Pwyllgor yr Economi, Masnach a Materion Gwledig

Economy, Trade, and Rural Affairs Committee

25/11/2021

Aelodau'r Pwyllgor a oedd yn bresennol

Committee Members in Attendance

Hefin David AS
Luke Fletcher AS
Paul Davies AS Cadeirydd y Pwyllgor
Committee Chair
Samuel Kurtz AS
Sarah Murphy AS
Vikki Howells AS

Y rhai eraill a oedd yn bresennol

Others in Attendance

Aled Jones Dirprwy Lywydd, Undeb Cenedlaethol yr Amaethwyr
Deputy President, National Farmers' Union Wales
Arfon Williams Rheolwr Cefn Gwlad, RSPB Cymru
Countryside Manager, RSPB Cymru
Creighton Harvey Ymddiriedolwr Annibynnol, Afonydd Cymru
Independent Trustee, Afonydd Cymru
Gareth Parry Uwch-swyddog Polisi a Chyfathrebu, Undeb Amaethwyr Cymru
Senior Policy and Communications Officer, Farmers’ Union of Wales
Rachel Sharp Cyfarwyddwr, Ymddiriedolaethau Natur Cymru
Director, Wildlife Trusts Wales
Rhys Evans Rhwydwaith Ffermio er Lles Natur
Nature Friendly Farming Network

Swyddogion y Senedd a oedd yn bresennol

Senedd Officials in Attendance

Aled Evans Cynghorydd Cyfreithiol
Legal Adviser
Elfyn Henderson Ymchwilydd
Researcher
Lara Date Ail Glerc
Second Clerk
Robert Lloyd-Williams Dirprwy Glerc
Deputy Clerk

Cofnodir y trafodion yn yr iaith y llefarwyd hwy ynddi yn y pwyllgor. Yn ogystal, cynhwysir trawsgrifiad o’r cyfieithu ar y pryd. Lle mae cyfranwyr wedi darparu cywiriadau i’w tystiolaeth, nodir y rheini yn y trawsgrifiad.

The proceedings are reported in the language in which they were spoken in the committee. In addition, a transcription of the simultaneous interpretation is included. Where contributors have supplied corrections to their evidence, these are noted in the transcript.

Cyfarfu’r pwyllgor yn y Senedd a thrwy gynhadledd fideo.

Dechreuodd y cyfarfod am 09:30.

The committee met in the Senedd and by video-conference.

The meeting began at 09:30.

1. Cyflwyniad, ymddiheuriadau, dirprwyon a datgan buddiannau
1. Introductions, apologies, substitutions and declarations of interest

Bore da a chroeso, bawb, i'r cyfarfod hwn o Bwyllgor yr Economi, Masnach a Materion Gwledig yn y chweched Senedd. Dwi ddim wedi derbyn unrhyw ymddiheuriadau y bore yma, ond oes yna unrhyw fuddiannau yr hoffai Aelodau eu datgan o gwbl? Sam Kurtz.

Good morning and welcome, all, to this meeting of the Economy, Trade and Rural Affairs Committee of the sixth Senedd. I haven't received any apologies this morning. Are there any interests that Members would like to declare? Sam Kurtz.

As a member and director of Wales Young Farmers Club, I declare an interest.

Diolch yn fawr iawn. Unrhyw un arall? Nac oes.

Thank you very much. Anybody else? No.

2. Papurau i'w nodi
2. Paper(s) to note

Felly, symudwn ni ymlaen i eitem 2 ar ein hagenda, sef papurau i'w nodi. Rŷn ni wedi derbyn llythyr gan Gadeirydd y Pwyllgor Deddfwriaeth, Cyfiawnder a'r Cyfansoddiad at y Gweinidog Cyllid a Llywodraeth Leol ynglŷn ag adroddiad blynyddol Tribiwnlys Tir Amaethyddol Cymru 2020-21. Rŷn ni wedi derbyn llythyr gan Gadeirydd y Pwyllgor Plant, Pobl Ifanc ac Addysg ynghylch cyllideb ddrafft Llywodraeth Cymru ar gyfer 2022-23. Rŷn ni wedi derbyn llythyr gan Weinidog yr Economi, ymateb ynglŷn â'r memorandwm cydsyniad deddfwriaethol ar gyfer Bil yr Asiantaeth Ymchwil a Dyfeisio Blaengar. Rŷn ni wedi derbyn llythyr gan y Gweinidog Materion Gwledig a Gogledd Cymru, a'r Trefnydd, gwybodaeth ychwanegol a ddarparwyd ar ôl cyfarfod y pwyllgor ar 21 Hydref. Rŷn ni wedi derbyn llythyr gan Weinidog y Gymraeg ac Addysg, ymateb ar felinau traethodau. Ac rŷn ni hefyd wedi derbyn llythyr gan Weinidog yr Economi, sydd yn cynnwys llythyr at y Gwir Anrhydeddus Robert Jenrick, Ysgrifennydd Gwladol dros Dai, Cymunedau a Llywodraeth Leol ynghylch dyfodol cronfa ffyniant gyffredin y Deyrnas Unedig. Oes yna unrhyw faterion yr hoffai Aelodau eu codi o'r papurau yma o gwbl? Hefin David.

Therefore, we move on to item 2 on the agenda, namely papers to note. We've had a letter from the Chair of Legislation, Justice and Constitution Committee to the Minister for Finance and Local Government regarding the Agricultural Land Tribunal Wales annual report 2020-21. We've had a letter from the Chair of the Children, Young People and Education Committee regarding the Welsh Government's draft budget for 2022-23. We've had a letter from the Minister for Economy, which is a response regarding the legislative consent memorandum for the Advanced Research and Invention Agency Bill. We've had a letter from the Minister for Rural Affairs and North Wales, and Trefnydd, additional information provided after the committee meeting on the 21 October. We've had a Letter from the Minister for Education and Welsh Language, a response regarding essay mills. And we've also had a letter from the Minister for Economy, which includes a letter to the Rt Hon Robert Jenrick, Secretary of State for Housing, Communities and Local Government regarding the future of the UK's shared prosperity fund. Are there any issues that Members would like to raise arising from these papers? Hefin David.

On essay mills, I think it's worth noting that that's an issue that we need to keep an eye on as further legislative consent memorandums come in. I don't think that issue is finished yet.

No, that's a fair point. Yes, I quite agree with you, we need to keep that on the agenda.

Oes yna unrhyw faterion eraill sydd yn codi o'r papurau o gwbl? Nac oes.

Are there any other further issues arising from the papers? No.

3. Adolygiad o Reoliadau Adnoddau Dŵr (Rheoli Llygredd Amaethyddol) (Cymru) 2021 - Undebau'r Ffermwyr
3. Review of The Water Resources (Control of Agricultural Pollution) (Wales) Regulations 2021 - Farming Unions

Felly, symudwn ni nawr ymlaen i eitem 3, sef adolygiad o Reoliadau Adnoddau Dŵr (Rheoli Llygredd Amaethyddol) (Cymru) 2021. Nawr, ym mis Mehefin eleni, pleidleisiodd y Senedd yn unfrydol y dylai pwyllgor cyfrifol adolygu'r rheoliadau yma ar frys a chyflwyno argymhellion i'r Senedd. Mae'r pwyllgor hwn nawr yn bwrw ymlaen â'r adolygiad hwnnw. Ym mis Gorffennaf, cyhoeddodd NFU Cymru achos yn yr Uchel Lys am ganiatâd i herio'r rheoliadau. Caniatawyd y cais am adolygiad barnwrol gan yr Uchel Lys; mae'r achos bellach wedi cael ei wrando, ond nid oes rheithfarn wedi cael ei chyhoeddi eto. Mae'r achos cyfreithiol hwn, wrth gwrs, yn ychwanegu lefel o gymhlethdod i'r adolygiad hwn. Fydd y pwyllgor ddim yn edrych ar gyfreithlondeb y rheoliadau; rŷn ni'n cynnal yr adolygiad hwn o safbwynt polisi yn unig.

Nawr, cymerodd yr Aelodau dystiolaeth gan Cyfoeth Naturiol Cymru ar 30 Medi yn unol â'r brys a nodwyd yn y penderfyniad yn y Cyfarfod Llawn. Fodd bynnag, i helpu tystion eraill i roi gwell tystiolaeth, rŷn ni wedi aros tan heddiw i glywed gan yr undebau ffermio a sefydliadau amgylcheddol. Byddwn ni hefyd yn cymryd tystiolaeth gan y Gweinidog Materion Gwledig a Gogledd Cymru a'r Trefnydd yn ein cyfarfod nesaf.

Hoffwn i nawr groesawu ein tystion cyntaf ni heddiw. Os caf i ofyn iddyn nhw i gyflwyno'u hunain i'r record, ac wedyn gallwn ni symud yn syth ymlaen i gwestiynau gan Aelodau. Felly, os caf i ddechrau gydag Aled Jones.

We'll move on, therefore, to item 3, which is a review of the Water Resources (Control of Agricultural Pollution) (Wales) Regulations 2021. In June this year, the Senedd voted unanimously that a responsible committee should urgently review these regulations and present recommendations to the Senedd. This committee is now taking forward that review. In July, NFU Cymru issued proceedings in the High Court for permission to challenge the regulations. Their application for a judicial review was granted by the High Court. The case has now been heard, but no verdict has been issued. These legal proceedings add a level of complexity to this review. The committee will not be looking at the legality of the regulations; we are undertaking this review from a policy perspective only.

Now, Members took evidence from Natural Resources Wales on 30 September in line with the urgency noted in the Plenary resolution. However, to help other witnesses give better evidence, we have waited until today to hear from the farming unions and environmental organisations. We will also be taking evidence from the Minister for Rural Affairs and North Wales, and Trefnydd at our next meeting.

So, I'd like to welcome our first witnesses today. If I may, I'll ask them to introduce themselves for the record, and then we can move on immediately to questions from Members. So, if I could start with Aled Jones.

Bore da, Mr Gadeirydd. Aled Jones, ffermwr llaeth o Gaernarfon a dirprwy lywydd NFU Cymru.

Good morning, Chair. I'm Aled Jones, a dairy farmer from Caernarfon and deputy president, NFU Wales.

I'm a dairy farmer from Caernarfon, north Wales and deputy president of NFU Cymru.

Diolch yn fawr, Gadeirydd. I'm Gareth Parry and I'm the senior policy and communications officer for the Farmers Union of Wales.

Diolch yn fawr iawn ichi am fod gyda ni'r bore yma. Symudwn ni nawr yn syth ymlaen i gwestiynau, ac a gaf i ofyn i Hefin David yn gyntaf i ofyn rhai cwestiynau? Draw i chi, Hefin.

Thank you, both, for joining us this morning. We'll move on now to questions and I will ask Hefin David first to ask you some questions. Over to you, Hefin.

Diolch, Gadeirydd. I'd like to separate out my first question. It's about agricultural pollution, it isn't about the regulations. So, I don't want to talk about the regulations at this point, I'd rather just focus on how agriculture contributes to nitrate pollution. I've been looking very carefully at the evidence that Farmers Union of Wales have provided particularly. One of the first things that's said in your evidence is that one pollution incident is too many. I'm sure we'll all agree on that point. But, I was drawn to the table in your evidence, I think it's on page 6 of your evidence submission, in which you split the percentage of agricultural pollution incidents down by county—those that have been contributed by agriculture—and that's between the period of 2016 and 2020. One thing that's notable is that the more rural the area, the more pollution incidents are attributable to agriculture. So, for example, if I look at Carmarthenshire it's 32 per cent, Ceredigion is 36 per cent, and Pembrokeshire is 50 per cent. So, you know, it's true to say, isn't it, that agriculture, though not pan-Wales, in certain areas makes a significant contribution to those pollution incidents?

09:35

The question was directed to FUW, wasn't it?

Ie, diolch yn fawr, Aled.

Yes, thank you very much, Aled.

Thank you very much for that question, Hefin. As you've already referred to, there is a section specifically related to water pollution in Wales and agricultural water pollution in Wales in our written evidence, but I'd like to look at it more generally and look at the overall figures for water pollution incidents that are attributed to agriculture across the whole of Wales.

As you'll see in our written evidence, from the year 2016 to 2020, agriculture was responsible for 599 substantiated water pollution incidents out of a total of 3,592, and this equated to around 16.7 per cent of all water pollution incidents. More importantly, I would add that around 14 per cent of the total were low-impact incidents, 2 per cent were high/significant-impact incidents, but only 0.5 per cent were high/major-impact incidents. But also, between 2018 and 2020, the number of annual agricultural water pollution incidents reduced by 30 per cent. Notwithstanding your comment of course, agricultural pollution incidents specifically are going to increase in those rural areas where there is more agricultural activity. I would say that is inevitable. But, I would add that 49 per cent of water catchments across Wales had two or less water pollution incidents relating to agriculture during the five-year period from 2016 to 2020, and 9 per cent of those water catchments didn't have one incident during that period whatsoever. 

Just a final point on the statistics, 15 of the 22 local authorities in Wales experienced less than 10 agriculture-related cases during the period of 1 March 2016 to the end of 2020. I won't go into too much depth in comparing those figures to other sectors and industries in Wales given that your question refers specifically to agricultural pollution, but there is additional evidence in our written evidence on that. I would emphasise that these figures and your comments as well, Hefin, emphasise the fact that a pan-Wales approach isn't necessarily required given that the number of agricultural pollution incidents compared to other sectors are less, compared with some industries at least, but also in some particular areas there isn't any evidence of agricultural pollution incidents, and I think that would emphasise—

I understand that, and I can see why you would say it would make an argument for a regional approach given the vast disparity. We can understand why Cardiff is at zero and Pembrokeshire is at 50 per cent. Let's just look at Pembrokeshire to try and understand that. The city and county of Cardiff is not known as a particularly rural area. Let's look at Pembrokeshire as an example. Of the 208 pollution incidents in that period, of which half—104—were attributable to agriculture, why is that so significantly higher than other more rural areas, such as Carmarthenshire, which is at 32 per cent?

I would emphasise the point I mentioned about agricultural activity, given that these incidents that you refer to in the table relate to agriculture rather than, necessarily, water pollution in its entirety. Obviously, Pembrokeshire is an area where there is more intensive dairy production compared to other counties and local authorities across Wales. And, of course, I would guess that that would obviously have a correspondence to the number of agricultural pollution incidents. As you referred to at the start, one pollution incident is one too many, but this just simply emphasises the need for a targeted approach in these sorts of areas where there is an issue, and notwithstanding the fact that there are issues in particular areas where there is additional agricultural activity. But it also emphasises the fact that in a number of local authorities there aren't these incidents occurring, which emphasises there's less need for such regulations that are being introduced. 

09:40

No, I understand why that would lead you to make that logical point. But one key point that you can also logically make is that the greater the intensity of dairy farming, the greater likelihood of agricultural pollution.  

It's something that—. Obviously, dairy production involves greater amount of slurry production compared to typical upland cattle grazing; let's just compare for an example. I wouldn't say there's a direct correlation between all—we can't assume that all dairy farms automatically result in higher agricultural pollution. 

No, let me be clear, I'm not suggesting that, but what I'm saying is, where there is a higher incidence of dairy farming, intensive dairy farming, there's a higher incidence of pollution. That's what seems to be represented in the figures and in the evidence you just gave us in the previous answer. 

Yes. And of course—. Sorry, a final point from myself, if Aled wants to comment, or on the next question, but, of course, dairy production involves a higher number of cattle and more slurry production. And as you'll be aware, a lot of the specific regulations in this piece of legislation refers to slurry management, given that slurry tends to be the biggest issue, if you like, when it comes to agricultural pollution. Thank you very much.

Okay. Thank you, Hefin. If I can now move on to Sarah Murphy. Sarah. 

That moves me on nicely actually; thank you, Chair. So, it would be very helpful—. Maybe we can start with you this time, Aled: could you describe to us what would typically happen in a high-impact water pollution incident involving slurry? And just to say that, obviously, that is defined as a major, serious, persistent or extensive impact on the environment, or a significant impact on people and/or property.

Yes, thank you very much. I would have assumed that in your questioning of Natural Resources Wales you would have probably asked the same question. So, I think they should be responding to this particular question, but, on a practical level, on a farm level, obviously the first response is to identify where the pollution is coming from; watercourses leading off the farm would need to be blocked off straight away, and then, of course, to contact NRW—most farmers would have their number on their phones—directly, to respond very quickly. From then on, of course, it's the work of NRW to respond on an individual case. 

Thank you. And, yes, based on what NRW have told us, their data shows that, in 2001 to 2020, the number of high-impact agricultural pollution incidents has ranged from 12 to 40. So, that's an average of one per fortnight. Could you also just give us then a little bit of insight into how this would come about?

Yes, certainly, because they do categorise incidents in one, twos, threes and fours, and I'm sure you're quite familiar with these. Now, you've mentioned the ones and twos, and they would most probably be major incidents. And if you do look at the data over 20 years, there's a range in incidents between 97 and 196 over the 20-year period. And if you overlay severe weather conditions over it, there is a very strong correlation. So, major weather causes have an impact on pollution. So, they could be the inability to empty a store in very, very, very wet conditions. The structural failure of a store would be another one, under pressure. Another one, of course, that you must be aware of, is that contractors use systems where they would pump the slurry out through an umbilical system onto a tractor in the field. And there have been instances when there has been failure of the equipment in the fields themselves, and by the time that they're identified, obviously, there's been a major spill. So, that needs responding to very quickly. So I think, in general, those are the main causes of the ones and twos.

09:45

Thank you. And I suppose—. I've never seen this for myself, so what does it look like? What is it like, what does it look like, how long does it take to clean up, and do you yourself see the after-effects of that as well?

Well, it is—. You can imagine, on a farm scale, it is a major incident. First and foremost, you try and identify where, but most farmers understand where the outflows from their farms are. First, they would need to block those off, with straw bales, silage bales, to safeguard, to minimise the flow of slurry. And then, of course, there's the making sure that you then start pumping away from those areas. First and foremost, stop the leak, of course, and then address where those outflows are.

And just—like I say, how long does it tend to take to clear these up, and do the farmers themselves experience the after-effects of that, I suppose, as well?

Well, obviously, there's repair of the structure—that can't happen very quickly. And if there's correspondence to some severe weather, then you're hindered by the elements in how you respond. Farmers are very good at helping each other, and I'm sure, if I was in the same position, several farmers would come here to help me out, and I know that full well. That's the strength of the community spirit that we have in rural Wales. But do bear in mind that this is a very stressful situation if it does arise.

Thank you, Aled. And, Gareth, did you want to come in on anything to do with this as well? Like I said, I'm looking for a real kind of picture, really, of what happens when these incidents happen, and how long it takes to sort them out and everything, and the impact that it has afterwards.

Thank you, Sarah. I haven't got a lot to add, really, to what Aled has already spoken about. Thankfully, personally, at least, I've never witnessed a high-impact pollution incident relating to agricultural at least. But the one thing I would emphasise is that—and I'm sure NRW have already provided this information to yourselves, but—there are a number of tools at their disposal as a regulator when it comes to pollution incidents, and it is of course up to them which tools they use per incident, or in response to an incident. And that can be anything from issuing a warning, providing advice and guidance, civil sanctions; there's a long list of options that they have available. And I would just emphasis that, already, NRW as the regulatory body for pollution incidents in Wales have a range of tools available to them to deal with individual examples. And also, just emphasise the fact that they already have these tools available, and it emphasises how they can apply these tools in unique situations, rather than simply applying blanket measures, if you like.

Thank you, Sarah.

Os gaf i nawr ofyn i Luke Fletcher ddod mewn i ofyn rhai cwestiynau. Luke.

If I could now turn to Luke Fletcher, who can ask a few questions. Luke.

Diolch, Cadeirydd. I'd just like to move to the regulations now—and I was going to kick off by asking why, of course, you object to an all-Wales approach, but I think that's been covered in some of your answers already. By all means, if you want to reiterate any of those points, please do. But I would be interested to know what your responses would be to some comments made by Wales Environment Link—so, in the first instance, their assertion that the all-Wales approach means Wales is ready for intensification of farming into new, more sensitive areas, and it puts all farmers on a level playing field, avoiding thereby that competitive imbalance. And the second as well: your response to the assertion that, if a farm does not produce slurry, then the regulatory approach will have little impact on them. I'll start alphabetically with Aled and then move to Gareth.

09:50

Yes, thank you very much for the question, but I think we must restate why we object to an all-Wales approach. First and foremost, evidence is totally lacking as to the requirement for an all-Wales approach. And I think the line of questioning that Hefin David undertook probably highlighted that it is not a pan-Wales problem. So, that’s fundamental. And likewise, the evidence that we do have is very trustworthy. We should give credit to NRW, because the water testing that they undertake of the 952 water bodies is very, very robust. And, yes, they’re very under-resourced, but we can trust the information that comes out of NRW. That data shows that there are 113 of the 952 water bodies that are failing. And so there are some areas that have never, in the last 10 years, had any issues at all. So, for that reason, the evidence is totally lacking.

The other thing is the effectiveness of a nitrate vulnerable zone approach. You only have to look at other countries where they review the success or otherwise of the NVZ approach and, going on the evidence of water quality, it simply is not there. England have adopted 58 per cent of the land area in NVZs and Scotland 14 per cent. The rest of Scotland use what they call basic measures, which are voluntary measures that the farmers undertake for those reasons. Ulster decided to go for an all-territory approach and likewise, 10 years ago, when they introduced the all-Ulster approach, the evidence in terms of the improvement in water quality is certainly not there.

Now, going to the assertions of the Wales Environment Link in terms of it putting areas at a disadvantage, let’s be clear: the evidence, as I said earlier, certainly points to that we cannot have a disproportionate effect on certain areas, but if you unroll mitigation measures, where you target where the problems arise, then you’re more likely to get a response in terms of return on the investment that would be required there as well.

And also it’s very important to stress that, if we go for a whole-territory approach, you do undermine certain areas. And when they say that low-impact farmers should have nothing to worry about, unfortunately, regulation is regulation—30 mph is the same in Ysbyty Ifan as it is in the centre of Cardiff. Regulations state that everybody does have to adhere to them. The record-keeping, likewise, has to be intact. Now, once you bring regulation in, it’s part of cross-compliance. Cross-compliance means, therefore, that there’s monitoring. You could be drawn out for checks of record-keeping, for example, and any non-compliance would have the impact then of sanctions upon that business. So, I do not accept, really, the assertion that the Wales Environment Link have made and I think it’s unfair, really, the understanding that they’ve had.

I’ll just put this as a last point: many of our hill farms are covered now by the water regulations, and they will also have to adhere to the paperwork involved and the limits that they would have on their businesses. Now, some of these farms in the highland area would typically be grazing suckler cow herds, sheep, mixed farms, and the implications for those smaller farms of not being able to invest in the capital requirements would have serious implications on the number of cattle we do have in these upland scenarios. Now, there’s an accepted understanding of the importance of cattle in an upland setting. Biodiversity, ground nesting birds are severely impacted if the rough grasses become far more prevalent, and the lack of cattle grazing and cattle treading means that there's a reduction in the ground nesting birds. So, there are implications, and we must be aware of these long-term impacts.

09:55

Diolch yn fawr, Luke. Yes, fair play, I think Aled's covered many points there. I would just add two quick reasons as to why we are against an all-Wales approach. First of all is the masses of costs that farmers will need to incur to comply with these regulations, not only the upfront capital costs—and I'm sure we'll come on to these later—but also the annual costs of complying with the annual records, for example, and paperwork and so on, and the bureaucracy involved.

But, secondly—and I know we've referred back to this quite often in our written evidence—is the tackling agricultural pollution report of the Wales Land Management Forum sub-group, produced and presented to Welsh Government back in 2018, and that report simply demonstrated how the industry could come together to work collaboratively on how to keep some form of regulatory baseline, as we had under the old SAFFA regulations, if you like, but also build on that with a voluntary approach, as Aled referred to, and to target those areas where there is an issue in Wales. And, again, in terms of the evidence that's available, it all emphasises, of course, the need for a targeted approach rather than simply an all-Wales NVZ, using regulations that are 30 years old and do not target the need that Wales has.

Just on the first assertion on the intensification of farming in Wales, I would just emphasise that farms across Wales already face competition imbalance, if you like, simply due to the nature of farming and factors such as bad topography, soil type, fertility and so on, which has shaped the agricultural industry in Wales, if you like, and shaped the farming systems and the food production in certain areas, depending on, obviously, what those farms are suited for. Of course, there are certain areas, as we have spoken about, that are more intensive—dairy production, due to the nature of those areas and the topography, and the production involved, but applying these regulations across the whole of Wales necessarily doesn't address that competition due to the nature of farming. Nevertheless, there is obviously a need to target certain areas where there is an issue, rather than simply making the assertion that it will enable intensification in certain areas where it isn't happening already.

And, on the second assertion, on the farms that do not produce slurry, again, as Aled's referred to, there are a number of regulations set out in this legislation that refer to annual risk maps, nutrient management planning, farmyard manure management as well, annual record and calculation keeping, and also annual stock and manure records, and it's quite likely that there'll be a number of farmers who'll be seeking agencies, if you like, to complete these records for them if they do not have internet connection or do not have the IT skills to do so themselves. And, of course, there'll be an annual cost involved with that that could add up to thousands of pounds per year, notwithstanding the fact that there will be certain farmers who do produce slurry, which will obviously incur more significant capital upfront costs. Thank you very much.

Yes, just to come back briefly, Luke, on this point, these upland farms, the low-impact, low-nitrogen manure systems should really be exempt from regulations and the record keeping that will be entailed, because they do pose a very, very minimal risk to the environment, and the unintended consequences, as I mentioned earlier, are immense. Would you mind if I just read something that came out of the UK Government on the regulators' code? It says that the five principles of good regulation state that that any regulation should be transparent, accountable, proportionate, consistent and targeted. And NRW's regulatory principles are also designed to deliver NRW's commitment to the regulators' code. And just one further comment: the regulator neither regulates in a vacuum nor has infinite resources. By harmonising formal regulation with voluntary action and incentives, the attainment of shared outcomes—and I stress that, the shared outcomes—becomes a shared activity, involving many more people and membership bodies with real agency to deliver, engaged in achieving those shared outcomes. So, I do stress that I think we share the wish for the outcomes that we want, but there's a way of achieving those outcomes.

10:00

Thank you, Luke. If I can now bring in Vikki Howells to ask her question. Vikki.

Thank you, Chair. NRW has stated that enforcing pan-Wales regulations would be a massive workload, requiring between 60 extra staff to deliver the minimum viable product and well over 200 to do the full role. So, I'd just like to ask you both what your views are on that, and what the possible impact of that could be on the regulations having the desired effect. If I could start with Aled.

Thank you very much. I'm sure we are aware that the resources available to NRW are limited, and they have struggled for a quite a considerable amount of time now in being able to undertake their statutory duties. I understand the pressures that adopting an all-Wales approach will put on NRW.

They state between 60 and 200 to cover the regulations. If the regulations are not imposed correctly, it would make a mockery of regulation, and we must accept that. But, having said that, yes, I accept what NRW say, but shouldn't we also be reflecting on the hours of extra work on farming businesses throughout Wales as well? And I just wonder, if you start totting up those hours, how many extra people that equates to, and I'm sure it would be amazing the number of extra hours that would be involved. Because the farmers' work, of course, is to tend the land, the animals, the stock and making sure that the crops and everything are healthy. Anything else in addition has to be taken out from somewhere, because there are only 24 hours in a day. So, I understand that.

But, then again, if I went back to the evidence that NRW presented, of the 952 water bodies, 113 of those are failing presently. Wouldn't it not be a better use of resource if there was an officer designated in that catchment area where they are failing, and actually have a targeted approach where you address the issues at the very areas where there are problems with nitrates? In my own opinion, you would be more likely to get a better return on your input, or your investment even, where it is required.

Thank you very much for the question. I think this simply emphasises why we proposed that a targeted approach across the whole of Wales would be a much more effective way forward than simply having a pan-Wales approach that isn't regulated effectively, as Aled has mentioned. We must refer back to NRW's recommendation around four years ago that the area of NVZ in Wales should increase from 2.4 per cent up to 8 per cent, simply for the issues to be resolved in the areas where there is an issue, but also it would have enabled NRW to do that work more effectively.

I would also emphasise that one of the five key work areas that was outlined in the report published by the Wales land management forum sub-group on agricultural pollution in 2018 was to ensure that the formal regulatory regime is sufficiently robust to achieve the outcomes required. But also, with finite resources available for compliance monitoring and enforcement, the group suggested a seamless and streamlined regulatory landscape that focuses the regulator's effort and enforcement options according to risk will ensure that the greatest positive impact can be achieved in the most effective manner. In this context, it is notable, to our knowledge as the FUW, at least, that no additional funding has been provided to ensure that NRW can undertake their duties as regulator of the water resources regulations 2021. These figures also question what would happen to the other roles that NRW has as a body to deliver—things such as environmental impact assessments and regulating other pollution industries, if you like, simply—if resources were more scarce. Thank you very much.

10:05

Can I just come back very quickly?

It's very much process driven, and, actually, adhering to the paperwork would be something quite onerous on businesses. In England, for example, nearly 60 per cent of cross-compliance penalties are due to incorrect NVZ paperwork and the additional cost that that impinges on those businesses.

Okay. Thank you very much indeed. If I can now bring in Sarah Murphy, just to touch on the costs involved in complying with the regulations. I know you've touched on this, but Sarah, are there any additional questions you'd like to ask on this?

Yes. Both unions are opposed to the regulations, and a lot of it is based on cost, which you say is disproportionate. So, I was just wondering if you could briefly tell me who is likely to be the most affected, who is likely to be the least affected, and what is the alternative. Does that mean then that farms where this has happened ever would be the ones to pay? How would you prefer it to be done? How do you think it would be more fair to do this? If we can start with Gareth.

Thank you very much, Sarah. I think we've already discussed that there will be differences in costs for different farm businesses, of course—those who produce slurry in comparison to those who don't—and the capital upfront costs involved in new slurry stores, for example, to comply with these regulations. I would emphasise that the Welsh Government's regulatory impact assessment estimates the worst-case scenario to be as much as £360 million for the industry in infrastructure costs alone, and I think it's important to recognise that that figure is around £100 million more than the total income from farming in Wales in 2019 and it's a huge cost to the industry if an all-Wales approach is implemented as is being proposed at the moment.

To break that down a bit further, this equates to an average cost per active Welsh holding of around £14,500 per year, but this increases to around £37,000 for those holdings that only have cattle. This £37,000 is around £11,000 more than the average Welsh farm business income in 2019-20. But also it's worth highlighting, in reference to those costs, that those costs could be around 20 per cent higher by now given the shortage of building materials and also the number of farmers who are having quotes that are only lasting for one or maybe two months, given how prices are increasing.

Typically, you would assume that those farms that are more intensive and that produce more slurry will be those that are most affected, but also, it's worth highlighting that, given the current situation, you'll have these larger farmers with high slurry production and maybe higher stocking rates who are already seeking to buy more land or rent more land simply for the spreading of slurry—

Sorry, Gareth, to cut you off, it's just that this is in the written evidence. I suppose my question is: what's the alternative, who pays instead?

Of course, if we went for, let's say, for example, an NVZ allocation in Wales of 8 per cent, rather than 100 per cent, the Welsh Government would be able to target their grant funding to those farmers who are required to comply with the regulations and are required to build new slurry stores, for example.

I'll just move on to the funding support the Welsh Government has allocated already. They've made £11.5 million available in capital funding for agricultural businesses, and this only equates to around 3 per cent of the potential costs in the impact assessment. And therefore, as I mentioned, if we went from a pan-Wales approach to a more targeted approach, then that grant funding would be able to be used much more effectively.

Of course, there'll be costs involved, and some farmers will be required to comply with these regulations. As I mentioned, it's more likely to be those more intensive farmers. But it's also important to recognise—as Aled referred to in a previous question—that there will be a number of upland farmers who will have small cattle suckler herds who will not be able to bear these costs of around £30,000 to £40,000 for new slurry stores. Simply, the easy way out for those farmers will be to stop farming cattle.

So, as Aled has referred to, this is another reason why we believe a targeted approach would be much more effective and that those farmers should be exempt, particularly in those areas where there haven't been any agricultural pollution incidents in the past 10 years. But nevertheless, just a final point: there will be costs for farmers, we must accept that, but they're unfair at the moment, these regulations, because they will penalise those who aren't responsible and they will incur costs for those farmers.

10:10

Okay. Thank you. Aled, did you have anything to add as well? I suppose, like I said, I'm trying to drill down into what's the alternative and who will pay. 

I'll be brief. As Gareth says, the costs will be on everybody. The scale will differ depending on the scale of the business, and I think we're right to identify that the proportion of the cost to the business is likely to be greater on the smaller businesses, and I would stress that, because their output would not be so great. I think we've got to bear that in mind, and the implications that has, really, for the rural fabric if we lose some of these smaller farms who might not consider continuing with the present systems.

On the funding, I mentioned Ulster: when they brought in the whole-territory approach, there was a package of £140 million available  then at a 60 per cent grant rate. Gareth mentioned the £360 million, and that equates to something like £216 million for us in Wales, but we've only seen small amounts of money, and we've been very frustrated, really, with the deployment of the RDP over many, many years. Sadly, we're in a position now where the NVZ regulations are upon us. Many farms have found it very, very difficult getting through the planning regime, applying for extensions or even new stores, and the cost of materials. The cost inflation presently is enormous and contractors quoting for work will only give you a quotation for a month, nothing more.

Okay. Thank you, Sarah. Thank you very much. If I can now bring in Vikki Howells. Vikki.

Thank you. Just to follow on from my colleague Sarah's questions there, there is currently funding support provided by the Welsh Government to comply with the regulations, so I'm just looking for some brief comments on that, along with the impact of incorporating the regulations into the national minimum standards in future, which would need to be met to access support through the proposed sustainable farming scheme.

Shall I go first this time?

Obviously, once the regulations become regulations, of course, they are part of cross compliance, and the successor to cross compliance will be the national minimum standards. If the regulations become part of the national minimum standards, some farms might, or are likely to, be unable to access future sustainable farming scheme support, and the implications that that has on businesses.

I would like to remind the committee about the implications for tenant farmers, particularly the impact that they have on landlords not being able to fund some of the capital work involved. If they then are unable to fulfil the national minimum standards, their access then to future support would be diminished quite substantially.

So, I think the long-term implications are enormous, and I don't think this has been adequately covered within the regulatory impact assessment, either.

10:15

I'll keep it brief. One of the long-standing concerns that we've had as a union is how the current regulations and the future sustainable farming scheme will tie together. Of course, as part of the new scheme, Welsh Government will only be able to pay for actions that are over and above regulation, and therefore, currently at least, they won't be able to pay for farmers to comply with the NVZ regulations. I think the impact of incorporating the regulations into cross-compliance or the national minimum standards isn't really the issue; I think it's more to do with the influence it'll have on the options that farmers will have to be paid for, if you like, over and above regulation in future as part of the new scheme, because obviously, these regulations will become the baseline, if you like. But I would suggest to the committee to consider that alternatively, and relating back to the Wales land management forum report, it could be an option to maintain a regulatory baseline as part of the national minimum standards, as we had previously with the silage, slurry and agricultural fuel oil regulations, and using the regulations that are being implemented as they are currently. But also there could be elements of the regulations that could be taken out of compulsory regulation and incorporated into the new scheme as a voluntary approach, which would then allow for farmers to be paid for actions over and above regulation, and I think that would be a more effective balance, if you like, to enable those farmers to be rewarded, really, for complying with some of the more stringent measures.

Okay. Thank you, Vikki. If I can now bring in Sam Kurtz at this point as well. I know, Sam, that you had some questions at the end of this session; perhaps you want to cover those questions as well at the same time, so over to you, Sam.

Diolch yn fawr, Gadeirydd. Bore da, Aled, bore da, Gareth. Firstly, just for my own clarification, are you as unions objecting to policy, end of, or this policy and its implementation specifically? Aled, to you first.

Well, we've opposed the regulation in the way that it's being brought forward. I think I'd only be repeating myself in going over that ground. We are totally committed to improving water quality, and that must be certain. These are our credentials as Welsh people, as Welsh farmers, and that is paramount, but we certainly feel there is a far, far better way of achieving these outcomes that we all desire in a far better way.

Diolch yn fawr, Sam. Again, I would emphasise what Aled's referred to, and go back to what myself and Hefin said at the start—one pollution incident is one too many, but all of the tools that we have in front of us in terms of evidence, the willingness of the industry to work together, the data and obviously the huge costs of an all-Wales approach, they all go against the regulations or the reason behind the regulations as they currently stand. I think, again, we're not against regulation, but we do believe that regulation targeted in those areas where there is an issue would enable those regulations to be policed more effectively, and would result in the desired outcomes that I think we all want, which is for those pollution incidents to be reduced.

Diolch, thank you both. Aled, on a point you raised earlier with regard to the correlation between incidents and weather patterns, obviously farming by calendar is within these regulations. Are there any alternatives you as a union see to farming by calendar?

Certainly, farmers have never farmed by calendar. We farm by the season, and as we've seen with climate change issues, seasons are changing. So, certainly, we cannot farm by a calendar approach. So there must be a far better means of actually proving that in the decision-making process that a farmer undertakes before getting involved in taking slurry out on the land, there is a process by which they would follow, and I would certainly believe if that was documented in such a way that you could actually show the decision-making process was identified—land conditions, the forecasting of rain, conditions of the land at the time—all these sorts of things would impact then on the decision-making process, and we could prove that. So in Northern Ireland, for example, where they do farm by a calendar approach, there is actually a spike in nitrate levels in water at the time when the closed period begins, and at the end of the closed period, because there's a mass exodus. Now, that's the unfortunate consequence of regulations that force you to farm by a calendar approach, and I'm sure we do not wish to be in that position. 

10:20

Diolch, Sam. I would say that the farming-by-calendar element, if you like, of the regulations is one of the most limiting parts for farmers. Simply, farmers will be forced to spread slurry just before the closed period and after the closed period, as Aled has referred to, as we see in other countries. This simply increases the risk for pollution incidents, these two periods of the year. But also, the closed period for spreading slurry is obviously one of the biggest reasons why there will be a huge capital cost involved for new slurry stores to be built. But also, there are new initiatives, such as the Gelli Aur traffic light system that they have developed, which allows an app to be used for farmers to consider weather patterns, for example, and Met Office data before spreading slurry. But currently, these regulations don't allow for that flexibility, and this is one element that we think—. The regulations need to allow for this sort of flexibility, particularly as we are starting to recognise warmer summers, milder winters, rather than necessarily the four typical seasons we would have seen many centuries ago, if you like.  

Okay, excellent. You raised a point there, Gareth, on what Gelli Aur are doing, but with regard to article 45 of the regulations where it mentions alternative measures, are you as unions or as an industry working on alternative measures? What's the time frame on those, should Government allow alternative measures to be implemented? Aled. 

Thank you. The timescale that we have is set within the regulations, so as presently, the regulation states that if industry brings forward measures that will deliver outcomes that will deliver as good as or better than the regulations, then the Minister will respond to the proposals and will have to make a written statement within two years. But, unfortunately, there is no recognition of what those outcomes are and how they would be delivered. So, it's not something that there was enough clarity on so that we would have been satisfied with them. Undoubtedly, there must be some form of earned-recognition approach and, certainly, that should take into account the decision-making processes that farmers undertake on their farms. But, the timescale does now allow this.

On 1 January 2023, the national limit of 170 kg will kick in. That implication on farm businesses would need to be planned two, three years in advance. So, you can imagine that that 170 kg limit will be a de facto destocking of Wales, or farmers will require more land. Now, unfortunately, this is not going to happen, and we will see many, many farms that will be unable to comply with these regulations, and the timescale does not allow them. In the EU nitrates directive, it would allow four years, normally, for a transition period before the regulations would actually be finalised. So, obviously, article 45 does not give that flexibility. 

Diolch yn fawr, Sam. I won't add too much quickly because I'm aware of the time, but I would emphasise again—and I know I sound like a broken record today—but the report that the WLMF group published in 2018 simply—. It brought together 45 separate recommendations on what the industry believed was the way forward on tackling agricultural pollution in Wales. We do strongly believe that these recommendations and the document have been ignored in the process of creating the regulations we have currently. I emphasise, going back to this report, that I'm sure the industry would support this sort of approach, and an alternative approach to what we currently have, and to target the issues that we have in Wales.  

Diolch, Gadeirydd. I suppose I'm going to bring this back a bit to ask a supplementary, really, to a question that Sarah Murphy asked, relating to those who are going to be least affected and most affected. I was wondering if you could expand on your written evidence to the committee relating to the transitional periods set out in the regulations and that they don't provide sufficient time for farm businesses to plan and implement necessary changes. I'll start with Gareth this time, and then move to Aled.

10:25

Diolch yn fawr, Luke. Yes. I think we should be fair here and recognise and appreciate that Welsh Government have currently, obviously, introduced the regulations in three separate stages, rather than simply introducing them all on 1 April 2021, and of course this is welcomed, with the belief that this would allow for enough time for farmers to adjust and enable new slurry stores to be built and so on. But this three-year timescale doesn't come close to the severe consequences that these regulations will incur on farm businesses. I think we've already recognised that farming doesn't change over night, and it does take many years, sometimes, to change the farming system to suit regulation and red tape, but also the fact that there are a number of constraints when it comes to building new slurry stores, for example when it comes to planning applications, the costs involved, and in particular for tenant farmers. But also there's another constraint on planning when it comes to local authority resources. As we've mentioned, we've had a number of examples where farmers have gone to contact builders to carry out this capital work and quotes are only valid for a month, and also many of them are booked for a number of years beyond 1 August 2024 when the last lot of regulations will come in. So, we need to recognise the implications of these regulations and the timescale involved in becoming compliant with the vast number of regulations, really, that are coming in.

Yes, can I just quickly cover this issue of the lack of derogation for grassland farmers, which is available in England and in Scotland and in Northern Ireland? Now, the implications for Wales are huge. This transitional period does not allow for that restructuring of Welsh agriculture. Do bear in mind, likewise, the economic cost to Wales of a destocking of our cattle industry here in Wales, and the implications that has on the rural vibrancy in Wales. So, the lack of that derogation is enormous, and when you do bear in mind costs, I think that lack of derogation would be the largest cost implication for us here in Wales. Certainly, some businesses will never be able to transition from their present systems down to 170 kg, which at present—. Those farms who were in that 2.4 per cent of NVZs had that derogation available to them if they applied for it.

Okay, thank you, Luke. I'm afraid time has beaten us. The session has now come to an end. So, I'd like, on behalf of the committee, to thank both of you for giving up your time this morning to be with us. It's been a very useful and informative session, so thank you very much indeed. We will send you a transcript of this morning's proceedings, just for accuracy. If there are any issues with that transcript then please let us know, but thank you very much indeed for being with us this morning. We appreciate it very much. Thank you.

We will now take a 10 to 15-minute break to prepare for the next session, so thank you very much indeed.

Gohiriwyd y cyfarfod rhwng 10:29 a 10:45.
 

The meeting adjourned between 10:29 and 10:45.
 

10:45
4. Adolygiad o Reoliadau Adnoddau Dŵr (Rheoli Llygredd Amaethyddol) (Cymru) 2021 - sefydliadau amgylcheddol
4. Review of The Water Resources (Control of Agricultural Pollution) (Wales) Regulations 2021 - Environmental organisations

Croeso nôl i gyfarfod Pwyllgor yr Economi, Masnach a Materion Gweledig. Symudwn ni nawr i eitem 4 ar ein hagenda ni, sef ein hadolygiad i mewn i Reoliadau Adnoddau Dŵr (Rheoli Llygredd Amaethyddol) (Cymru) 2021. Dyma'r trydydd panel y byddwn ni'n cymryd tystiolaeth ganddo fel rhan o'n hadolygiad o'r rheoliadau yma. Fel yr eglurais i cyn ein dwy sesiwn banel gyntaf yn yr adolygiad hwn, mae'r rheoliadau hyn yn destun achos cyfreithiol, sy'n mynd rhagddo yn yr Uchel Lys. Mae'r achos cyfreithiol hwn yn ychwanegu lefel o gymhlethdod i'r adolygiad hwn. Fydd y pwyllgor ddim yn edrych ar gyfreithlondeb y rheoliadau; byddwn ni'n cynnal yr adolygiad hwn o safbwynt polisi yn unig.

Felly, hoffwn i groesawu'r tystion nesaf i'r sesiwn yma. Os caf i ofyn iddyn nhw i gyflwyno'u hunain i'r record, a wedyn gallwn ni symud ymlaen yn syth i gwestiynau. Felly, os caf i ddechrau gyda Rachel Sharp.

Welcome back to the Economy, Trade and Rural Affairs Committee. We move on now to item 4 on our agenda, namely our review of the Water Resources (Control of Agricultural Pollution) (Wales) Regulations 2021. This is the third panel that we will be taking evidence from as part of our review of these regulations. As I explained before our first two panel sessions of this review, these regulations are subject to ongoing legal proceedings in the High Court. These legal proceedings do add a level of complexity to this review. The committee will not be looking at the legality of the regulations; we will be undertaking this review from a policy perspective only.

So, I'd like to welcome the witnesses to this session. Could I ask them to introduce themselves for the record, and then we can move on to questions? So, I will start with Rachel Sharp.

Good morning. Thank you very much for this opportunity to give evidence. My name is Rachel Sharp. I'm here representing the Wales Environment Link network, WEL, but I'm also the director of Wildlife Trusts Wales. Thank you.

Yes. I'm also representing Wales Environment Link. I should also point out—. We've heard this morning mention of the Wales land management forum—I'm a member of the WLMF; I represent Carmarthenshire Fishermen's Federation on that organisation. We've also heard mention of Gelli Aur; Carmarthenshire Fishermen's Federation is also on the steering committee of that project. So, I can assist in both those areas.

Thank you very much indeed for those introductions. Therefore, perhaps we can kick off with some questions from Luke Fletcher. Luke.

Diolch, Cadeirydd, ac, wrth gwrs, croeso i'r tystion. 

Thank you, Chair, and, of course, welcome to the witnesses.

I suppose to kick off, then, if I could ask you to outline what are the main causes of water pollution in Wales and where agriculture fits in in terms of the range of polluters. I'll start with Rachel and then I'll move to Creighton.

Thank you very much, committee, for this opportunity. Let's get to—. The important element of this whole debate, isn't it, is around how do we stop water pollution in Wales. And that's the critical question here. And is the approach we're taking proportionate and is it going to get us the right results at the end of the day? I'm sure that's what we're all interested in. And quite rightly, your witnesses this morning talked about one pollution incident being one too many. And we can all agree upon that. So, why do we find ourselves today with over 100 pollution incidents from agriculture every year? So, that has to be addressed.

The other elephant in the room, obviously—. The problem is the waste getting into—. Our rivers are just a receptacle of everything that's happening on the land. Now, that waste is either coming from animals or coming from our good selves. The problem we have with the agricultural waste is it's in two forms: in a point form, so in other words, it comes from a very specific—usually a slurry—overspill, or it's coming from a diffuse pollution perspective, that is, that slurry is spread on the land and it goes through the soil, through the land, into the river systems. So, to me, those are the areas we have to really understand and therefore understand the data that we're getting, and is that correct data, is that covering all the incidents that are happening throughout Wales, and what are going to be the future trends as well. Because we are seeing an intensification of agriculture in Wales—are we going to see more incidents?  

You talked about, 'Are there any gaps?' I think the regulation doesn't cover ammonia and phosphate sufficiently. I don't think it covers soil pollution either, sufficiently, and also pesticides. Remember, that slurry isn't just faeces, it's also vet meds, it's also growth hormones. It's got all manner of other components in it, and that's also a real concern for us as well. So, I think what we really need to understand is that we are slowly seeing our rivers die, and the stats bear witness to that. Now, there are two major causes: one is farm waste, the other one is human waste. They both need to stop and the debate needs to be about how we stop both. This debate is around the agriculture debate, though.

10:50

Okay. Just to touch on my second point of that initial question, where would you put agriculture in terms of where it fits in the range of polluters?

It depends which river you're talking about. So, on the River Wye, we've got an intensive poultry unit issue; on the rivers in the west, the Teifi et cetera, there's a real issue with dairy waste; and then, on other rivers, obviously the rivers towards more populated areas, you get the storm overflow from sewage outlet issue. So, it's complex and it depends geographically on what river system you're talking about. 

So, we are thinking that this is a geographic issue, in that case. 

Yes. You know, obviously, both affect all. It's just the proportions, isn't it, that we're talking about—what are the main causes of the pollution within those different river systems.

Okay, thank you for that. Creighton, do you have anything to add at all?

Yes, in relation to that, where does agriculture fit in, the two main sources of pollution—there are others; forestry, urban run-off—the two main sources are clearly agriculture and water pollution from sewage treatment works. That one has become more topical recently. But, if you look at the map of Wales, you look at the map of pollution incidents in Wales, you'll see the huge concentration of agricultural incidents in the dairy farming areas of the south-west, and also to some extent up in the north-east as well, but the problem is less there. So, agriculture is up there in terms of the numbers of pollution incidents, and both major sources of pollution have to be tackled.

I have a number of follow-up questions, but I'm conscious that some of my colleagues will actually be asking the same questions that I have in terms of those follow-up questions. Rachel did allude to some of the gaps in Welsh Government's overall approach. I'm going to give you as well the opportunity, Creighton, to address that as well.

Yes. I think one of the major gaps has been there has been regulation of slurry storage since 1991, but the actual way that slurry is dealt with hasn't been the subject of regulation. That has been the subject of voluntary guidance and the code of good agricultural practice, the most recent edition of which came into force in 2011. That all changed on 1 April this year, when these regulations came into operation, because these regulations deal with the slurry spreading process—the means by which nutrient gets from the farmyard, if you like, on to the land. That is a major gap that needed to be filled because of over application of slurry in dairy farming areas, and that controlled that to some extent. Hopefully, if farmers comply, then that will diminish the number of pollution incidents that occur. The regulation of course is not only about dealing with diffuse pollution; it will also control point source pollution. So, obviously, we welcome that. 

Can I just add to that? That's the gap that's been filled. The other gaps, of course, relate to issues around ammonia and soil protection, in particular soil protection. There is nothing in there dealing with soil protection. The new regulations bring into effect chapter 5 of COGAP. Chapter 4 of COGAP deals with soil protection, and we do feel that if chapter 4 of COGAP, if some of that, was codified that would go to mitigate some of the problems caused by bad agricultural practice in relation to soil, in particular in relation to maize growing, which occurs particularly in the dairy farming areas. 

Okay. Thank you, Luke. Before I bring in Sarah Murphy, obviously I think that both of you mentioned that you feel that agricultural pollution is obviously one of the main sources of pollution here in Wales. We've received some figures from one of the farming unions that suggest that, between 1 March 2016 and 31 December 2020, agricultural pollution only made up 16.7 per cent of the total pollution incidents here in Wales. Do you accept those figures?

10:55

The problem that we have with the data—and it's something that we are concerned about—is the amount of monitoring that is going on and actually how much of this is actually being recorded. We can talk later about the resourcing that will be needed for this regulation and for its full implementation. But, I think that, in general, there is an under-recording of incidents. And, as I said, often with farming, it is the diffuse pollution incidents. Now, those are notoriously difficult to (1) detect where they are coming from and actually what the causes and consequences of those are, because it could be from one farm, multiple farms, but it is still affecting the catchment itself. So, I think that, overall, the number of incidents are very under-recorded.

Can I come in there as well?

In relation to that, the number of farming incidents is under-recorded for several reasons, one of which is the NRW call-out guidelines. Unless there is a serious incident where there is risk to human health or fish kill or fish in distress, basically, NRW are not going to turn out, and incidents are only recorded when NRW confirm that the incident took place. So, you might report an incident, NRW do not think it is of sufficient importance to turn out immediately, so, they might turn out the following day, by which time the incident has passed and they cannot confirm an agricultural pollution incident. So, I think that that has to be borne in mind.

The other thing that has to be borne in mind is this: the COVID emergency was declared on 23 March 2020 and, as a result of that, NRW didn't attend incidents; they were basically confined to barracks. So, incidents would occur and they wouldn't turn out. So, you might have incidents that were reported, but they are not confirmed, and that shows up in NRW figures. The number of reported incidents is higher; the number of confirmed incidents is lower, because of the lack of investigation by NRW caused by the COVID crisis. So, it's a two-pronged thing. It's the way that NRW respond, based on the seriousness of the incident—so, many minor incidents, or less serious incidents, don't get recorded—but also the effect of COVID on the recording of incidents since 23 March 2020.

Okay. Thank you for that. If I can now bring in Sarah Murphy to ask a question. Sarah.

Thank you. So, I just wanted to ask why you support the all-Wales approach—I suppose, by extension, what we are asking there is not the voluntary approach and not necessarily a targeted approach. So, if I could start with you, Rachel. 

Certainly. Can I start by saying that, if you are a farmer that is in full compliance in a low-risk area, I can understand why this all-Wales approach is being questioned? The reason why we have backed an all-Wales approach is because that we think that this is the most—. You can manage it and it gives a clear and consistent message, and it also futureproofs the regulation, because, remember, we are not in a static situation. But, most importantly, you are putting all farmers on the same regulation. This level playing field is not just critical in terms of just fairness, it's also quite critical in some of the other work that we are involved with in trying to get investment into Wales around the public-good agenda. Now, it's absolutely critical that we have everybody applying the same regulation across the board, because then investors then understand the regulatory baseline that they are going to be investing into. 

We can also communicate the same messages to all, and you are not questioning yourself or feeling, 'Well, hang about, I'm not within the zone, therefore this isn't an issue, so therefore I don't really need to respond.' We want all farmers to be enabled and to commit to that pledge of one incident is one too many. 

We can also look then at all-Wales solutions to issues. At the moment, we simply have too much waste for the land that we have in Wales. We need to find alternative uses, particularly in relation to chicken manure, et cetera. But it's also about really delivering an all-Wales solution into the future. Unfortunately, at the moment, there's a lot of uncertainty within the industry. We are starting to see the intensification of some areas. We're seeing more dairy units coming in, more intensive poultry units. What's to stop that industry—? Because a lot of these are external companies, multinational companies, coming in and asking farmers to enter into contract. The logic will also follow that they will therefore go into areas where there's less of a regulatory burden for them. How would you stop that type of activity? So, it's a challenge back as well. We've really supported an all-Wales approach because of the wider issues, and, as we say, we think this is under-reported. 

11:00

Thanks, Rachel, that's really clear. Creighton, did you have anything you wanted to add?

Yes, I can comment on that. In May 2020, at the Wales land management forum agricultural pollution sub-group, we heard evidence from Nic Salter from NRW, and she gave us information that NRW had a concern about New Zealand-style dairy farms popping up in various areas of Wales. You couldn't say where they were going to turn up, and basically, the practice that would happen would be that a short lease, perhaps 15 years, would be taken out in relation to a particular farm, and then, some dramatic changes would take place on that farm, including the installation of tracks, the ripping out of hedgerows, which would be in breach of some of the cross-compliance legislation. There would be slurry stores installed that would not be SSAFO compliant. And, basically, there was a huge risk of diffuse pollution taking place as a result of these actions, and they couldn't say where these farms were going to occur. 

So, really, you need to futureproof any system. The only way to futureproof regulation is to make sure that it applies cross-territory. Once you have an area where it doesn't apply, then bad practice will follow. I'm on Twitter; I haven't been on there recently, but I happened to look yesterday at a person I follow, and it's a farm in mid Wales. And the description that the farmer gives himself is 'Upland farmer in the heart of mid Wales, converted from beef and sheep to dairy.' And I know that he farms at over 1,000 ft. So, there we have a situation where, okay, the farming unions may say 'Well, you know, it's not a problem in upland areas.' Well, yes, there have always been cows in upland areas, but the farming of those cows has tended to involve farmyard manure, which doesn't carry the same problems as slurry. But it's clear that there is intensification of upland areas of Wales, intensification of farming, with the introduction of dairy farming, intensive dairy farming, and you have this additional risk of New Zealand-style farms being introduced. 

If you don't have an all-territory provision, what you'll end up with is farmers, quite legally, adopting bad practice in upland areas, and you will have a delay when legislation has to catch up with bad practice. And, to me, that seems completely unacceptable. It's very difficult for legislation to work if it's always having to follow the problem. Really, regulation needs to be there across territory for the problem to be dealt with. 

Diolch, Gadeirydd. Rachel, can I just come back to a point you made regarding growth hormones? That's incorrect; growth hormones have been banned in the UK and the EU since 1989 and 1990. So, via your remit, Chair, I would like the witness to withdraw that statement. I think it's a really important point that growth hormones are banned in Wales and the UK, and that needs to be noted, firstly.

11:05

I would. This issue of growth hormones has come up with us recently when we've been looking at intensive poultry units across the whole of the UK. We've been trying to work with the horticulture sector, and they're really concerned about different elements within the poultry manure. They're actually now looking at a case where growth hormones and different hormones have entered into the system and are actually affecting human health. Because they as a sector are actually looking at a lack of fertility in female staff at the moment. So there are concerns within the industry, and I'm just feeding back those concerns, because it's actually stopping us looking at alternative uses for that waste product. And it's a real concern for us—where are those concerns coming from, where is this coming from. 

I accept, but I'm also hearing evidence from the horticulture sector that they have concerns about growth hormones.

So, evidence at present is anecdotal, yes? And what we're looking at here is the continuous facts of the matter with regard to this specific policy around the NVZ and its implementation in Wales—correct?

Correct, but, at the same time, they are looking at legal action to try and investigate this, because they have got evidence that it's affecting women in the industry.

Okay. But there's a distinguishable difference to be made with regard to growth hormones in cattle and the slurry that you've mentioned that enters our water courses, which has been banned in the UK since 1990, and the rest of the EU in 1989. I think there's a distinguishable point that needs to be made. And one would argue that your interpretation of the evidence that you provided earlier was delivered in such a way to try and insinuate that growth hormones are used readily in British and Welsh agriculture.

That's not what I said. What I've said is there's also a gap; the gap is around ammonia and phosphate, particularly coming from IPUs in Wales. I didn't make a direct correlation with the dairy industry, and I think you're inflating my comment.

Well, I would disagree, and I look forward to the transcript on this specifically.

But is it the case that Wales Environment Link are happy for a policy to be implemented at any cost, as long as something's done, rather than the right thing is done? Because what's been discussed so far this morning by you both stretches into soil eradication, stretches into ammonia and phosphates, which are all absolutely relevant, but what we're discussing is the NVZ regulation, as set out, as being implemented. Is it the case that WEL are just happy that something's being done, regardless of it being the right thing?

Definitely not. No. The answer to your question is that we're not just seeking anything at any cost—of course we're not. We want to effect change, and we want that to effect the right change for both the climate and the nature crisis. If you want to also talk about costs, what about the costs that are being incurred to you and me, who pay our water bills? What about the cost to human health? What about the costs now we're starting to incur—? We're seeing levels are getting so high now in some of our river systems that, actually, development can't go forward. And that is going to incur costs as well onto developers.

Across the board, Wales needs this to be resolved, because the costs, and the onward cost as well that's being incurred, are not being factored in to this debate fully. And also the cost towards climate change, and also around some of that climate change mitigation that we need to effect. Because remember, these rivers then spill out into our marine environment, and we're trying to do things like develop seagrass beds. Where seagrass beds get smothered in slurry or chicken manure, then those beds become ineffective. It's a much wider debate here, and we're thinking that this regulation is actually going to enable us to be effective at dealing with the incidents. Remember, one incident is one incident too many.

11:10

I absolutely agree. And Creighton, I'll bring you in on this specific point. The evidence on NVZs implemented in Northern Ireland and those in south Pembrokeshire already have shown no material benefit to improving water quality. And the farming by calendar element has shown that spikes of nitrate occur when the open and closed periods begin, as you would have heard on the previous panel. So, isn't it the case that this isn't going to deliver those benefits that you've mentioned? And isn't it the case—you mentioned building not being able to occur because of phosphate levels in rivers—that this regulation itself wouldn't actually address the phosphate levels? It's only focusing on nitrates. So, isn't that part of the case, Creighton? 

Can I go back, first of all, Mr Kurtz, in relation to us widening the scope outside the slurry aspect of this? The question we were asked was: 'Are there gaps in the Welsh Government's overall approach to tackling water pollution?' Well, yes, we had to widen the scope because of that question; we were just answering the question. 

On farming by calendar, that's an interesting one. It's a point that the industry brings up repeatedly—that if you have farming by calendar there is a risk of a spike both before the start of the closed period and at the end of the closed period. I think people ought to read the regulations carefully here. For most farmers in Wales, the closed period is for three months; it's going to be from 15 October to 15 January. After 15 January, up until 1 February, there will be a limit on the amount or the volume of slurry that can be spread, so that mitigates the effect of the closed period. But I think what we also ought to bear in mind is that it talks about a three-month closed period, and it also talks about five months of storage. So, if the industry is emptying its slurry stores immediately before the start of the closed period, and emptying its slurry stores at the end of the closed period, then I don't think it's managing its product as appropriately as it might. There is the difference between the storage requirement of five months and the closed period of three months. That is a two-month period, where farmers can adjust, they can take account of weather conditions at the start and the end of the period. They shouldn't all be spreading at the same time, either at the start or the end of any closed period, because of the difference between the length of the closed period and the storage requirement. 

I disagree on that point, because you will have the case of—. If you look at it on an individual basis of one farmer spraying a limited amount of slurry in that certain period after the open period reopens, as you mentioned—but that's looking at it on a case-by-case basis. These are every farm being given the opportunity, as soon as the calendar allows—not when the weather allows, but being given the opportunity when the calendar allows—to go out and spread a limited amount of slurry. That could be every farmer in a certain area spreading slurry at the same time, whereas the voluntary codes, which have been drawn up with the farming unions, allow farmers to spread much more deliberately across time frames, which allow for weather variances and allow for time variances, which just don't seem to be apparent in the legislation. 

Can I say this? Slurry has been around probably since the late 1980s. SSAFO has been around since 1991, and we have had COGAP, the last edition of which—I think COGAP started in 1991; certainly, the last edition of COGAP came in in 2011. The provisions of chapter 5 of COGAP deal specifically with the conditions in which slurry should be spread, in terms of weather, slope, ground conditions. I live in a place called Ferryside in south-west Wales. I am right in the middle of the dark patch on the map of pollution incidents in Wales. For the past 10 years, you can almost predict the weather by when slurry spreading takes place. From here, down to St Clears, up to Llandovery, much slurry spreading has taken place immediately before heavy rain.

I witnessed an incident on 26 January of this year. Ironically, the day before the regulation announcement was made by Lesley Griffiths, slurry was being spread in heavy rain—it had been raining all day. It was being spread on steeply sloping ground. Heavy rain was forecast for the following day. The ground was so saturated that the ground already had clear water running off the ground into a local stream. And my local stream became full of slurry. The fields themselves were covered in thousands of seagulls as they came to feed, no doubt on worms that had come to the surface and died, and that was totally inappropriate. There were no fish killed, so the incident wasn’t serious enough for NRW to come out and investigate. They said it was of low priority. And it was allowed because the new regulations were not in place, and these new regulations are there to prevent pollution from taking place and not to deal with the consequences of it. And this was a deliberate flouting—that’s the only way to describe it—of the guidelines in COGAP.

We had two agricultural contractors who came to the Wales land management forum in October 2019, and they gave evidence of what they would describe as slurry dumping—dumping in inappropriate conditions with a view to the slurry washing off. They were quite clear about that and they mentioned the need for regulation across the board so that farmers and contractors would have a level playing field on which to operate. Now, on 26 January of this year, it was a classic example of the voluntary guidelines in COGAP not being followed and it’s for incidents like that that these regulations are needed.

11:15

I've got some questions here, but I'm going to hand back to you, if that's okay.

Yes, thank you very much indeed. Can I now bring in Luke Fletcher to ask a question? Luke.

Diolch, Gadeirydd. I do have a follow-up question relating to some of the stuff that Sam raised, but if it's okay, Chair, I just would like to come back to the point of under-reporting very briefly—I'm conscious of time.

It seemed to me that, as we were talking about the under-reporting element of incidents, this was being attributed to only agriculture and the under-reporting that was happening there. I just wanted to get some clarity there because it does strike me that, if we're saying, for example, that there was an under-reporting of incidents because of COVID, that we could attribute that to all polluters, not just agriculture. So, I just would like a bit of clarity on that point.

I think, in relation to that, of course, the water industry has strict self-reporting guidelines and NRW accept reports from what they would describe as trusted sources. So, if you have someone like the water industry reporting an incident, that would be accepted by NRW, and that would become part of the statistics as a confirmed incident. If I, as a member of the public, reported an incident, I would not be a trusted reporter and they would have to come out to confirm it, so there is a difference to be drawn. Where you have an industry that does report itself, then NRW will accept that report. Where I, as a mere member of the public, reports an incident, they really need someone to go out to confirm it. If nobody goes out, then it's not confirmed. In my particular case, I was fortunate—I had a camera phone with me; I was able to photograph slurry running off the field onto the road, into the river, and I know that NRW spoke to the farmer concerned and eventually, in September of this year, that was accepted as a confirmed agricultural incident, but that doesn't always happen.

Okay. Thanks for that clarification. Following on from the topic that Sam was asking questions around, I was particularly interested and wondering actually if you could respond to evidence from NRW on the NVZ approach on which the regulations are based. NRW told the committee that

'there hasn't been a reduction, mainly, in nitrate levels within the ground as a consequence of the designations happening. Very few areas that have been designated have actually come out of designation.'

I would very much be interested in your responses to that. I'll start with Creighton and then move to Rachel.

11:20

Yes. I listened to that evidence—Martin Cox and Bob Vaughan. What they stated was, yes, that it is difficult to detect a reduction in nitrate levels in those areas. What they also said was it can take decades for reductions in nitrate to show as a result of these measures. Martin Cox also indicated that, in terms of the previously existing nitrate vulnerable zones, there were a number of cases of reduction. There was a smaller number of increase, and there were a number of cases where there was no change. But there were more incidents of reduction than there were of increase, and they both stressed—that's Bob Vaughan and Martin Cox—the importance of NVZs to control the nitrate levels in the soil and the importance of them.

And I would agree that it takes sometimes decades to get the levels down. So, we're probably looking at too short a time period. The inference there is that, somehow, it doesn't work; somehow removing the source isn't going to work. It's highly complex. It depends on the water tables, the geology, the topography of an area of how quickly you're going to get this build-up in the groundwater out of the system. And it all depends on weather et cetera, so it stands to logic, doesn't it? If you stop the input into the system, eventually that will wash through, but it is going to take some time. So, this is an urgent issue, and we needed to have been addressing this a long time ago. So, I don't think this is an argument not to employ the regulation; it's an argument to speed up this and make sure it's effective.

Okay. Thank you, Luke. If I can now bring in Sarah Murphy to ask her question. Sarah.

Yes. I mean, I think we've covered some of this already, but just to emphasise, I suppose: how would you like the regulations to be strengthened? But I suppose, most crucially, if this is not possible, the alternative approaches that you would like to see achieve the same outcome. If we could go to Rachel again first, please.

Well, I've already alluded to—we have a growing problem of ammonia and phosphates, et cetera. We also have, because, unfortunately, with climate change, we're seeing more extreme, more frequent weather events and therefore soil erosion is a real issue. And soil picks up contaminants, but it also smothers key habitats as well for us, so it's a real issue. And that suspension, actually, in the water column also increases erosion in some instances. So, we've talked about there's a real need now to pick up on those agendas, because of the market and we're going to see even further changes in market with trade and post-Brexit consequentials.

A point I'd like to raise is really looking at—. In the agriculture Bill, we're looking at these new measures, and in Scotland, we've had this thing called general binding rules. Now, this is going to be quite important in the—. I think we need to employ as many tools as we can to make these regulations effective, because as soon as we start to get the compliance rate up, the actual cost of it and the understanding of it hopefully will address some of those concerns. So, I mean, hopefully, the committee is aware of the general binding rules in Scotland. But, effectively, what's happened is, they've really looked at trusted relationships, so, where, actually, some farmers are known to be trusted, and you can actually start concentrating on repeat offenders, and we've seen up to an 80 per cent compliance rate. So, therefore, the authorities, the Scottish Environment Protection Agency up in Scotland then can concentrate their effort on those—I don't want to suggest it's just repeat offenders. Sometimes, it's because there's been a lack of advice, there's been a lack of investment. We just need to look at the infrastructure on farm, and we need to give support. It's not just advice, it's also support. So, we need a whole range of measures to make this effective, so then, hopefully, in Wales we get to a point where, yes, we do have the regulation everywhere, because then we can apply the same rules to everybody, start communicating all of these messages, apply this across the board and, actually, instead of looking geographically, what you're looking at is compliance rates. That's where we need to get our focus, and the system in Scotland seems to have worked, an 80 per cent compliance rate should definitely be looked at, and I'm hoping that we'll get some of the rules in the agriculture Bill coming forward.

11:25

Could I ask you, Sarah, just to repeat the question, please? It wasn't very clear when it came through, and I didn't pick it up properly.

Of course, so, how would you like the regulations to be strengthened, and if that isn't possible, what alternative approaches would achieve the same outcome, do you think?

Right, if I can answer them in reverse order, I'll start with alternative approaches. You're aware that under the regulations there is provision for coming up with an alternative suite of measures. I'm on the Wales land management forum agricultural pollution sub-group. We have set up a sub-group within a sub-group, if you like, chaired by Chris Mills, in order to see if it is feasible to come up with an alternative suite of measures, and if it is to come up with that suite of measures. We're taking those provisions very seriously. It's a complex issue, and we've started looking at the regulations one by one so we can do an analysis of it, and I don't think it would be right for me at this stage to—at an early stage— come up with alternative measures when we are looking at the issue. I've heard what NFU and FUW said about that this morning, but we are taking it seriously and we are trying to come up with something. If we can't do it, we will say, 'We can't do it,' but we are looking at the issue.

As far as strengthening the regulations is concerned, again, I would probably come at it, and we would, as well, come at it in a different way to the farmers. In terms of strengthening, we would say there are other areas that need looking at. One of those is soil protection. The issues around maize are interesting. Under chapter 4 of COGAP, maize is dealt with specifically, because it does have its own peculiar problems, and evidence of difficulties caused by maize are shown, really, by—there's a Welsh Water/Dŵr Cymru scheme to fund the undersowing of maize on the eastern and western Cleddaus, which started this year. That is significant, of course, because under the COGAP guidelines, farmers should already be undersowing maize, or there should be a cover crop planted after the maize has been harvested, and yet we have a scheme being set up by Welsh Water, because they feel that it will improve the quality of water they receive if there is undersowing of maize, which obviously isn't taking place because they are prepared to fund it. It's important for Welsh Water because of, no doubt, pesticide run-off, nutrient run-off and soil run-off from maize fields. So, really, yes, we would like to see the regulations strengthened. One of the ways of doing that is to codify the relevant parts of chapter 4 of COGAP to follow on the codification of the relevant parts of chapter 5 under these new regulations.

Thank you, Sarah. If I can now bring in Vikki Howells to ask a series of questions, Vikki.

Thank you very much, Chair. NRW has said that enforcing the regulations would be a massive workload and it would require at least 60 extra staff in order to deliver the minimal viable product, and well over 200 to do the full job. So, what are your views on that and whether the regulations would have the desired effect? How concerned are you about the capacity of NRW to actually carry this out? Can I start with Rachel?

11:30

Yes, so what's really critical—. This is—. NRW are correct to raise this. Their budgets have been reduced by about 35 per cent. They are also, like all of the sectors in Wales—. You know, there has been a reorganisation over many years, but also because of what we're seeing with COVID, and there's a recruitment issue in Wales at the moment within the environmental sector. So, there's a real issue about having enough budget, enough trained staff et cetera, to be able to invoke this regulation. So, you're quite right to raise this as an issue. But, as I've already alluded to, sometimes it's a systematic look at how you manage the issue.

So, we do have a lot of compliance out there. There's a lot of—. I've listened time and time again to farmers who are compliant, who want to do the right thing, who are custodians of our countryside, are determined to address this issue. But they, time and time again, see their neighbours sometimes not complying, and it's that that you need to target. We need to target either deliberate offenders or, as I said before, where it just needs some—it's not deliberate at all; sometimes it's just a need for advice or support. And Welsh Government have already made some funding available, and I think that will be a component of the new sustainable farming scheme, going forward. But, as I say, we've got these national minimum standards being proposed in the agriculture Bill. Now, we wanted those in the Environment (Wales) Bill many years ago, because we could see how this system works. And so the general binding rules that we've seen in Scotland—if you have this 80 per cent compliance rate, then what they can then do is target why is that other 20 per cent, why are they, not coming on board. And there's a whole raft of issues. So, then you need fewer staff.

We can also employ technology. I think we haven't really got to really using remote sensing, point source sampling et cetera. That is increasing, there are investments coming from Welsh Water and from Natural Resources Wales, but, yes, let's use the technology. But, at the end of the day, I think it's that one-to-one advice and understanding your local area that's really going to make the difference. 

Yes. First of all, I'll just mention the point that Rachel made in relation to farmers—compliant farmers, good farmers, farmers who have a stable business—pointing the finger at their neighbours. We've come across that quite a bit in speaking to farmers. What's interesting is that those farmers who often make a success of all this are farmers who have permanent contracts—contracts with a particular supermarket, with a cheese producer, with Marks and Spencer or whatever. And that gives a premium on the price paid to that farmer, and it gives him a stability in his business that allows him to invest. That's just to confirm Rachel's point. 

As far as the cost of enforcement, obviously it is important that NRW have the resources to regulate. If they haven't got the resources to regulate, then the effect of the regulations is diminished. But you have to look at this on a wider basis. NRW have to regulate, but there are other ways in which advice can be given to farmers. There's the Afonydd Cymru and the Wye and Usk Foundation advice given on the two catchments in west Wales, one on the Ceri, which is a Teifi tributary, and one on the western Cleddau.

Yes, there will be resources required, yes they must be made available. And, if you want to see the effect, I suppose, of a lack of necessary investment in regulation and the operation of NRW, you can look no further than the dairy project, which has had issues with retaining staff from day one because of the way it's funded. It's funded on an annual basis. NRW say that's Welsh Government's fault. I don't know what Welsh Government say about that. But what has resulted from that is people are given one-year contracts on the dairy scheme. They then see a permanent job become available within NRW; they apply for it and they get it, leaving the dairy project short of someone who was becoming an experienced operative on the dairy project. So, that's an example of a lack of funding.

I know that, up until 15 November, I think there were five vacancies for dairy officers within the project, there was a team leader vacancy, and that's out of a total workload [Correction: 'workforce'] of 13 people. There were six vacancies. So, that shows the effect of money not being available to support a particular aspect of this, and that's why it's important that there is proper funding of NRW to make sure that they have the resources to regulate appropriately.

11:35

Can I make one further point? There's also, with the ag Bill, this idea—again, that's come through from Scotland—of these variable monetary penalties. At the moment, we don't see meaningful fines. In fact, I've had farmers say to me directly that sometimes the fines—if you get fined, it's very low, and it's almost seen as an overhead. Actually, some really meaningful fines, and there's kind of a pyramid of what would be the appropriate fine, and maybe hypothecating some of that money towards the costs—. So, in Scotland, you can get fined up to £40,000 and you can also have a custodial sentence as well, so it's a real deterrent against. And those would only be used against your repeat, deliberate kind of offenders.

Okay, thank you, Rachel. Turning to the day-to-day costs for farmers to comply with the regulations, if they're brought in, which sectors, Rachel, do you think would be the most and the least affected?

We have seen—. You know, the sector in Wales—. I was involved in a lot of work with Welsh Government around trying to predict the post-Brexit consequential and a lot of the work that was done around that. And some of the findings I was quite surprised at, and one of them was that about 30 per cent of Welsh farming is actually in true sustainability, as in it makes sufficient profit away from any subsidy. And that's because it's intensified. None of us want these big multinational corporates coming in with the IPU units in Powys, because what we're worried about is the small family farmer and the consequences on those farms. If you're intensifying, you've got to understand there's a regulatory burden. Every business has a regulatory burden; it's a given. Even as citizens, we all have to MOT our car; I dread it when my car goes in for an MOT, but we all accept that we have to do it, because we all accept that the regulation is there for a purpose.

So, one sector, you have very intensive—yes, it should be fully compliant and it should cost that in in its business case. So, what do you do with the smaller farm unit that can—? Don't get me wrong, sometimes, even if you have one or two incidents on some of the smaller tributaries, that can be just as concerning as a major incident on a major part of the tributary, and this is where I think some of the support that's coming from Welsh Government—. Because we recently saw the £44 million coming in, but, again, that has been backed up with the right advice and support as well.

Thank you. Creighton, anything, briefly, to add? I'm conscious of the time and my colleagues have other questions.

Yes. As far as that's concerned, clearly a lot of the burden of this is going to fall on the dairy industry. It's the industry where the highest number of offences has taken place. I think we mustn't lose sight, however—. I've attended—. Over the last four years, I've followed six prosecutions through the magistrates' court in Swansea and Llanelli. All involved dairy farms. One involved a huge dairy farm—it was at that time milking 1,800 cows—one involved a farm milking 700 cows, and the other four involved small family farms on small streams, where bad management or infrastructure failure resulted in serious incidents. So, I think we have to look at the issue in terms of, yes, the highest burden will fall on the dairy industry, but I think one has to look across the sector, because the issues are not confined to small dairy farms, they're not confined to the highly intensified, they are across the board, and Welsh Government and NRW have to deal with issues that arise across the board. It's not just a small farm or a large farm issue; it's an issue for all farms. The issue is: do you have enough land upon which to spread your slurry? Do you have enough storage for your slurry? It doesn't matter whether you've got 50 cows or 2,000 cows, if those balances aren't right, then the system isn't going to work.

11:40

Thank you, Vikki. Can I just come back to what you said earlier on, Rachel? I think you've mentioned Scotland a few times, and how it's working well in Scotland, but my understanding is that only 14 per cent of Scotland's geographical area is actually covered by NVZs, so it is working well in Scotland with only 14 per cent of the geographical area covered by NVZs, but you're happy, of course, then, that the whole of Wales has an NVZ. How would you respond to that?

In Scotland, obviously, you've got a wide spectrum of land use, and you're looking at anything from grouse shoots through to quite large swathes of commercial forestry, and so you've got different areas where the industry is concentrated. So, in Wales, we've got a completely different farming model, a completely different land use model. All I'm inferring therefore is that, where they've looked at this issue in Scotland, in those areas that obviously are affected by livestock, it has worked. In Wales, we have livestock throughout the country, and so, therefore, for all the other reasons we've indicated— this kind of level playing field, that everybody knows, and it applies to everybody—. And so that's why I'm inferring that. I think it is being—. Obviously, it's within the ag Bill, and we're hoping that that will come in. So, it's a counter-argument as well. If there's a system that works with livestock issues somewhere, then let's apply that, because there are livestock throughout Wales.

Okay. Thanks for that. And can I ask you both about the transitional periods that are actually set in these regulations? Do you believe that the transitional periods set out in the regulations provide, actually, sufficient time for farm businesses to plan and implement the necessary regulations, and, if so, why? Shall I start with Rachel?

So, again, it's—. This is going to affect the dairy, intensive dairy, units, a lot more than anywhere else. I'm not saying it's not affecting small farmers as well. And we have already taken measures, and, if you're in the industry, you should have already been planning to deal with this issue. You shouldn't be waiting for regulation to act. You should always be, in your forward business planning, looking to this. Unfortunately, what happens is there is a regulatory cost, companies are always trying to cut costs, and so they haven't taken the measures.

In that sense, in the intensive units, you should have dealt with this in your forward business planning. Let's get back to where we're really concerned—we're talking about the small family farms here, and about making sure that they've got enough time to prepare for the regulation. As we've already alluded to, we have seen advice over the years, varied different projects, we've also seen investment from Welsh Government. So, I think it is there. It's never going to be a perfect system, but we need to enable and support and give advice to make sure that everyone can comply.

Yes. I've got nothing to add to what Rachel said, really, on that.

Okay. Well, thank you very much indeed, both. I'm afraid time has beaten us. The session has now come to an end, so thank you very much indeed for giving up your time this morning. It's been a very informative and useful session. A transcript of today's proceedings will be sent to you both for accuracy. If there are any issues with that transcript, then please let us know. But thank you very much indeed for being with us this morning. 

Thank you for the opportunity too.

And now we'll take another 15-minute break to prepare for the next session. Thank you very much indeed.

Gohiriwyd y cyfarfod rhwng 11:45 ac 12:00.

The meeting adjourned between 11:45 and 12:00.

12:00
5. Blaenoriaethau Pwyllgor yr Economi, Masnach a Materion Gwledig - Sefydliadau amgylcheddol
5. Priorities for the Economy, Trade and Rural Affairs Committee - Environmental organisations

Croeso nôl i gyfarfod Pwyllgor yr Economi, Masnach a Materion Gwledig. Fe symudwn ni nawr ymlaen i eitem 5 ar ein hagenda, sef sesiwn banel gyda sefydliadau amgylcheddol i drafod eu blaenoriaethau. Yn yr un modd â'r paneli yn ein cyfarfod diwethaf gyda sefydliadau ffermio a lles anifeiliaid, mae'r sesiwn hon yn dilyn ymgynghoriad y pwyllgor a gynhaliwyd â rhanddeiliaid dros yr haf cyn i Fil amaeth Cymru gael ei gyflwyno. Felly, a gaf i groesawu'r tystion i'r sesiwn yma? Os caf ofyn iddyn nhw gyflwyno eu hunain ar gyfer y record, a gallwn wedyn symud yn syth i gwestiynau. Os caf i ddechrau gydag Arfon Williams. 

Welcome back, everyone, to the Economy, Trade and Rural Affairs Committee. We'll move on to item 5 on the agenda, namely a panel session with environmental organisations to discuss their priorities. In the same manner as the previous panels from farming and animal welfare organisations, this session follows the committee's consultation with stakeholders over the summer in advance of the introduction of an agriculture (Wales) Bill. So, could I welcome the witnesses to the session? Could I ask them to introduce themselves for the record? Then we can move on to questions. I will start with Arfon Williams.  

Shwmae. Arfon Williams o RSPB Cymru. Fi sy'n gyfrifol am bolisi cefn gwlad, amaeth a morol i'r RSPB. 

Good morning. Arfon Williams of RSPB Cymru. I'm responsible for countryside, agriculture and marine policy for the RSPB. 

Diolch yn fawr iawn. Rhys Evans.

Thank you very much. Rhys Evans.

Diolch am y croeso. Rhys Evans ydw i. Dwi'n gweithio i'r Rhwydwaith Ffermio er Lles Natur, a fi ydy arweinydd ffermio cynaliadwy y rhwydwaith yng Nghymru. 

Thank you for the welcome. I'm Rhys Evans. I work for the Nature Friendly Farming Network, and I am sustainable farming lead for Wales. 

Diolch yn fawr. A Rachel Sharp.

Thank you very much. And Rachel Sharp.

Hi. I'm Rachel Sharp. I'm here on behalf of Wales Environment Link and I'm the director of Wildlife Trusts Wales. 

Thank you very much indeed for those introductions. Perhaps I can just kick off with a series of questions regarding the Welsh Government's agriculture Bill and the sustainable farming scheme. Can I just ask for your views, first of all, on the proposed sustainable farming scheme, and, perhaps, your views on the Government's plans for transition to the sustainable farming scheme, which, of course, is expected to be introduced by 2025? If I can start, perhaps, with Arfon. Sorry, Arfon, you're still on mute.

I muted and unmuted myself in one tap of my computer then. 

Thank you for that. We very much welcome the proposals for the sustainable farming scheme. I think the balance of objectives of helping farming and farmers respond to the nature crisis, restore biodiversity, to tackle climate change, and also one of the key objectives of the policy being around promoting sustainable food production and supply chains, is welcome, and absolutely the direction of travel we need to go in Wales, and a good response I think to the current environmental challenges that face us in Wales. 

Quickly, perhaps one area of concern is that the overall stated objective of the policy is sustainable land management, as opposed to the sustainable management of natural resources. And given that farming and forestry occupy roughly 90 per cent of the land mass in Wales, and therefore has a huge impact on nature and the sustainable management of natural resources, RSPB and other environmental bodies are very much of the thought that this has to be very closely tied to the Environment (Wales) Act 2016 and the sustainable management of resources, because this new policy will be a huge means of delivering that Welsh objective. I think that's probably a key area that we're still uncertain about and concerned about, and we are expressing our concerns to Government. 

Transition—very quickly, I think we need a plan for transition. At the moment, there's a lot of talk about transition, but, clearly, there needs to be the plan for transition, and I think that plan needs to cover two aspects. We need to think about how we get to the start of 2025 and the launch of the scheme, and then, importantly, how we then, as a group of stakeholders across Wales, work with 15,000 or 20,000 farms and farmers to enable them to transition from the current system into the new sustainable farming scheme. I think the one thing that we need now, right across the piece, is clarity on what the operating rules are. Because I think the recent announcement relating to the working arrangement between Plaid Cymru and the Labour Party talks about stability payments and transition, but I think there needs to be a shared understanding of what we're talking about—what the transition periods are, what types of payments we're talking about.

Of course, time is short. We need to be working off the same set of rules here, really, and not revisiting arguments about what we're paying for, how do we pay for it, who benefits, who doesn't. We need clarity as soon as possible, and then we need the means of being able to work together on this to put in place these really critical plans. Because, I think, transition, if we don't get that right—. We can have the best set of objectives and scheme in the world, but if we don't get there, then it will be a wasted opportunity.

12:05

At the NFFN we support the high-level ambition outlined in the White Paper, particularly the ambition to promote agroecological farming and encouraging farming and farmers to operate within the natural carrying capacity of the land. This resonates well with the maximum sustainable output approach. It's something that the network has been promoting for some time now. Central to this MSO approach, really, is reducing our reliance on farm input and things like artificial fertiliser and imported feed—things that we know can be damaging to the environment, to nature—and encouraging farming within the holding's natural carrying capacity, as opposed to working against it, and creating a more circular farming system. Because the evidence clearly shows that adopting this MSO approach not only helps nature and climate but it also improves farm profitability through reduction in costs and taking advantage of that free natural capital that nature provides us with.

Under a sustainable farming scheme, one that would encourage this MSO approach, farmers would receive payment for these multiple environmental benefits. The difference with what we're going towards is that this would be a genuine payment as opposed to a subsidy, and I think it would truly represent value for money. Saying that, I just echo some of Arfon's concerns, really, around clarity. I mentioned it's the high-level ambition that we welcome; the detail is still lacking. And there's a sense, amongst our members anyway, that we need a bit of urgency to inform farmers as to what exactly these changes entail so that they can prepare for the future, because that transition period is really important.

If I can add as well, farming is a really capital-intensive business, so investing in things like capital support for technology and machinery, infrastructure and equipment—all these things that farmers need before a penny of income is received—is really important. So, the continuation of things like the farm production grant and the sustainable production grant would be welcomed as well.

On transition, ideally it takes around three to five years to transition to this maximum sustainable output approach, so farmers need to be supported in the meantime. It's really, really important that we get that right.

Thank you very much for the opportunity to input to the debate today. Fundamentally, the scheme is exactly what is needed to address both the climate and the nature crisis, so the scheme as a whole is really welcomed. If anything, there's a bit of a disappointment that we can't get the scheme up and running sooner. We are about to go to COP15 in April, and really want to look to a target of 30 per cent of land managed for nature. Farming is absolutely critical to that, and we see this scheme as a routeway in, not just to look at public money, but also hopefully in the future some private investment, and also cross-Government investment into this, because this is a once-in-a-lifetime opportunity. We're pleased to see that biodiversity, decarbonisation, access and agroforestry are included, although we would want to see some more detail around woodland management particularly, and also the tone of facilitating agroecology, promoting that low-input farming and encouraging farmers to operate within the natural productive capacity of the land, as Rhys has just mentioned there. So, the tone and the direction is really welcome.

As I said, we are now going to go into a period, hopefully, in the summer—I think it's been called a period of co-design. We're really hopeful that there will be some piloting there and an ability for some early adopters as well. Because the other concern is that although the scheme is due to come in in 2025, I think the idea is to transition farms slowly into the new scheme, so we could actually see a transition up to 2029. We're saying we need to recover nature in the next five if not 10 years at the longest, so the scale and pace and urgency behind this agenda isn't necessarily reflected in the timescales.

12:10

Okay. Thank you very much. Can I ask all three of you for your views on the national minimum standards as a regulatory baseline and whether they should maintain the cross-compliance requirements of the common agricultural policy, as actually proposed in the White Paper? What are your views on that? Perhaps I can come back to Arfon again.

Diolch. I think the simple answer is 'yes'. There are still gaps there, so I think there still needs to be some sort of assessment, kind of an audit of environmentally damaging activities against current legislation, to see where the gaps are. This is an opportunity to fill those gaps. I think an area that I would point towards is the prevention of further loss of semi-natural habitats. I think if we're going to hit our biodiversity and climate change targets, preventing further loss of these key biodiversity and carbon areas is really important. I think another area where there is a clear deficiency at the moment is adequate protection of watercourses from things like phosphates in soils. There'll be others as well, but I think they're—. Just embedding cross-compliance into new minimum standards doesn't mean we've got a full set of regulations; there does need to be that kind of audit, that assessment: what's out there causing environmental damage? Is it covered? If not, then we need to fill those gaps.

But I think I'd also want to say that having regulations as a backstop is really, really important. I think voluntary approaches are very unlikely to work. But I think there needs to be a package of regulation and adequate support, advice and guidance to farmers and land managers so that there's a collective approach to working with farmers and land managers to ensure that they implement what's required to stay on the right side of regulation. We are then left with those who are breaking the rules; they're clearly the ones who need a different approach. But I think there needs to be a supportive approach to implementing regulation. It's going to take resources, but it's clear that an investment in protecting is better than having to then go back and undo damage and damaging activities.

The NFFN broadly welcome the creation of the national minimum standards. I think they set a good grounding for a future sustainable farming scheme, where payments are conditional on undertaking actions that deliver outcomes above those set by those standards. I think we'd emphasise that the national minimum standards should adopt the European Union environmental principles—so, the precautionary principle, the preventative action principle, the rectifying environmental damage at source and the polluter-pays principle. They should be at least maintained with no weakening of existing legislation, really. But fundamentally, what they should do, really, is enable farmers to produce safe, healthy food whilst helping our soils, landscapes, rivers, wildlife—all our natural resources—to recover and flourish. 

I agree with Arfon that there might be significant gaps in the current regulatory system. So, undertaking some sort of audit exercise of the current regulation and identifying areas that need strengthening would be a very useful exercise. Involving farmers in this process, I think, is really important, because they can provide input to the practicalities of compliance. And just a note on compliance and enforcement: when it comes to the scheme itself, Glastir and other agri-environment schemes in the past have been criticised for being too heavy-handed. If you ask a farmer what one of his most stressful days is on the farm, he or she would probably say an inspection or an audit of the agri-environment schemes, because, quite often, they receive high financial penalties for very low-risk penalties basically. So, I think we need to get that balance right between regulation, enforcement and advice and guidance; it's really important. 

12:15

I'd like to just pick up on that last point, Rhys, that you made. We also have farms and some of the very strict, rigid rules, we want to see a move away from that, and we want to actually look at onward farm advice that's actually working with the farmer, giving that advice, being adaptive to the local farm conditions, to our changing climate et cetera. And it's really good as well to hear this idea about really enforcing those key environmental principles as we go forward. 

And, so, I really welcome the inclusion of some of the cross-compliance, particularly around soil; soils are absolutely critical going forward, not just in terms of productive farming, but also, the majority of what we see around biodiversity is actually in that top layer of soil. 

It's also important to keep—. We welcome the inclusion of standards around landscape, and also access as well, because that's really important to a lot of our members. And we also want to see this as a key requirement to go into the new sustainable farming scheme, but we need to keep it under review as well because the world around us is forever changing regulations. So, for example, we'd want to see that in light of the new control of pollution regulations.

Also, as we refine our ecological knowledge as well—. So, we're developing a section 7 list for species that we'd want to see reflected as well. And, also embedding things like—. We've got a consultation out at the moment, 'Sustainable use of pesticides', and how do we incorporate that into some of these standards? So, that review and learning as we go forward is also going to be quite critical. Yes, that's it. 

Okay. Thank you very much indeed. If I can now ask Sarah Murphy to come in to ask a set of questions. Sarah. 

Thank you, Chair. I'm going to be asking about the free trade agreements and Welsh standards. So, my first question is: what are the emerging free trade agreements, and what is the impact on the environment and Welsh agri-food sector? And, Rhys, I'm going to bring you in first because I could see from the written evidence that NFFN have specifically referenced what has happened with Australia. So, if I could bring you in, and then I'll bring in Rachel and Arfon. 

Thank you. Diolch, Sarah. Yes, I think that the wrong trade policy could potentially reduce the environmental standards here in Wales and the economic position of Welsh farmers as well. So, we need to make sure that any new international trade regime doesn't expose us to low standards, cut price competition that will drive our farmers to a race to the bottom, as the saying goes. 

So, yes, I'll point you towards a recent report from Unchecked UK. It shows that the Welsh public support strong environmental food safety standards and more welfare standards, and any political moves to weaken those, or remove regulations, especially when it comes to trade, just wouldn't be supported by the Welsh public.

And I note that the UK Parliament's Welsh Affairs Committee, in their report on the implications of the UK-Australia free trade agreement, highlights whilst there's no significant short-term impact for Welsh farming, they do acknowledge that the longer term impacts are less clear, and the committee did acknowledge the concerns that exist within the Welsh agri-food sector. And the report actually recommends that the UK Government should clarify the conditions that need to be set for agricultural safeguards to be safeguarded here in Wales over the next 10 to 15 years. 

So, yes, any future trade deals should be subject to the same scrutiny really, and again, Welsh Government should put pressure on the UK Government to ensure that this happens. 

I agree. Again, there is a lot of concern within the industry, particularly around the free trade agreement with Australia. We are reliant—. I think, from the red meat marketing board, 95 per cent of Welsh lamb is exported, and we do need market for that exported lamb. And there's a real concern. I was part of a look at the potential post-Brexit consequential on agriculture in Wales, and there was concern that up to 30 per cent land use change could be invoked, because if we do lose those critical markets for produce—. And what we were trying to do is stimulate a whole debate around, therefore, how do we increase the amount of food that is grown in Wales, is eaten in Wales, is eaten in the UK; how do we stimulate that UK market to be really proud of our high environmental, high animal welfare produce that we produce here in Wales. And I do believe that consumers are becoming a lot more aware of these issues and do want to, in some cases, pay a bit more of a premium on produce. So, yes, there's a real concern. Because although I've alluded to the 30x30, this land use change could go in any direction, and we could see a further intensification. And, in fact, the early indications are we will see an intensification in poultry and dairy, and those all have an environmental consequence if not undertaken sustainably. And so, this is of real concern, and it's adding—.

The other element to this is adding to that level of uncertainty. We've already talked about we're looking at not probably transitioning into the new scheme until 2029, but it's very unclear, going forward. So, therefore, I think, the investment and the understanding of needing to pay Welsh farmers to manage land for the public good is really critical, and that should be recognised and rewarded. Because, actually, civil society is going to need those public goods more going into the future, so holding back floodwaters more as we see more severe and frequent flood events; we need to see more carbon storage—we've seen that in the debate around COP26; and also that steady supply of water—clean water—so we can avoid drought. So, the question though is: is there going to be enough public purse to pay farmers to provide this public good? Because there's a big uncertainty around that market as well. So, I'm concerned at the increase of the uncertainty, going forward, for people trying to make decisions now for the sustainability of their livelihood and for their families going into the future. 

12:20

Diolch. I think, just to say, that trade deals can't really—they mustn't be out of step with UK governments'—and I say 'governments'; the governments across the UK—their commitments and ambitions to delivering environmental enhancements. Otherwise, we end up with this perverse position, where we've got on one hand talking about addressing climate change, restoring biodiversity, and on the other hand trade deals that serve to undermine this. And I'm aware—. I won't repeat what Rhys said, because I think he's covered concerns with the Australian trade deal very well. I'm aware we have a body in place, or some sort of group in place, that's meant to ensure that trade deals don't have this impact. There's some sort of 10-year commitment currently in place, and this is early days. I think you need to keep a very close eye on this. If the checks and measures that are put in place by UK Government don't work, they need to be revised, they need to be strengthened, so that we are moving in a direction where the food we produce is of equal quality to the food we—. No, I'll put it the other way round: the food that we import—we bring in—is of equal high quality to the food we produce in Wales. And the stuff that we import, that has to look at the complete system of that production as well. Because we've seen recently reports from Size of Wales and the WWF and RSPB on the hidden environmental footprint of food production, and the footprint that exists outside countries when it comes to soil and feed imports. We need to apply the same rigour to what we import into this country. We need to be continually asking ourselves, 'How can we drive standards up?' And this needs to be a question that's repeated right across the world, so that it's a race to the top and not a race to the bottom. 

That's really helpful, thank you. And my second question then is how this fits in with the sustainable farming scheme, and whether the proposals are appropriate in light of the emerging trade deal. And I suppose that's a bit of what you were touching on there, Rachel. So, do you want to come in first on that one?

Yes, I think it's the uncertainty and wanting to switch. I think that the wider issue here is that we've come from a system of the common agricultural policy, and in some way, that's enabled almost like a market failure, where sometimes on farms, we will see that it's been hard to make a sustainable living. We unfortunately see way too many farms that are living on incomes below £25,000. And actually, how therefore do you—. That risk and then an uncertainty around, because obviously, the basic farm payment is going to be phased out as well within that time. And the dependence therefore on what we call tertiary off-farm income and some of that is uncertain as well going forward, because it tends to be with Government bodies such as the NHS or the local school or maybe sometimes within academia. So, there's a lot of uncertainty about the future economic viability of some farms.

So, this is why I'm saying why I think the sustainable farming scheme is absolutely critical and I think it's got this right. There is an ability now I think to see further Government investment into these public goods, and not just within the environmental department, but also across the board. So, particularly flooding budgets, and I would include local authority flooding budgets within that; even the health budget—health and well-being and access et cetera. And for the very first time, there's going to be a direct contract between Welsh Government and the landowner. And I'm really hoping that will form a contract that will enable this investment. Because we should—. There's always been a concern that farmers, for example, provide the backdrop for tourism, but aren't recompensed for that or recognised for that. This could be a mechanism through which to do that. I was saying, to me, the next generation of farmers need to be our carbon heroes of the future. They've got the potential to lock in all that carbon in peatland management, in woodland management et cetera. These nature-based solutions to societal issues are there and I think that the scheme could really provide a mechanism to get that money and maintain those really high standards as well that we're very proud of in Wales.

12:25

Thank you, Rachel. Rhys, did you want to come in on that as well?

Yes. I think, we've talked about the sustainable farming scheme and the agriculture Bill, which are looking mainly at how food is produced, which is something that we definitely need to do. But I guess the missing piece of the jigsaw here really is the wider food policy in Wales. I think we need to transform our food system in Wales and we're really happy to see that the Senedd voted in favour of introducing a food Bill recently.

The Welsh Government could take a leaf out of Northern Ireland's book here in that they're consulting on a food strategy framework at the moment that is looking to adopt a food systems approach to food policy. So, looking at the elements and activities that are involved in feeding a population—so, not just how food is produced, but the production, the processing, packaging, distribution, marketing, consumption and food waste as well. So, I think we need that integrated strategy vision for food in Wales: what do we produce? How much of it is produced? Who consumes it? And the journey that it takes from farm to fork.

So, the proposed food Bill or the community food strategy—whatever it turns out to be—should work really closely with the agriculture Bill, and should focus on developing local food systems with shorter supply chains. We've been through COVID-19, we're still seeing disruption in the supply chains. So, it's highlighted the lack of resilience and the fragility of a more global food system. But developing more local supply chains needs investment in infrastructure, bringing farmers and the community along, building that sort of food culture. But the evidence shows that, if you invest in this, you address the economic imbalances in the food supply chain and ensure that farmers receive a better price—a fairer price—for their produce. This is often the reason why farmers are forced to intensify in the first place really, in an attempt to increase profits, and why we've got an industry that is so dependent on subsidies. So, I think merging both, or working very closely, Government, food, farming and environmental colleagues should be looking to work on these really critical pieces of legislation together.

12:30

Thank you. That's really helpful. And, Arfon, did you want to come in on this as well?

I did, because I think this is such an important area, isn't it? Is this the right scheme? I think that's the question you're asking, because I think it's—. Clearly, CAP hasn't worked and, you know, it's sited—or the type of farming that CAP has driven is very production based. I don't blame farmers for that. Where you've got policy in the past that's rewarded headage payments and incentivised land improvements and given big grants to it, then farmers, as business people, would follow the money. So, they've just followed the direction of policy, and that policy, and the kind of farming it's created, it's contributing to none of our ecosystems being resilient, the fact that Wales is one of the most nature-depleted countries in the world, and it's not even supporting farmers. We've got 800 fewer farmers today than we did just in 2014. These are farms that are disappearing based on the current approach. So, an argument of maintaining the current approach doesn't—. If you're talking about a three-legged stool, there are no legs on that stool, because it doesn't work for nature, it doesn't work for the environment, it doesn't work for farmers, and it's taking farmers and the economy out of those communities. So, it's not working for communities either.

So, it is time to change it. I think leaving the EU gives us that kind of once-in-a-lifetime opportunity to put in place good policy. So, the sustainable farming scheme, I think it will benefit farming if we get it right. We've heard about the maximum sustainable output. A scheme that helps farmers achieve a maximum sustainable output is going to be good for their bottom line. It's going to make them more economically viable. And if you're then farming within the natural capacity of your ground, then you're doing it in a way that's better for the environment. So, these things follow on then.

And on the objectives of climate change and restoring biodiversity under the new policy, we've had a piece of work undertaken a couple of years ago called 'scale of need', which identified that a figure of something like £270 million per annum was required to support farming to help meet our environmental commitments in Wales. So, that's a figure roughly equivalent to the CAP. So, we're not talking about taking money out of that farming system; we're talking about utilising that amount of money, and I would argue probably more if we want to have a value payment in there as well. We want to keep this money within the rural economy, within farming, but link it to this environmental benefit, and then, in doing so, link it to value for money and benefit to the taxpayer. And I think that's probably enough on that. The simple answer is 'yes', because I think if we don't do it, then we're just going to see declines across farming, the environment and nature.

Thank you, Sarah. If I can now bring in Luke Fletcher to ask a series of questions. Luke.

Diolch, Cadeirydd. I just want to come back to agricultural support for a moment, if I may, Chair. I'm particularly interested in learning what we can actually learn from other examples across the UK, but, in the first instance, I was wondering if you could outline how the sustainable farming scheme compares to other developing proposals across the UK. I'll start with Arfon and then look to Rachel and then Rhys.

Okay. Diolch, Luke. I think it's a bit of a mixed bag across the UK at the moment. English proposals are broadly similar to what we're trying to achieve in Wales, certainly in ambition anyway, in using public money to deliver public goods. My understanding is that they're talking about—DEFRA or the UK Government is talking about—90 per cent of funding for the English scheme to be linked with environmental delivery, and then 10 per cent linked to developing sustainable supply chains, food chains. So, I think similar. Where the difference might be is that—. I think, from what I understand of the scheme, it looks incredibly complex at the moment. I think what they're putting forward as an environmental land management scheme would concern me, if that's what Welsh Government opted to do, because I think it's layers, it's pillars, it's standards, it's hugely complex. And I've been involved in delivering an agri-environment scheme in a previous life, and what I learnt there is that you need to keep it as simple, keep it as deliverable as possible. Perhaps you need the complexity, but it can sit behind the scenes. But when you're talking to farmers, land managers, you need to keep this thing as deliverable as possible.

What I'm seeing in England is an overly complex approach, which I think may suffer because of that. Scotland and Northern Ireland, it feels as though there's a bit of—there is still tension there. There is a clear intention to move towards a more environmental agenda, and I think Scotland are talking about 50:50, and Northern Ireland, who I think have been behind the curve a wee bit, are now starting to talk about the need to move towards a more environmentally-facing scheme in future, whilst at the same time talking about retaining some sort of non-objective payments, which, clearly, is a concern from the environmental side of looking at this, and I would say potentially should be a concern to farming as well, because there are several pieces of research—I'm happy to share this with you afterwards—that show that flat-rate payments like the basic payment scheme and the less favoured area payment don't actually improve income security. If anything, they work against it, because it invites risky management, risky farming. It covers some of the things things that farming may have to respond to. So, that non-objective support, whilst it's quite attractive, I don't think necessarily is the most beneficial thing to support farming, going forwards.

12:35

Thank you, Arfon, and if you could share that research that would be much appreciated. Rachel, do you have anything to add?

I would agree with what Arfon is saying there, and I think we need to learn—we're quite right to look across our border; we do need that level playing field and we do need to understand not just what's happening in trade agreements but actually with support going forwards, but also to learn from some of the ELMS trials, for example. We have had the sustainable management scheme here in Wales and, as I alluded to before, we really need to be able to trial and test approaches to make sure they're fit for purpose and actually produce the outcomes that we are looking for. So, I've nothing further to add; I agree with what Arfon said.

I had a conversation with my colleagues in NFFN England and their farm members prior to this session, and they've highlighted concerns regarding the ELM scheme, that there's a lack of clarity of purpose there. Farmers are still in the dark regarding what the offer is and its longevity, lack of ambition and the feeling that the sustainable farming incentives that they're offering are just a de facto income support scheme that won't drive any real change, and the lack of information—lack of fairness, as well, and risk of creating a patchwork of support that only some farmers can access while others miss out.

So, I think Welsh Government and farming in Wales can learn a lot from this, so we need from Government—we need that clarity, we need that clear vision and a road map for farmers. We need ambition. Maintaining the status quo, like we've discussed, is not enough, and we don't need a sustainable farming scheme that's sustainable only in writing, and it needs to be flexible and open to all farmers, regardless of farm type, size, location. So, through the evidence, we know what we need to do to deliver for the environment on farms and we know that the maximum sustainable output approach can help improve farm profitability. What we need now is a well-oiled and adequately financed scheme that works on the ground. So, we should be taking advantage now—really, yesterday, but over the next few years—to trial some of these sustainable farm reviews that the Welsh Government are proposing, undertaking biodiversity or carbon audit, baseline surveys, ground truthing this, identifying any barriers or issues before the scheme is up and running, so that we're not facing the same issues that we're having in England, for example.

And we would strongly encourage the Welsh Government to trial a programme aimed at promoting the MSO concept with farmers, for example. As I say, there's a sense that all of this should have happened yesterday, and we really need to get our house in order, because we've got farmers out there who are chomping at the bit to drive genuine change in our food and farming system, but we just need the right policies and support structures in place to do that.

Thank you. You referenced a particular programme there, but I suppose that need then develops—it's sort of my line of questioning— through what exactly we can learn, then, from other countries in the UK, but, of course, actually, we should cast our net a bit wider abroad as well, in terms of agricultural support. So, I suppose what I'm asking is: are there any particular examples that you can point to of some particularly good schemes? We'll start with Rhys—[Inaudible.]—again we'll go to Rachel and then finish on Arfon. 

12:40

To be honest, I'm not particularly aware of innovative public money for public good schemes abroad. There might be; I'm just not aware of them. So, I think we can learn a lot of lessons from the New Zealand approach in terms of how not to do it, if you like, in terms of getting the transition wrong, removing direct income support overnight—avoiding that 'pull the rug' scenario. The strict environmental regulations that are associated with that in New Zealand, and the loss of farming as well, farm businesses—you know, farms becoming huge farms, amalgamating much smaller farms—is deemed to be a result of that change in policy. So, getting that transition right—and I can't emphasise that enough, really—is really important. But, hopefully, Rachel and Arfon can maybe signpost you to some other, successful schemes.

No, no, it's about successful schemes. You've got to remember, because of our unique Brexit situation, we're one of the very few countries to be coming out of the common agricultural policy. But there is a lot of science and a lot of understanding around different techniques to have an environmental carbon outcome. So, there's a lot of international practice around how you achieve that, but also on the metrics and the monetary side of actually trying to understand how you'd invoke a public good scheme. In the UK, we've got the natural capital readiness fund, for example, and also the natural capital committee. And I think we do need to pick up on that agenda in Wales, because we do need to attract that type of investment into Wales. Wales is very natural capital rich, and it's that type of investment that's going to, hopefully, give a sustainable future to land management in Wales and for the next generation of farmers. So, I think we do—. So, it's less around schemes but around more of the specifics of the schemes. 

Having said that, we also—. I agree with what Arfon was saying; this could become extremely complex and could be very off-putting as well, when you start talking this language. So, it's also that we need to learn about how you translate that through to a very workable scheme, where it's very straightforward what prescriptions, what is required of the land management, and what the reward will be. And I don't think we're there yet on that—how you translate what can be very complex systems. Like you said: how do you price carbon? We know there is a carbon market and a developing carbon market, but what's the price, how long is the contractual agreement, who are the buyers, who are the sellers, how is that contract going to work? All of that needs to be ironed out. The Wildlife Trusts, we've worked with other partners as well, with things like the peatland code and we've got the woodland code, but there are real issues, and I think the length of contract is going to be problematic. So, we also need to look at corporate social responsibility-type investment as well coming into Wales—corporations doing the right things for the right reasons, rather than wanting a carbon outcome et cetera, for their pricing. So, I would concentrate on that, rather than trying to find schemes elsewhere, abroad. 

Diolch. Thank you. Yes, I think there are good examples. I think there are examples at home and abroad, and, if I can refer to England as a foreign country without any particular nod to any politics, I think there are things like—not a scheme, but—the Fair to Nature standard, which could well form the basis of a scheme. And that talks about 10 per cent, or a proportion, of a farm well-managed for nature, and what that proportion might look like. This is alive and running in England, and it's linked to premium markets. I think the current market for Fair to Nature in England is worth something like £20 million. So, there is a—. Food produced on Fair to Nature farms, that has become quite a large market, and it's something farmers really get behind. And they see this as something positive; they can use agri-environment as a means of achieving the required standard and they're also getting that economic return through markets. So, I think there's a really good example there.

I think what's happening in Ireland, within the EU, and using CAP, is another really good example of farmers working on outcome-based schemes. We've got the Burren, we've got hen harriers, we've got projects around crayfish; these are agri-environment schemes that are deliverable through CAP. They're popular, they're effective, so I think looking at what's happening in Ireland is really useful, because there's a load of good stuff happening there. They've got examples in England and Scotland, again of using current agri-environment schemes to bring farmers together to work to put in enough habitat for things like cirl bunting, corncrakes, stone-curlews. But the key there is working at scale: farmers working together with advisers and people supporting on the ground. It's another example of how this can work. We've done a similar thing up in the Carneddau working with twite, using agri-environment schemes to demonstrate that this is achievable. There's an example in New York, in the New York water catchment—I think it's the Catskills catchment, or something—where using nature-based solutions or working with landowners to improve the way they manage their land and reduce the impact on water quality has hugely reduced the costs to the state. But the solution was sustainable land management—having the right schemes, the right actions in the right places, but again, importantly, working at scale.

So, I think the take-home message from me, with all of these schemes, is it's about providing the right support and the guidance, working with farmers, working at scale, working on clear objectives. It's putting together these kind of supportive packages. You could say, with Tir Gofal and Glastir, potentially, that there's a lot of good stuff in there. It's failed because it's been overly prescriptive; there's been an emphasis on setting up schemes and not, then, the really important bit of working with farmers to deliver what these schemes are all about. So, I think there are lots of good examples, home and away, that we can refer to.

12:45

Thank you. Thank you, Luke. Can I now ask Vikki Howells to come in and ask a question? Vikki.

Thank you very much, Chair. Something different to throw into the mix, and that is horticulture. The Minister has said that there is massive potential to develop horticulture in Wales, which obviously is a really, really small part of the sector currently. So, I wondered what your views were on that. Is the potential as great as the Minister says, and where should we be focusing on? I don't know who wants to start; maybe Rhys?

Diolch, Vikki. Yes, I think there's huge potential for horticulture in Wales. I think currently, we only produce enough fruit and veg to supply a quarter of a portion per head of population per day. So, that's extremely low, but it would only need 2 per cent of Wales's total land to meet that five-a-day requirement for the Welsh population. So, yes, there is definitely scope to do it.

I think some of the barriers to date have been that a lot of horticulture farms are small farms, and they are missing out on funding through agricultural policies. You've got that 5 hectare limit, minimum size, in terms of receiving the basic payment scheme, so removing some of those barriers could help promote the uptake of horticulture, fruit and veg production, in Wales. And I think we need to do this as well. Going back to my point around the fragility of the global food system, we need to produce more of what we should be eating in Wales. But this needs investment, I think. Asking farmers just to transition to a new form of farming overnight isn't going to be possible; it needs investment in infrastructure, the equipment, machinery, the training, advice and guidance as well. And that's why, again, it's so important that the food Bill aligns well with the ag Bill in support for farming.

I think if we we're serious about feeding a nation, then we do need to start looking at producing some alternative foodstuff in Wales. But it needs that political backing and support to do it through policies. And just to bring this back to nature and the environment, I think growing more grain, fruit and veg, and having a more diverse landscape, will inherently benefit nature and the environment, because nature thrives on that diversity in the landscape. Our landscape, I would argue, has become a bit too specialised over the last couple of decades, where we're concentrating on a limited number of agricultural commodities. So, creating that diversity in the landscape will benefit seed-eating birds like the yellowhammer, turtle doves, which we've really lost in Wales, tree sparrows—bringing that sort of habitat back will lead to a more vibrant, nature-rich countryside as well.

And just a last note: I think Government public procurement has a huge role to play here. Farmers might be afraid of going into the horticulture market because they don't have a solid or long-term market for their produce, but if the Welsh Government, through their public procurement process, can encourage farmers to supply local fruit and veg for schools, for hospitals and other public organisations, then that can help drive the uptick of horticultural production in Wales. 

12:50

Thank you. That's really useful, particularly the last point, because the worries around the market was something that farmers unions had raised with us previously. So, that's really useful, thank you. Arfon, anything to add?

I'll be honest with you—not a huge amount. I completely support Rhys's response there. I think the one thing I would perhaps add is that there needs to be that clear link between food and farming. So, if we are going to go down the route of a food strategy or food Bill, they need to be linked. There's a great opportunity here for the two to build and support sustainable supply chains. But I think at some point in Wales we probably need to look at how we integrate not just food and farming, but tree planting, space for nature. We're looking at the need for some sort of land use strategy at some point that looks at all of these things, because we do need a means of ensuring that we make space for people, for nature, for trees, food access, all of these things. We need to get really joined up on this, and I think we need to look for those win-win opportunities so we don't end up with nature over here, farming over here, trees over here. Wales is quite a small country, but I think we need to find space for all of these things within the country, and that means integrating and doubling up and layering over. But I'd agree with pretty much everything Rhys said. And on public procurement, there's no reason why that can't extend to meat and dairy as well. So, I think there are opportunities there to support sustainable food production right across the piece in Wales.

Thanks. I know we're very short of time, so Rachel, do you have anything different to say?

I completely agree with what Rhys and Arfon have said. The only thing I'd add to it is maybe there are reasons why that market isn't in place. We need some research into some of the evidence around that. There are barriers there. And I think also being able to use technology; sometimes we talk about hydroponics, and actually putting food production where people live, and also enabling that community production. That doesn't necessarily mean for it to be separate from farming. It could also be incorporated and encouraged. Definitely I agree with Rhys around mixed farming. We talk about the public good, but also, that doesn't preclude food production, and in fact, how do we create those local links? Because everybody wants to see this in Wales, so we're also going to have to invest in making those profit margins viable, so some of the distribution networks and some of the processing networks will probably need investment as well to make this happen. 

Thanks, Vikki. I'm very conscious of time, so if I can just ask our witnesses to be as succinct as possible. If I can now ask Sam Kurtz to come in to ask a question. Sam.

Diolch, Gadeirydd. I've found this session incredibly enjoyable, because I think there has been a misconception that agriculture and conservation, environmentalism, have been at opposite ends, but there is discussion now that they are both sides of the same coin, so that's really encouraging. Arfon, the visit I had to Gwenffrwd-Dinas instilled that right at the beginning of my terms as an MS.

I'm looking to discuss agroforestry and where we are in Wales at the moment with businesses from outside of Wales purchasing food production land for the plantation of trees. I'm just looking at you, panellists, for your thoughts on that. Arfon, I'll start with you. 

12:55

Okay. Very quickly, I go back to my point around a land use strategy. We need to have space in Wales to produce food, to plant trees—the right tree in the right place, quite clearly—and also for nature. I think where we do that needs to involve local communities. There's plenty of evidence and there's loads of stuff coming out from the Woodland Trust and elsewhere to show that you can integrate woodland planting into a landscape; you don't need to dominate landscapes with trees. I think the challenge we have ahead of us is how we do this in a way that enhances landscapes and communities, and doesn't detract. I'm very aware of the issues, and I think it's something we need to have a collective response on in Wales. 

Diolch, Sam. Yes, it's certainly an issue, large corporations buying up farmland to plant with trees, and not just on productive agricultural land, but also on valuable wildlife habitat as well. We're talking about the right tree in the right place, but I think we can add another dimension to that now—the right tree in the right place by the right person, or by the right people. Involving local communities is really important. There's so much potential for alternative farmland habitats to sequester carbon—hedgerows, marshy grasslands, hay meadows. I think the Government see tree planting as a silver bullet to tackling climate change, and in this mad rush to take this blanket approach to tree planting, we're missing the bigger picture. A sustainable farming scheme should be looking to reward farmers appropriately for delivering carbon sequestration, in line with nature-based solutions. That's another concern, I think—that decarbonisation and carbon sequestration are given more emphasis than nature restoration, where you can argue that nature restoration is as important, or even more important. We can tackle climate change, but if nature isn't present, it's still an unviable planet to live on. 

Excellent. Diolch, Rhys. And Rachel, you mentioned earlier as well around the carbon credit market. I think that's a valuable point that you've touched on, but if you could expand on that in your answer as well, I'd be grateful. Thank you. 

I think what the concern is, and I think it's coming from communities, is this unknown, unmeasured influx of investment coming into Wales, but very much done to communities rather than with communities. I think that's quite rightly where the concern is. I've spoken to Lee Waters on this; the problem is that it's private land and it's very hard to affect that change, but one of the drivers is the presumption that therefore they could gain woodland grants in the future. And I think that is controllable, because I would like to see more involvement of the third sector in this to really involve communities, so they have more of an involvement, more of a say around this, and actually directing—. If you're trying to sequester carbon, if you restore all the peatland in the UK, you sequester more carbon than all the trees in the UK, and in France and in Germany. Peatland is where it's at for carbon, and marine sediments is where it's at for sequestering carbon. So, how do we stimulate the right type of activity, and how do we control this market intervention that we're seeing at the moment? I think we need to get an idea of the scale of this, because at the moment there are concerns that this could increase—that a Brexit consequential could be an increase in commercial woodland.  

What I'm really concerned about there, with commercial woodland, is that, okay, we do need more construction timber, certainly, and we need a mixed use of forestry and national forest. Wales is globally significant for the Celtic rainforests and the Atlantic woodland along our western seaboard. We should be looking at investing into that as a habitat type, because we are globally significant for that. And actually, commercial woodland, as soon as you cut the wood, then you lose that carbon value unless you're putting that into long-term construction. So, we need a really honest conversation. There's an overfocus, even from Welsh Government, with your 10 per cent target, and I think that is causing concern within communities, because that's quite a big chunk of land use. But I agree with Rhys; a lot of that could be the hedges and edges, where we could put some of that, and we need to concentrate on reconnecting and building more resilient woodland ecosystems by restoring ancient woodland and that Celtic rainforest. We have our own rainforest. This is something we should be shouting from the rafters about, and really investing in and understanding our global significance, and using it as a tool for tourism, for example. So, I agree with the concerns. I think we need to build more evidence and I think we need a real, close examination of what mechanisms we have to stop the wrong type of investments that's done to communities.

13:00

Excellent. Thank you very much, Rachel. I think there is evidence to suggest that the number of people outside of Wales accessing Glastir grants has increased over the last 12 months, so there is definitely a shift there. Chair, I'm happy to pass back to you. Diolch yn fawr. Thank you.

Thank you very much indeed, Sam. I'm afraid that time has beaten us, so this session has now come to an end. We did have some questions around monitoring the environmental impacts of agricultural schemes. Perhaps we will write to you with some of those questions, and if you'd kindly respond to those questions, that would be very much appreciated. But thank you very much indeed for giving up your time today. This session has been very, very useful and very, very informative. A transcript of today's proceedings will now be sent to you in due course, just for accuracy, so if there are any issues with that transcript then please let us know. But thank you very much indeed for being with us today. Thank you.

6. Cynnig o dan Reol Sefydlog 17.42(ix) i benderfynu gwahardd y cyhoedd o weddill y cyfarfod
6. Motion under Standing Order 17.42(ix) to resolve to exclude the public for the remainder of the meeting

Cynnig:

bod y pwyllgor yn penderfynu gwahardd y cyhoedd o weddill y cyfarfod yn unol â Rheol Sefydlog 17.42(ix).

Motion:

that the committee resolves to exclude the public from the remainder of the meeting in accordance with Standing Order 17.42(ix).

Cynigiwyd y cynnig.

Motion moved.

Fe symudwn ni nawr i eitem 6 ar ein hagenda, felly dwi'n cynnig yn unol â Rheol Sefydlog 17.42 fod y pwyllgor yn penderfynu gwahardd y cyhoedd o weddill y cyfarfod hwn. A yw Aelodau'n fodlon? Ydw, dwi'n gweld bod Aelodau'n fodlon, felly derbyniwyd y cynnig a nawr fe symudwn ni i'r sesiwn breifat. Diolch yn fawr iawn ichi.

We move on now to item 6 on the agenda, so I propose in accordance with Standing Order 17.42 that the committee resolves to exclude the public from the remainder of this meeting. Are Members content? Yes, I see that Members are content, so that motion is approved and we'll move into a private session. Thank you very much.

Derbyniwyd y cynnig.

Daeth rhan gyhoeddus y cyfarfod i ben am 13:02.

Motion agreed.

The public part of the meeting ended at 13:02.