering that the budget for farmers has already been decreased by excessive amounts of money, so that Welsh Labour ensures the future of Welsh farming here in Wales, unlike the Tory Government who are determined to destroy it?
Joyce Watson makes some very important points. The UK Government, however the Tories over there defend them, cannot pretend that they've ever supported farmers in the deals that they have brought forward since we've left the European Union, and you only have to look at my budget to see how much money farmers have lost from the UK Government in their funding to the Welsh Government. The Member will be aware that work is well under way to bring forward an agriculture Bill this year. That will ensure our future plans take into account the potential impacts of trade deals. That's something I've been very keen for officials to work through. What we want to do is make agriculture much more resilient and competitive. And, of course, we've always said, haven't we, that our rural communities are so important for our culture, for our heritage of Wales and, of course, for the Welsh language, and farmers are right at the heart of that.
Thank you, Minister.