Pwyllgor yr Economi, Masnach a Materion Gwledig

Economy, Trade, and Rural Affairs Committee

09/05/2024

Aelodau'r Pwyllgor a oedd yn bresennol

Committee Members in Attendance

Hefin David
Jenny Rathbone
Luke Fletcher
Paul Davies Cadeirydd y Pwyllgor
Committee Chair
Samuel Kurtz
Vikki Howells

Y rhai eraill a oedd yn bresennol

Others in Attendance

Aled Jones Undeb Cenedlaethol yr Amaethwyr Cymru
National Farmers Union Cymru
Alex Phillips Cyswllt Amgylchedd Cymru
Wales Environment Link
Andrew Tuddenham Fforwm Organig Cymru
Wales Organic Forum
Dennis Matheson Cymdeithas y Ffermwyr Tenant
Tenant Farmers Association
Dominic Hampson-Smith Ffederasiwn Clybiau Ffermwyr Ifanc Cymru
Wales Federation of Young Farmers Clubs
Gareth Parry Undeb Amaethwyr Cymru
Farmers Union of Wales
James Powell Educ8
Educ8
James Richardson Pwyllgor Newid Hinsawdd y DU
UK Climate Change Committee
Jemma Parsons Academi Sgiliau Gwyrdd
Green Skills Academy
Matt Rees ColegauCymru
CollegesWales
Yr Athro Janet Dwyer Prifysgol Swydd Gaerloyw
Gloucestershire University
Rhys Evans Rhwydwaith Ffermio er Lles Natur
Nature Friendly Farming Network
Rhys Owen Tirweddau Cymru
Landscapes Wales

Swyddogion y Senedd a oedd yn bresennol

Senedd Officials in Attendance

Evan Jones Dirprwy Glerc
Deputy Clerk
Gareth David Thomas Ymchwilydd
Researcher
Katy Orford Ymchwilydd
Researcher
Lara Date Ail Glerc
Second Clerk
Robert Donovan Clerc
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 09:31.

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

The meeting began at 09:31.

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

Croeso, bawb, i'r cyfarfod hwn o Bwyllgor yr Economi, Masnach a Materion Gwledig. Dwi ddim wedi derbyn unrhyw ymddiheuriadau y bore yma. Oes yna unrhyw fuddiannau yr hoffai Aelodau eu datgan o gwbl? Na.

Welcome, everyone, to this meeting of the Economy, Trade and Rural Affairs Committee. I haven't received any apologies this morning. Are there any declarations of interest that Members would like to make at all? I see that there are none.

2. Papurau i'w nodi
2. Papers to note

Symudwn ni ymlaen, felly, i eitem 2, sef papurau i'w nodi. Mae yna nifer o bapurau i'w nodi y bore yma. Oes yna unrhyw faterion yn codi o'r papurau yma o gwbl? Na.

We'll move on to item 2, which is papers to note. There are a number of papers to note this morning. Are there any issues arising from these papers at all? No.

3. Y Cynllun Ffermio Cynaliadwy - Undebau Ffermio
3. Sustainable Farming Scheme - Farming Unions

Fe symudwn ni ymlaen, felly, i eitem 3 ar ein hagenda, sef edrych ar gynllun ffermio cynaliadwy'r Llywodraeth, ac mae hyn yn adeiladu ar waith craffu blaenorol a wnaed gan y pwyllgor hwn, a'r Pwyllgor Newid Hinsawdd, Amgylchedd a Seilwaith. Dyma'r cyntaf o dair sesiwn dystiolaeth heddiw ar y cynllun ffermio cynaliadwy, ac a gaf i, felly, groesawu'r tystion i'r sesiwn yma? Cyn ein bod ni yn symud yn syth i gwestiynau, gaf i ofyn iddyn nhw gyflwyno eu hunain i'r record? Efallai y gallaf i ddechrau gyda Dominic Hampson-Smith.

We will move on, therefore, to item 3 on our agenda, which is the sustainable farming scheme, and this builds on previous scrutiny work carried out by this committee, and the Climate Change, Environment and Infrastructure Committee. This is the first of three evidence sessions today on the sustainable farming scheme, and may I, therefore, welcome witnesses to this session? Before we move to questions, may I ask them to introduce themselves for the record? Perhaps I can start with Dominic Hampson-Smith.

Good morning. My name is Dominic Hampson-Smith from Wales Young Farmers Clubs.

Diolch yn fawr, Gadeirydd. Bore da, bawb.

Thank you, Chair. Good morning, everyone.

Gareth Parry, head of policy for the Farmers Union of Wales.

Bore da. Aled Jones, llywydd NFU Cymru.

Good morning. Aled Jones, president of National Farmers Union Cymru.

Dennis Matheson, Tenant Farmers Association Wales, and a tenant farmer as well.

Thank you very much indeed for those introductions, and perhaps I can just kick off this session with a few questions. Now, of course, the Welsh Government tells us that they've been consulting on this scheme for many years and that they've carried out co-design exercises and established specialist working groups. In those circumstances, why do you think that this process hasn't worked, because, obviously, we've seen farmers protesting over the last couple of months, and we saw a massive protest outside this Senedd? Why do you think, therefore, that this process hasn't worked? Who'd like to kick off with that? Aled.

Yes. Thank you, and thank you for the opportunity to discuss this very, very important matter. The upswell in emotions that we've seen in the past few months has been building in the industry for a considerable amount of time, and you could say, as a backdrop, there is the frustration within the industry of what's been happening with tuberculosis and nitrate vulnerable zones and Habitat Wales as well. So, when the consultation arrived, just before Christmas, there was a matter of shock regarding what was contained. Now, it shouldn't be this way, simply for the reason that we've been consulting on a successor common agricultural policy scheme for a number of years, and everybody on this board over here has been part of that discussion. So, what took us by surprise, really, is, considering the amount of input that farmers and organisations have put in for a number of years, there hadn't been any bearing in resemblance into what was contained within the consultation itself. So, it was a lost opportunity, to be perfectly honest with you. And we are facing a period of time now where there is an urgency. If the Cabinet Secretary is pursuing the launch of the scheme for 2025, there's a lot of work to be done in a very short period of time. So, I do hope that we get to a better resolution.

And what would you like to see the Government doing in terms of engaging with the industry?

09:35

Well, obviously there's been engagement in the past, and the Cabinet Secretary set up a round-table, which is good—fair play—and we do hope that that round-table will include people who have experience, practical experience, of farming, that they have business understanding, people who have the understanding of what is contained in designing policy and implementing policies as well, which is crucial. If we have too large a group—and I've got experience of this when we went through the Brexit round-tables many years ago—there were many, many people around the table and not much was done, unfortunately. 

Yes. Just to elaborate, I think it's fair to say that we've been involved in a stakeholder group to discuss this scheme for a number of years. However, that group has been rather broad. It's been useful, it's been informative, however, it hasn't necessarily had the opportunity to discuss individual aspects of this scheme throughout the process. So, what we have called for in response is a small focus stakeholder group to take this forward. As Aled has alluded to, we welcome the news that a round-table group will be established. Of course, we'll need to discuss the terms of reference of that group.

Yes, and the engagement we've had with the Cabinet Secretary to date has been positive, but, of course, we have to emphasise the point that that group now has to discuss elements of the scheme for radical change, not touching the edges and around the sides.

Can I just add that there were working groups to be set up? Unfortunately, a working group on cross-border farms did not get off the ground. Next generation—. There's very, very little interaction with the next generation as well. There was a stalling on common land—the implications for common land—as well. The tenancy group did start off, and there were purposeful meetings there, but the working groups haven't really been driven all the way through the process.

That's very worrying. I just wanted to just explore whether farmers with lived experience of farming have been included in whatever work has been done in the past, under Lesley Griffiths.

Well, the commitment to co-design came about in the last consultation, which we applauded. There were several, or many, groups around the country—nearly 1,600 were part of these co-design groups. The report on the culmination of that work was presented to us last July; there are 160-odd pages. That should, really, in some ways, bear what was contained within the last proposals or the last consultation, but it did not reflect the responses of the 1,600 within those co-design groups.

And have you had an opportunity to discuss the sustainable farming scheme with the new Cabinet Secretary?

Yes. Yes, we have, on more than one occasion since his appointment. However, as you can imagine, there's only so much you can discuss on such an in-depth scheme within an hour or so, which is why, again, I emphasise the importance of having this round-table group now to take this forward. But, I'd just like to emphasise that this has to be done rather quickly, in the time frames that are presented to us. So, we really need to get this off the ground as soon as possible.

Diolch, Cadeirydd. Good morning, panel. I wanted to delve into a little bit around the payment methodology, if I could, and knowing that there's no budget put on the sustainable farming scheme, I was just wondering what your views are on the proposed payment methodology. Dennis, I'll start with you, as to the tenants association.

For the new scheme, you mean? Yes. I attended all the round-tables in the previous consultation and it went on for about four years, I think, and, as Aled said, there were too many people on it. There were about 40 people, all different parts of the industry. You couldn't ever get a consensus. The emphasis was always on environmental rather than on farming. It was difficult for the farming representatives on that to have a say, really. And, from the beginning, for about two years, I kept bringing it up but there was no mention at all of tenants and tenancies until I brought it up, and, in the first paper that came out, there was a very, sort of, vague outline of what was to come, and no mention of tenancies, so I made a big fuss about it and it was amended and put in. But, going forward, smaller groups, so that a consensus can be reached. As far as tenancies are concerned, I don't know whether it's solvable, because the Welsh Government have had five years since I first mentioned it to come up with a scheme that tenants can access, but, this scheme, tenants cannot access. They've got copies of my personal tenancy agreement, which is a typical one throughout Wales, and you're stuck by tenancy law, the definition of agriculture and individual tenancy agreements, because they could override everything else. And I'm not sure a scheme like this is solvable for tenants. It would have to be a different scheme, or it would have to exempt tenants from anything they can't do, which wouldn't be fair, would it?

09:40

Yes, just on a broader concept in terms of payment methodology, the Welsh Government has assured us since the beginning of these discussions that the payments would go beyond costs incurred and income forgone. Now, what is currently being proposed is precisely that, with the mooting of a social value payment within that methodology. Now, the fundamental of this, really, is the payments under this scheme will have to compensate for costs incurred and income forgone, in addition to compensating for the loss of direct farm support. And that is absolutely crucial, because if farm businesses are economically sustainable, they'll be able to invest in environmental goods and other things. If you look at the modelling report to date, it's only focusing on the social value of environmental outcomes; it's not focusing on the value of food production, for instance, and all of the other contributions that we make. And, of course, based on that modelling, there's a risk that a social value payment could create an element of a postcode lottery, where payments differ between different parishes across Wales. 

So, that would be your view on the social value element of it—that it's not concrete enough to deliver uniformity across farm businesses, for them to be able to invest, plan ahead, budget, et cetera. 

Yes, I think there is a concern that adding this quite complex matrix, actually, into this payment methodology could become overly complicated. And I think it's fair to say—and the Welsh Government would say this—that there's still no clear pathway yet as to how this matrix could be incorporated. And it's a huge concern of ours, given, again, the timescales that we face.

Okay. Aled, NFU's thoughts on payment methodology and social value payments.

Well, Gareth referred to the thought that social value was related to the delivery of environmental outcomes, but I would probably take you back to the agricultural Bill itself. The four sustainable land management objectives are the core principle of designing this scheme. We are designing a replacement for CAP schemes; it is not an environmental scheme. It's for delivery for the whole industry, and that should underpin the stability of the whole industry. On the principles of the SLM, the first and foremost of the sustainable land management objectives is to produce food and other goods. The second one is to mitigate and adapt to climate change. The third one is the objective to maintain and enhance the resilience of ecosystems, and the fourth is to enhance the countryside and cultural resources. They have to be delivered in conjunction with each other. And it says, within the agricultural Bill, they have to be delivered in parallel together. So, the social value has to encompass all of those SLM objectives, and the first one, of course, is the resilience of farm businesses. So, the objective of the Bill is to maintain the resilience of farm businesses, and only viable businesses—only viable businesses—underpinned by a support system that underpins that ability to be viable, and the vibrancy of the industry is crucial for us.

Okay, thank you. But on the cost incurred and income forgone model, as FUW and Gareth have mentioned, it needs to be above. 

Yes, let's be clear, because when the zero incentives in the costs incurred and income forgone model were shared within the consultation, there was an element of surprise for us, because we'd always been told there would be an incentive within the scheme and would go beyond costs incurred, income forgone. And, to be clear, there'll be zero margin—zero margin. So, where are the incentives? And I will guarantee you, if the industry was seeing the incentives, they would deliver the outcomes as well. So, I think that's a challenge for the Welsh Government, to design this scheme in a way that is better reflective of the appreciation of the industry. 

Brilliant. And this is a question to whomever in the panel feels most able to answer it: Soil Association Cymru have said that very small farms, such as small-scale horticulture producers, are unlikely to receive sufficient financial incentive from an area-based universal baseline payment model. I was just wondering if any issues have been raised around small-scale farms with the current proposals.

09:45

Well, it's the practicalities, to be honest with you, isn't it? Seventeen universal actions on a small-scale farm would be very impractical, and I'm sure Dom would probably relay this as well. I think that has to be borne in mind. And it's the cost implications as well for those businesses. Some of them are impractical—totally impractical.

Yes. I think it's just adding to that, really. There are some of the universal actions that consider all farms the same, essentially. CPD, for instance—whether you're a limited company or a sole trader, you're expected to do the same number of hours. Now, we would be supportive of a system of redistributive payments—payment capping, for instance—that would support the smaller family farms, as we had under EU rules, essentially, which could be a mechanism that could help at least to address the concerns you've raised.

Okay, thank you. Dominic, a question specifically for you and young farmers and new entrants and young entrants to the industry. I saw you shake your head to a question from the Chair earlier about engagement with the new Cabinet Secretary, so I take that as that Wales YFC have not had any engagement from the Cabinet Secretary to date.

Yes. Thank you. Yes, that is correct, yes. The rest of the panel have said they've been in this process for many years now, and it's fantastic to see you've got a great balance of people here, but as Wales YFC we have continuously felt out of the loop. With the consultation coming out, as we said, back before Christmas, and going through that, we've always been on the edge. We've never been involved in any sort of meetings. We have not had any correspondence with any of the Cabinet Secretaries or anything along those lines. I'm very thankful for the opportunity to come along today, as I said when you invited me along before to a previous meeting, but it does feel like we are on the outside quite a lot, and—

Can I ask on that, then, feeling on the outside, do you feel that the proposals as they are incentivise young farmers at all, young entrants specifically, to get into the industry or give them a boost at all? Is it that young entrants, young farmers, have been in the whole process sidelined and the policy is for established farms and makes it difficult for younger—?

I'll answer that personally. I'm not from a farming background. I have no farm whatsoever. This scheme does not make me want to get up and sign up and take a farm on with this current scheme. As we said, there are 17 universal actions. Well, for someone like myself who is going to be at the bottom of the totem pole, taking on ground, I'm going to have a lot of costs going out already just to try and get my foot in the door, and then having to go through the universal actions as well for something that is supposed to help—. We look at the consultation, and there isn't a mention of new entrants to the same extent as other parts of this—the environmental impacts, for example. It is heavily driven by environmental sides. There is nothing to encourage younger generations. I think we're missing a trick there, because, as important as it is to support the businesses that are in place now, it's the likes of myself and what my organisation represents that is the future of agriculture, and that's something I think we really need to concentrate on, and to have the likes of myself and the rest of Wales YFC involved in these conversations, because, as I said, we are the future. Without us being involved and feeling that this is a scheme that can support us, we're going down the wrong road.

Can I just follow up on that? We're only 50 or 60 harvests away from armageddon—what was on the radio this morning—simply because of the way we're managing the soil. I was a bit disturbed earlier on to hear that, 'Oh, environmentalist issues are somewhere over there and we're not talking enough about agriculture.' I'd like to probe your organisation as to how you're thinking about how we have a sustainable future growing food in this country, in light of the other challenges that face us all, around excessive rainfall, followed by droughts. How do you think we should be helping young farmers to continue to have successful businesses in light of these challenges?

Well, I think the first thing that springs to mind is that the beauty of being young is that you've got time to try different things and to see if they work or don't work. An established business that has done it for years and years and years is probably more likely to be set in its ways and to do things how it's always done them. So, from a new entrants' point of view, the way that we can evolve farming to make it more efficient, to make it more sustainable I think is a much easier job than it sounds on the outside. I think the ability within our organisation to adapt, to try new things and to really have a want for better farming practice is through the roof. 

I look around our organisation and there are fantastic farmers in that organisation that will do a damn good job, given the opportunity, to improve their own farms and the farming industry as a whole. So, I think, from a Wales point of view, or from a YFC point of view, that, with the right help from this scheme, we could be at the forefront of making farming sustainable—really, really sustainable.

09:50

Okay. So, you're a relatively young organisation; where do you get your expert advice from? Do you get that through the Government, or are you also members of one of the other unions here today?

The beauty of Young Farmers is—. Well, our—

Well, the specific question is: how do young farmers understand the things they need to do to mitigate the changing weather?

Yes, like I was saying, the beauty of it is that not everybody is a set farmer. Sam is a perfect example: you've come through the ranks. He's come through the ranks, and look at him now. You look through all sorts of different businesses and you will find young farmers in there. So, we have really got a good branch, a good network, to tap into other businesses. We work very well with the FUW and the NFU, we get a lot of advice through them, and we work very well together. And that really sets us on the right path. 

Sorry, Jenny, before you go on I think Aled just wants to come in on that. 

One of the jewels that we have in our crown in Welsh agriculture is our young people, and I've been bowled over by the talent that we have. You have no problem in the calibre of people in being able to adopt new thinking, new technology, new science. They are fantastic. And let's give a shout-out to our educational establishments in Wales as well. They turn out very, very well-trained young people. Not only that, but we're always open to people from outside the industry to come in as well. This is an industry where we should be inviting people in, and my frustration, as I said at the beginning, is: why wasn't the working group on the next generation set up? There was a commitment to set it up. 

I think we need to understand that, but I want to just go on to the contentious subject of trees, because this seems to have become a way in which people latch on to dissatisfaction, because it's easy to understand. It's much less technical than a lot of the other universal actions. There are huge benefits in trees in terms of mitigating climate, both absorbing excess water and providing shade for animals, and obviously producing food in orchards. So, I understand that there's irritation about some of the real specificities about you've got to put a tree every x yards in a hedge, but I think—. Aren't we missing a trick here about understanding the importance of trees for agriculture, both producing food and also enhancing other forms of agriculture?

Do you know, to be honest—? Oh, sorry, Gareth. 

Na, cer di yn gyntaf.

No, you go first. 

It is a shame that this whole debate has been overshadowed by the debate on trees alone. It should not have been—

Well, I want to stick with trees, though. Trees are important, and why are we having this rather anti debate?

It was contentious within the consultation, the implications of having an inflexible approach where every farm had to get 10 per cent tree cover for entry into the scheme. That was the problem. It's not that we're anti-trees by any distance. We appreciate and we—

09:55

Can I go back to the co-design groups? Sixteen hundred people were on those groups; 43 per cent of those on those groups said they would not be able to get into that scheme, and I've actually taken a screenshot as well, which shows quite clearly that 43 per cent of the survey responders were unwilling to undertake the action: 'not feasible to plant on my farm'; 'the action would not benefit my farm'. Those were the responses from the group, and I don't think it's the action of good farming practice either. Now then, there were 57 per cent who said that they would be willing to go into the scheme; 52 per cent already have 10 per cent tree cover—already have 10 per cent.

Okay, that's very specific. I just want to put to you some of the presentation that was made by somebody called Niels Corfield at an event organised here last week by the World Wildlife Fund. He had incredibly specific recommendations as to how trees can benefit the land and animal production as well as mitigating flooding and all the rest of it. So, I just wondered how much professional advice you're giving to farmers about how to approach trees in a slightly less shouty way?

Yes, well, without any shouting at all, back in 2021, we produced a document, 'Growing Together', where we showed quite clearly there was a way, there was a method, by which we could introduce more trees, and we set the net-zero ambition in 2019, by the way. So, there is a place for trees—there is the 'hedges and edges' approach that we can fundamentally carry forward. The hedgerows that we have in Wales have more trees than in any other European country. 

Yes, we should celebrate. But there should be a reflection of that as well. So, there are ways of doing so. But the inflexibility of a 10 per cent is the real burden, okay. On my particular farm—quite a well-producing farm—I can find additional tree areas on my farm, but I would not be able to go to a 10 per cent tree cover. But, if I fail to get into this scheme, my additional contribution would be lost. So, I say quite clearly: work with farmers; where they have the opportunity to do so, invite them in, but show the incentives. Cost incurred, income forgone doesn't give you any incentive at all. Now, if you have every farmer within the scheme, then you might be able to effect change at scale, but if 50 per cent of farmers go into the scheme we will not have the benefits.

Okay. We clearly need to reframe this, but there are two really serious issues around this. One is that the UK Climate Change Committee is saying that we must have more tree cover if we're going to meet our carbon emissions reduction. And the other is the point raised by Wales Environment Link: if we don't integrate increased tree cover into the sustainable farming scheme, then others will come in from outside—the greenwash brigade—who will just simply buy up our farms in order to say, 'Oh, well, we've offset our carbon emissions elsewhere.' And that is the real danger here—if we don't change, others will do it for us.

Thank you, Chair. Just a couple of comments in response to this conversation; just on that point with regards to the Wales Environment Link, you could flip that argument on its head, actually, because, if this scheme doesn't deliver economic viability to farm businesses across Wales, you could almost argue that the same would happen to a far bigger extent, because, for instance, the set 10 per cent tree cover target actually prevents a significant number of farmers from accessing the scheme in the first instance. So, there are two sides of the sword, if you like, in that regard.

But, in terms of the UK CCC, the role of the UK CCC—and I've got it here—is to advise UK Governments on how to reach net-zero targets—2030 and 2050 targets. Now, in conversations that I myself have been in with UK CCC, they have even supported the idea of 'the right tree in the right place', as have we. And I strongly believe that that approach has been lost in conversations within the Welsh Government in light of these proposals. 

Now, I don't think anybody denies the positives that trees can offer on farmland, which you've mentioned. Fundamentally, all we need is flexibility to allow trees to fit into each and every type of farm business we have in Wales—because let’s be honest, no two farm businesses are the same—and you make progress where possible. And it’s fair to say that the advice that the UK CCC can provide to the UK Government and devolved Governments is advisory, but it’s also based on a number of assumptions and quite complicated algorithms. The Welsh Government have taken that advice, and implemented our legislative tree planting targets, and I fear that there hasn’t been an acknowledgement of how we can actually achieve those targets in a sustainable way. There is a huge need to establish a better understanding of what farms can actually do on the farm to work towards net zero, but in a sustainable manner, rather than approaching it with a blanket approach.

10:00

Thank you, Chair. The key message I think we’re getting towards—both Aled and Gareth have covered it there—and the key word I want to pick out is ‘flexibility’. I think it’s important that we are willing to work with farmers. I don’t think there would be a farmer out there that wouldn’t understand the benefits having trees on their farm would have, but I think that set 10 per cent is what would put a lot of people off joining the scheme. As both of the speakers before me have already touched upon, having those farms out of the scheme will have a knock-on effect—I’m going to say to our goals, because we all want to improve the environment for everybody. And then to touch on it again, you’ve got farms that will already have 10 per cent tree cover that will join the schemes. What additional environmental impact is that having? So, you’re rewarding people for doing nothing, and then you’re losing people who would be willing to maybe put 5 per cent trees in—you’ve lost that 5 per cent. I think that’s where we need to be very careful.

I hear what you’re saying about the right tree in the right place and flexibility. It’s a reckless person who says the UK CCC doesn’t know what it’s doing. These are the combined experts in our country. They’re recommending annual tree planting of at least 4,500 hectares a year, rising to 7,500 a year by 2035. Given that agriculture covers almost 90 per cent of Welsh land area, we can’t do this without farmers. Have any of you done any analysis on paper as to how we might do it while embracing the importance of the right tree in the right place and flexibility?

First of all, tenants are not allowed to plant trees.

Fair enough. I understand that there are very specific things, and that’s been recognised, I think, already by the Minister.

Existing trees we do not have management control over, so that wouldn’t go to the 10 per cent. Trees in hedgerows we do not have management control—

We understand that, Dennis, and that is why the Government already says it’s going to have to be a different approach. 

The calculation to get 10 per cent trees was based on having to have 43,000 hectares by 2030. And they worked out that if you increase the present cover from 7.5 per cent to 10 per cent, that would equal 43,000 hectares. But they didn’t take into consideration that tenants would be exempted, I don’t think. The Welsh Government can’t tell me, but I don’t think they did.

In the year ending April 2023, the forestry statistics showed that in Wales, we planted 1,190 hectares only, and we need 6,500 from now onwards to reach 43,000. We’re not going to achieve that target—no way. Therefore, to answer your question, that should be scrapped; we should have a new target if we must. But I don’t believe we need trees anyway to reach net zero. There was a presentation on the radio by an American professor, and he said once the trees are felled, transported and processed into usable timber, then only 20 per cent of the carbon that was originally captured is left in the wood; the rest’s gone.

This is a complex argument we probably haven’t got time for today. I think the real issue is that the net-zero targets are really, really challenging on all fronts. Nobody’s saying this is the only thing we have to do; it's one of the things we have to do. So, how are we going to do this, whilst recognising that the Cabinet Secretary is saying he's keen to listen to other people's solutions?

10:05

I just want to place on the record that I am by no means questioning the experts of the UK CCC. What I'm saying is that we need to consider the practicalities of achieving these targets.

To answer your question, we welcome the Cabinet Secretary's commitment as part of the round-table to evaluate ways in which we can sequester carbon and all of the other actions that farmers can do to work towards these net-zero targets. What we would like to see is consideration of how we can work towards net zero. I appreciate that we've got 2030 and 2050 targets in place. In the context of climate change, that's extremely short term, and, actually, what we would like to see from this scheme is for it to provide a mechanism that supports farmers to make sustainable and permanent changes towards net zero. I think that's one of our biggest concerns with regard to tree planting, for instance—that, potentially, at least, if the incentives are there, you see a peak in action over, let's say, a 20-year period, and, actually, by 2070, 2080, we refer back to where we are now. So, how can we make sure that we make small steps permanent steps? I think that's essential.

I'm not going to challenge the CCC either, but I would say that our interpretation of their report has to be fundamentally understood. I'm reading from this as well:

'Our scenarios for deep reductions in land-based emissions balance the need to reduce emissions with other essential functions of land'—

this is what the CCC says—

'including maintaining food production (which will help prevent the off-shoring of emissions), climate change adaptation and biodiversity.'

So, that issue of offshoring is a critical one, and CCC recognise that. If there is a land use change that offshores our emissions, that is not the way forward.

So, you acknowledge that this is what you would describe as a tension between food production and tree planting.

Stump Up For Trees will show you quite clearly there are areas where we can increase tree planting. There's a community-based charity there that's demonstrated very, very clearly that there is a way of doing this.

So, you're saying that we can do this, but we just don't need to do it in this mechanistic way. Thank you. 

Diolch, Gadeirydd. There are a few questions from me, and I'll open this up to everybody. We've seen just now, actually, a demonstration of one of those knotty issues—I think 'knotty issues' is what the Cabinet Secretary refers to—within the SFS. So, just thinking about the rest of them and our target of getting this off the ground in 2025, how confident are you that that will happen, that it'll meet that target of getting off the ground in 2025?

Thank you, Luke. We've had conversations with the Cabinet Secretary on the timescales that we're presented with, and our view on behalf of the FUW is that we are ready to work with the Cabinet Secretary and his officials to try and get the scheme to the right place by the end of year. Of course, in the words of the Cabinet Secretary, that will involve the burning of the midnight oil, and we are ready to do that for the benefit of the industry. However, of course, that will be an intense piece of work over the next six months. What we have explained to the Cabinet Secretary is we cannot disregard the possibility of needing to extend the basic payment scheme for 12 months at current rates, because, actually, if we find ourselves in a position by October or November where the scheme is looking extremely unlikely to be ready by the end of year, to avoid a similar situation to what we saw with the Habitat Wales scheme, it's fair to say we need to have a back-up plan so that we don't fall between two chairs, as the saying goes. So, we're ready to work, but we need to look at options as well.

It would be ideal to hear from others on the panel, just around that back-up plan, then, if we weren't to hit 2025. I imagine you share Gareth's opinion on that.

Yes, certainly. Let's face it, the enormity of what we're designing is huge. We've never designed a replacement of the common agricultural policy before. We've been in CAP for so many years. The CAP has actually underpinned the whole industry and we are designing something that will give stability to the industry, give young farmers the confidence for the future. It really grieved me when I saw young farmers when they were so frustrated within the sustainable farming scheme consultation documents, which showed quite clearly there might not be a future for them. I'd hate for that to be the case. So, there is a fundamental understanding that, yes, we will work with the Cabinet Secretary, and we've committed to do so. If the date is not achievable—we'll have to see if it is or not—I think we still could, if we had to, extend the BPS for a certain amount of time until we get the right scheme ready in its place. It would be a crying shame if we were to launch something half cooked.

10:10

I think he will have to consider that position as and when we go forward, because the round-table will have to meet regularly, the stakeholder groups will be meeting regularly. There's a huge amount of work to be done. The working groups that I mentioned earlier still need to be engaged and be active on cross-border situations. The tenancy issue is still not covered; 30 per cent of the land area in Wales is still under tenancy, and the payment methodology at the moment talks about additional trees, the maintenance of trees existing and the maintenance of habitat. If tenants are barred from it, it doesn't give them the underpinning and the stability that they require.

I suppose this is where, now that we're coming to that sort of crunch time, we're hearing all sorts of different arguments, aren't we, from different sectors. When you think about environmental groups, they're concerned that if we have any further delay, it'll have an impact on net zero. And maybe I'm reading into this a bit too literally, but when we hear the Cabinet Secretary refer to those areas where there is already agreement and that there is a need to plough on with them, it does begin to concern me a little that we might end up seeing parts of this being pushed forward, with other parts not being ready, and then end up having some sort of dual-track approach. How would you respond to that?

I would think that environmental groups would consider it a key consideration that every farmer in Wales is able to participate in the scheme. And they would probably agree that having 50 per cent of farmers unwilling to participate wouldn't actually deliver on environmental benefits. So, I think the message has to be to design a scheme that every farmer in Wales wishes to and can participate in, and then get them on the journey. That's the essential message.

Just to piggy-back on the back of that, I completely agree with Gareth and Aled that we wouldn't be sat here if we weren't willing to work and make this achievable and make this happen. As they both said, there is certainly a belief that this still could roll out in 2025, but the key is going to be making it worth signing up to. If people aren't going to be willing to do that, I think the short-term loss of extending the BPS for one year and making this scheme right will completely outweigh the rushing of it and sending it out half cooked. I think the importance would be taking the time to make sure that this scheme is right and right for everybody across Wales. 

As it is, tenants can't enter the scheme, so there are various choices. You could exempt tenants from anything that they couldn't comply with, but that would be pretty unfair for everybody else. You could change the scheme so that they could come in—that's not going to happen by January next year. You could postpone the whole scheme, which I think everybody would think might be a good idea, but the Cabinet Secretary says no, he wants to start it on 1 January. What you could do—and I've suggested this—is you could leave the basic payment scheme as it is, don't start reducing it at all, and that would give more time to come up with something. But for tenancy law and agriculture definitions, et cetera, it could take 10 years. And if you continue with the basic payment scheme at its present rate, that would mean that many fewer people would probably want to switch, because they'd rather stay as they were, and you wouldn't have the money that would come from the 20 per cent reduction on everybody who has switched. But I think that would be a possibility, and it would mean that everybody would still get some money. But I don't think you could have one scheme for tenants and one scheme for everybody else. It wouldn't really be fair, would it? It'd be great for tenants. But 27 to 30 per cent of Wales is farmed by someone other than the landowner, and a quarter of active farmers are tenants or graziers, so if they can't get into the scheme, the Welsh Government isn't going to achieve its objectives—no way. 

With that, Chair, I'm slowly drifting into an area of interest of another member of the committee, so I'll hand back to you before I start taking their questions. 

So, the problem we have is how are we going to cope with these landlords. Because they're all part of the challenge that we all face, and it's not a God-given right that they can do something completely different, which then puts—. We're talking about 30 per cent of all land being tenanted. I hadn't appreciated it was that high.

10:15

It's not all tenanted. It's otherwise—. It could be grazing licensed, which is not tenanted, but—

Thirty per cent of land is farmed by someone other than the owner, which is a massive chunk of Wales.  

Right. Okay. So, our challenge is to work out how we're going to get the owners on board. Would you agree? 

Well, you need the flexibility, you need the availability of land as well. So, designing your scheme where the landlord or the tenant can participate in it is crucial. 

Diolch, Cadeirydd. I'm going to have some questions around the action layers and the universal actions, optional and collaborative. And I just wanted the panel's view on the 17 universal actions, and, then, their thoughts on the Welsh Government's emphasis or reduced emphasis on the optional and collaborative layers in the recent consultation. Gareth, we'll start with yourself.

Yes. Thanks, Sam. Now, I don't think we've got the time to discuss each universal action one by one, but notwithstanding specific concerns and queries, issues et cetera within each of those universal actions, what we would like to see, as has been alluded to already—. An array of 17 universal actions is overly bureaucratic, to be honest, and it will cost every single farm business that goes into this scheme a huge amount of money and time to comply with all of those, notwithstanding then, of course, possible land-use change and things. What we believe would be a better way forward is having a simplified universal layer that all farm businesses can access, that is truly universal, and ensuring that those universal actions are more farm business-related. I emphasise, notwithstanding issues within each of these universal actions, it focuses on your benchmarking, your CPD, your animal health improvement, your soil testing, things like that, that all farmers can carry out. Any land-use change actions need to be completely optional, because that is where it becomes difficult for every single farm business to comply. So, we need to see a shift, I think, in terms of where these universal actions sit within the scheme, and notwithstanding, of course, certain issues within them.

Just a point on the optional and collaborative layers, we understand why there's been a greater focus on the universal layer. Of course, that's the gateway to this scheme. However, it is disappointing that there hasn't been any development, really, in terms of the optional and collaborative layers, particularly in the context of managing SSSI land, for instance, your common land, particularly, your organic producers, and on-farm renewable energy and other types of actions that—. I emphasise, particularly with common land, for instance, additional support for that is going to be crucial, because of the loss of Glastir Commons, for instance. So, there needs to be appreciation of needing to bridge that gap—again, for organics. So, some of those will need to come in, I think, sooner than others. 

Well, I won't repeat everything that Gareth says, but the cumulative burden is paramount here, and I think that the 17 actions—I won't go through all of them—will add a lot of burden onto farm systems across the sector. But I still go back to the land tenure question as well. If the baseline payment is supposed to be an universal baseline payment, then it should be accessible to all farmers across Wales, and that is the crucial element of designing a post-CAP policy. So, I go back to that, and I've also suggested several times before there are some elements within the universal actions that are disrespectful to some farmers as well, because the expertise that they hold for many, many generations as well—it should be considered. So, I hope there will be some changes there.

Some of the actions we can model and we can adapt, and they're something that could be part of the scheme. But I still go back to the common land issue and those farmers in SSSIs. There are many farmers—3,000 farmers who've been involved in Glastir contracts—who have delivered exceptional work for many, many years. Now, there should be a recognition of all the work that they've already done, and that should be catered for within the scheme as well. And then, the SSSIs, we've got farmers who have 50 per cent of their land in SSSIs. Now, they would be barred from entry into the universal level tier. Now, that is not a universal methodology that I would support at all. 

Okay. Thank you. Do either Dennis or Dominic want to come in? Go on, Dennis. 

10:20

Just to bring in one thing, which I brought up the other day, a lot of these universal actions have to be completed online, and there are a significant number of farmers who are not online in Wales, including me. What are they going to do? They'll have to employ a professional to do it, which will be a nightmare, because you're continuously recording stuff. That has to be sorted.

Just to give my point of view on it, I think the 17 universal actions, as we've already alluded to, are too many. A lot of them will not apply to some farms, I appreciate that, but we need to keep it basic and give people the opportunity to get into the scheme. Once they're in the scheme, I think you'd be very surprised at the number of people who'd be willing to do the extra things that will help improve the environment. People will buy into this scheme, and, once they're in, you're going to be able to get people to do a little bit more.

The Glastir project, as we've touched on, was a fantastic project that a lot of people got involved with. There was no necessary need for people to get involved in that, but people did, because they could see the financial and the environmental benefits in it, and I think that that's the key. We need to get people on to this scheme, allow people as easily as possible to get involved in the scheme and then watch them expand on the other options that they can take on.

Diolch, Cadeirydd, and good morning, panel. I'd like to go a little further on this issue of common land, which some of you have already started to address, because there are 175,000 hectares of common land in Wales—it's about 8.5 per cent of our total land mass—and I'm certainly keen that we make sure that the system that's achieved is one that is fair and workable for our common land farmers. So, could I ask members of the panel who feel that they have some knowledge on this issue, because I appreciate that it's quite specialised, what they feel the issues are for common land farmers in terms of joining and delivering the scheme?

Yes, okay. The common land working group should have sorted many of these issues. They should have been working through all of these knotty issues so that we have clarity at the moment. There's a lot of frustration. My figure is 10 per cent of the land area in Wales being common land, and there are almost 3,000 applications that have some form of common land accessibility as well. So, I go back to the message that I've said several times before, regarding the universal being the universal and not barring any farmer out of the scheme. If a farmer has 50 per cent of his land within common land or SSSI, well, he wouldn't be able to access the universal baseline payments that would underpin his farming system. So, I still consider that there are too many actions here that would affect the viability of these farming systems. Pushing it over into the collaborative or optional level is not the way forward, to be honest with you. It's as if we know it's too difficult to address at the moment, so we'll put it in at a later stage and deal with it in future years. But those farmers need stability now, and they need assurance as well.

Yes, I just want to highlight as well that common land has been eligible for area-based payments for going on 20 years through the basic payment scheme and other schemes, so there is no reason why we can't continue a similar payment. It's worth highlighting that around 2,000 of those who claim on common land rely on that area for between a quarter and 100 per cent of their BPS claim, so it is a huge part of those businesses. Now, fundamentally, what we need to make sure is that there is an universal baseline payment available on the common land areas. It's just worth highlighting that some of the universal actions that I mentioned earlier on that focus on the business performance, for instance, should also apply for common land. Your animal health and welfare actions, for instance—there is no reason why that can't apply on common land. So, there are mechanisms in which we can include common land into this layer, but we need that to be done in collaboration with the Welsh Government, of course. 

Diolch. We think it should be a separate agreement, because, as Aled said, and as everybody has said, commoners cannot enter the scheme as it is—they just wouldn't be able to. We've had a lot of experience on this in Dartmoor, where it's been a potential disaster, with the managers of the commons dictating such low levels of stocking that the thing would probably eventually get covered in trees, which would probably delight some people.

It's completely separate to other types of farming, except that most commoners actually have a farm of their own—own a farm, or rent another farm—and they have rights on the common. And it could be common rights—the owner could have a common right—or a manorial right, which is a slightly different thing. A manorial right owner has only got rights over certain things, like minerals, sporting rights and the grazing right, which he then lets to other people. It's extremely complicated and I agree that the working group should have continued. I think they had one meeting only, at which we were represented by the person who is in charge of the grazers' association, or whatever they call it, in Dartmoor, and it got nowhere; it's been binned, probably because it's so complicated. It's a separate issue, I would think.

10:25

Okay. So, if I can just check, then—? Dennis favours a separate approach for common land farmers. Could I just check with the rest of the panel whether they agree with that? My feeling was that both previous speakers were alluding to a universal system that should be able to incorporate common land farmers, so I just want to get that clear for the record.

Yes. Let's be clear, all common rights—. Farmers who have access to common land rights should have access to the universal tier.

I think just to highlight as well the importance of ensuring that any type of payment on common land is administered through RPW, because there's a risk that, by using common councils, for instance, it can create difficulties, as we've experienced in certain areas. But, just to highlight and echo Aled's comments, whether that's administered as part of the universal layer on the farm holding, in addition to the common land rights, or whether it's considered a separate contract, as long as common land is eligible for a universal payment—. And, of course, they'll be eligible for top-up payments through collaborative layers and things as well, but it's fundamental that we underpin that with an area-based payment of some sort.

Diolch, Gadeirydd. Just thinking about previous experience in other agricultural schemes—Tir Gofal, Glastir, Habitat Wales scheme—what lessons can we learn from them going forward?

Yes, well, it was an unfortunate experience when Glastir came to an end. Welsh Government should be proud of the scheme, Glastir, which has delivered huge benefits for the countryside in Wales. It was a disaster the way that Habitat Wales was designed. There was no consultation, there was no modelling at all and there was no budget either. It was unfortunate, because those farmers who've felt that they've been part of these schemes for so many years have felt betrayed, to be perfectly honest with you, and I wouldn't wish them to be in that situation again. So, there have to be lessons learnt that we have to make sure that we continue the appreciation of the many works that have been done, and also instil further action, which is possible as well.

Just two quick points. I think it's worth highlighting that, if we compare the basic payment scheme to Glastir, for instance, the administrative costs of Glastir were around 10 times as much, because it was an environmental based scheme. I think that has to be taken into consideration in light of the current proposals, which are primarily environmental. But also the extent of the mapping errors that we identified throughout the Habitat Wales scheme process highlights the importance of ensuring that the data confirmation exercise that, as things are currently, will be taking place over the summer, takes place over as long a period as possible—that will be an extremely intense piece of work, I think, to correct the number of mapping issues that we currently have—and just highlighting the importance of making sure that those maps are correct, given the fact that the Welsh Government hopes to use those maps and remote sensing to establish the payment per farm business. That will, basically, be the basis of payments, so we need to ensure that we avoid errors wherever possible. 

10:30

What about some of those other agri-schemes that have been developed across the UK at the moment? Is there anything that we can look at there and bring over here?

I think it would be important to note, in this part of the discussion, that, in the past, Glastir has probably been a cost incurred and income forgone, but it has been built on farm businesses that are underpinned with the BPS as a stability mechanism. So, I go back to the previous messages right at the beginning of this meeting: the universal payment has to be universal for all farms, and the stability element that this scheme needs to deliver has to be paramount. So, going beyond the cost incurred and income forgone is crucial.

Now, looking at other countries, there are lessons to be learnt here. The payment methodology adopted in other countries is different. I would say that we cannot allow ourselves to be impacted by the unlevel playing field. Scotland and Ireland have maintained the direct support. Obviously, England have transitioned earlier. What they have found in England is that they've been removing the BPS element and farmers haven't been able to access the sustainable farming incentives. Only 25 per cent of farmers in England have been able to access the SFI, which would have been a replacement for the lost BPS. So, there's a lesson there as well.

Yes, I just want to quickly touch on the current EU CAP principles as something to reflect on, given how long we've operated under the common agricultural policy. I just want to highlight some of the objectives that the CAP currently has and that, of course, have been in place for a number of years, including things like fair income for farmers, increasing competitiveness, vibrant rural areas. These are certain objectives that I do feel have been missed from the Agriculture (Wales) Act 2023, which inevitably underpins the sustainable farming scheme framework. We often hear that there is now a need, following Brexit, to justify the spending of public money on rural affairs. Actually, having these types of objectives within the framework we're operating under would certainly underpin that justification, really, of public spending. So, there are certainly lessons to be learned there. 

Okay. Sorry, yes. I've listened carefully to what you've been saying, and clearly there are some issues around the transition from one agri-environmental scheme to another. How much emphasis has been put on soil improvement and soil nutrients, because this is rising up the agenda? We've only got 50 or 60 harvests left in our soil. We know about a lot of this, but how much has soil, and how we nourish our soil, been a focus of these schemes?

There are parts of the universal actions that you—

I was thinking about Tir Gofal, Glastir—have we built up some knowledge about this or not?

I would say we have, but I would say it's a broader discussion because, obviously, the future of farming is based on its soil and its soil management, and that's been a crucial element for such a long time. Within universal actions, there is soil testing. We can do that. There's no problem. Good soil management is good for business, and it's good for the environment as well, by the way. So, that's a crucial element that we can work with, no doubt at all.

Okay. So, that particular universal action is something you think we can build on.

Yes, there has to be flexibility, because in some areas there would be no inputs, would there—outside inputs onto the land—perhaps a little bit of lime, but that would be the only thing. But I think there has to be some form of practicality there as well in the way that we address it. 

Well, healthy soils don't get compacted, but, with the wet weather that we've seen, obviously there has to be remedial action, and the wet weather was beyond our control. But there are certain things that farmers can do. Just work with us, because the expertise is already there among farming circles. 

10:35

I think it's just worth highlighting that looking after your soils, avoiding soil compaction and things have been in cross-compliance rules for decades as an underpinning legislative requirement. I think the historical environmental schemes that we've had have been more prescriptive in terms of environmental benefit—hedgerows and things like that, habitat. I would say that there's been more of a focus on increasing awareness of soil testing and things like that through things like Farming Connect support, and, especially if you come together as a group, you can get 100 per cent funding in some cases. So, I think that has, maybe, been—. There's been more of a focus through that mechanism, I would say, in terms of improving awareness of soil nutrients and things like that.

You say that this has been a long-standing concern but, nevertheless, the state of our soil is causing lots of red flags to be raised about the quality of the nutrients in our soil and whether or not what we are producing has got any value as food.

Can I refer to a piece of work from Aberystwyth University last year, where they show quite clearly—historically, we can be very proud of the work that Aberystwyth have done for many, many years at Pwllpeiran—that what they are showing now is there's been a decline in the pH levels of some of these upland soils, the improved leys? What they're finding is that there's more compaction of these soils now because there's insufficient lime being applied to them, and it is impacting the run-off of water from heavy rainfall from these soils. Now, I think there's something that we need to address to make sure of the viability of these upland farms—that they're able to access funds so that we might be able to lime, more liming even, and get the porosity of the soil in such a way that you can absorb some of this heavy rainfall.  

Okay. There are lots of other things that are being proposed, like rotating crops, sowing different types of grasses to improve the permeability of the soil.

It's already happening. A lot of farms are using mixed leys, bringing new varieties, new species into their grassland. There's more clover being employed. Aberystwyth and other establishments are already doing a huge amount of work, and farmers, particularly young farmers, are adopting these new changes all over Wales. 

Just to jump on the back of Aled's point there, we alluded to it earlier: I think education has been a massive factor in that, especially as younger farmers are coming through. As I said earlier, I look around the YFC community that we've got and some of the farmers there are really on the front foot with all these new, innovative ways of reducing soil compaction, and are willing to do the work. So, I think we need to continue that work, and making sure, as we've touched upon all the way through, there is a universal way that everybody can get into this scheme will allow farmers to continue their work, allow younger people into the industry who are going to continue their education, who are going to continue to put the work into their farms. And, in turn, that's all going to look after itself, because, as Aled said, healthy soil is good for business and, at the end of the day, that is the key, isn't it, in all of it?  

Totally, but is it happening fast enough, given the weather extremes that we're experiencing, the amount of rainfall that's being dropped in one day?

In terms of weather, there's not a great deal that we can do about that. 

Well, I'm talking about what we can do to mitigate it. I appreciate we can't do anything about the rain. 

Of course, and that is the key of having a universal support scheme for everybody to buy into. If there's that bit of funding there, people are going to be able to do a little bit more a little bit more quickly. Having 17 universal actions to do is going to take away that money. If you've got to spread that money over 17 actions instead of five or six, or even smaller than that, you're spreading yourself too thin. Focusing on the key—

Just very quickly, I think we should recognise that the expertise within the industry is crucial, and I'll make reference to the British Grassland Society. In eight out of the last 12 years, the award has come to Welsh farmers. The expertise is there, and that is probably a reflection of the training and the colleges and universities as well.

Sorry, I'm just very conscious of time. We've only got a few minutes left.

Just to touch on the work that Aberystwyth University is doing, they are now looking at drought-resistant grass varieties, for instance, and also looking at—. Decades ago, they would have been looking at maximising yield; now they're actually looking at maintaining yields with less input. So, there has definitely been a shift, I think, but there just needs to be an appreciation of the topography that we have across Wales and that we can't actually apply inputs in all areas of Wales. So, there has to be that realisation as well.

10:40

Can I ask how the scheme sits within existing and planned international trade deals, and also within the rules of the World Trade Organization?

Yes, okay. So, Wales is not a member of the WTO; the UK is. As I understand, there's more than additional headroom within the WTO regulations that can accommodate the support systems that we have in Wales, so it should not be an issue.

I just want to highlight a point that was raised earlier on in terms of offshoring: we need to ensure that this scheme moves the industry forward, doesn't move it backwards, in the sense that we import more food and also offshoring our emissions, in a sense, as well. So, fundamentally, really, what we need to ensure is a level playing field, particularly in the context of the United Kingdom Internal Market Act 2020, and, as it was mentioned earlier on, in terms of the actions that other countries are moving forward with in terms of future agricultural support.

Yes. We import vast quantities of food at the moment throughout the world, and successive Governments have really gone on the theme that, 'We don't really have to produce food here; we'll go on importing it.' Well, by now, the doomsters predicted that we would've been flooded by cheap, inferior food from around the world—blow our standards—but we haven't. There are shortages. Why? Climate change. Other countries in the world are experiencing far greater extremes than we've had here. I mean, we talk about the wet winter—you look at the flooding in Australia last year, and, on the radio again, Mongolia have had such a drought that their 6 million cattle are now only 3 million. And I predict that, by 2050, where we get the food from—the exporting countries where we get the food from—won't have any to export, and it's going to be a complete disaster.

This goes back to earlier questions, taking land out of agricultural production, even very low stocking rates, in this country, like in Snowdon, Gower and places like that, is a major mistake, because we can still grow food there, even if it's very low output. Just as an example, where I was in Australia, the stocking rate was one livestock unit on this cattle station to 200 acres. On the Gower, it's 1:17. Where are we going to get our food from is my question.

Yes. Well, I would say I thank the Welsh Government for their support—the representations that they made when the trade negotiations were ongoing. On the fundamental understanding of the issues of Welsh farming, particularly livestock farming in Wales, we had severe concerns regarding the New Zealand and Australia trade agreements, for example, and I do fundamentally hope that we'll understand the perilous situation that we would be in if we were faced with one of the most efficient exporting nations being able to access this market. Now, I think there has to be an understanding that we need to maintain the viability of our own production systems, keep the food produced here—what we can produce very well—and that's what the messages here are. And the land availability that we have, and the favourability of that land as well, particularly grassland, has to be championed.

Okay. Thank you, Hefin. Thank you very much. I'm afraid time has beaten us. Our session has come to an end. Thank you very much indeed for being with us this morning. Your evidence, obviously, will be very important to us as a committee in scrutinising the sustainable farming scheme, going forward, so thank you for being with us. A copy of today's transcript will be sent to you in due course, so if there are any issues with that, then please let us know. Once again, thank you. We'll now take a short break to prepare for the next session.

Gohiriwyd y cyfarfod rhwng 10:44 a 10:53.

The meeting adjourned between 10:44 and 10:53.

10:50
4. Y Cynllun Ffermio Cynaliadwy - Sefydliadau amgylcheddol
4. Sustainable Farming Scheme - Environmental organisations

Wel, croeso nôl, bawb, i gyfarfod o Bwyllgor yr Economi, Masnach a Materion Gwledig. Fe symudwn ni ymlaen nawr i eitem 4 ar ein hagenda. Dyma'r ail o'n tair sesiwn dystiolaeth heddiw ar y cynllun ffermio cynaliadwy. A gaf i groesawu ein tystion i'r sesiwn yma? Cyn ein bod ni yn symud yn syth i gwestiynau, gaf i ofyn iddyn nhw i gyflwyno eu hunain i'r record? Efallai y gallaf i ddechrau gydag Alex Phillips. 

Welcome back, everyone, to this meeting of the Economy, Trade and Rural Affairs Committee. We'll now move on to item 4 on our agenda. This is the second of our three evidence sessions today on the sustainable farming scheme, and I'd like to welcome our witnesses to this session. Before we do go to questions, could I ask them to introduce themselves for the record? Perhaps I could start with Alex Phillips.

Yes. So, my name's Alex Phillips and I work for WWF Cymru. I'm here representing Wales Environment Link, which has a membership across Wales of several tens of thousands of people.

I'm Andrew Tuddenham. I work for Soil Association Cymru, and I'm representing the Welsh organic forum, which is the representative body for the organic supply chain in Wales.

Bore da. Rhys Owen, pennaeth cadwraeth, coed ac amaeth yn Awdurdod Parc Cenedlaethol Eryri, ond yn cynrychioli Tirweddau Cymru, sef y parciau cenedlaethol a'r ardaloedd o harddwch naturiol eithriadol.

Good morning. I'm Rhys Owen, I'm the head of conservation, woodland and agriculture at Eryri National Park Authority, but I'm representing Tirweddau Cymru Landscapes Wales, and that represents the areas of outstanding natural beauty and the national parks. 

Bore da. Rhys Evans. Dwi'n gweithio i Rwydwaith Ffermio er Lles Natur Cymru. 

Good morning. I'm Rhys Evans. I work for the Nature Friendly Farming Network.

Thank you very much indeed for those introductions. Perhaps I can just kick off the session with a couple of questions. Can I first of all ask you all how have you found the process of consultation and engagement on the scheme design—the sustainable farming scheme design? Is it sufficiently evidence based in your view? Alex.

10:55

Well, I think the first thing to say about the process is it's been very long. I think we've been engaged in this for quite a few years now. It's ebbed and flowed since about 2016 when it all kicked off. Some areas progressed very well. Some areas haven't progressed as well as we would have liked at this point. But as an environmental sector, we've tried to engage as much as we can. We've always been the minority in the room—it's probably fair to say—in terms of the number of people in meetings, but, a lot of the time, we've found that we're saying very similar things to everybody else.

So, I think it has been evidence based, as much as possible. I think a lot of the work we've seen around trees shows some of the evidence base, because of the amount of data there is behind that. But the process has been a lot better at official level than, perhaps, ministerial, historically. I know that we've sometimes struggled to get ministerial access with the previous Government, but official access has been consistent with others, maybe not as much as other parts of the stakeholder group, but, I think, we've always done reasonably well. 

But, hopefully, that will continue over the remaining period. So, in general, it's been decent. I've never been surprised by anything that's come out; it's always been consistent with what we've been told in meetings, so there's never been a shock for me at any point. 

Thanks a lot. Well, I suppose, from the perspective of the Welsh organic forum, if you wanted to sort of gauge the level of engagement with Welsh Government on the SFS by the outcome, it's clear that Government has been listening, although it's come to conclusions about organic quite late in the stage, in terms of it's only the last consultation that's proposed something specific for organic farming systems. Otherwise, the forum has had good access to Welsh Government officials from various departments, but not necessarily exclusive access with the land management reform department, which has been designing the scheme. And I think that another reflection of what I'm describing here is that it's only in the last, I think, 12 months or so that organic bodies have been represented on the organisation stakeholder groups that the land management reform unit has undertaken. 

But organic farmers have been pretty well engaged with the co-design work—the sort of direct Government to farmer conversations—and I think the report in 2022 suggested that about 10 per cent of the farmer conversations were with organic farmers. So, that may give an indication about the level of engagement and interest there is from organic. But, yes, I just go back to what I started with, in that it's only recently that there's been this sort of recognition that organic systems need something specific within the SFS. 

Yes, thank you. Similar to the previous comments, I think there's a little bit of frustration in the system, maybe. The consultation itself has been okay, and the engagement, there were no surprises, as was mentioned. But, I think, in terms of the stakeholder group, it feels like we've been a little bit late in the day coming to the table to discuss this at a more pragmatic level. And I think that it might be an opportunity missed there, in using a lot of experience and pragmatic programme delivery and project design, which could have assisted with the development of some of the ideas. I appreciate that you can never please everybody all the time, but I think that the door is open from organisations like ours, to use us, I think is the plea. We can feed in. 

So, I think that's the only frustration, really, and then, of course, the modelling and the data is very complex, and, again, because of its complexity, it was quite late coming through to be able to scrutinise, and to think and delve into it at depth. And, of course, some of that hasn't been ground-truthed either. So, slightly frustrating, I think, is the—

Ie, jest i ategu beth sydd wedi cael ei ddweud eisoes, mae'r broses ymgynghori wedi bod yn un hir, ond, o fewn y cyfnod hir hwnnw, mae yna sawl ymgynghoriad wedi bod, ac mae pawb wedi cael rhwydd hynt a rhyddid i ymateb i'r ymgynghoriadau hynny. Rydyn ni fel rhwydwaith yn rhan o'r grwpiau trafod efo gweision sifil y Llywodraeth, ac yn hynny o beth mae i'w groesawu. Mae'n hawdd cael mynediad at y gweision sifil, os liciwch chi. Efallai ar y lefel weinidogol, mae hi wedi bod ychydig bach yn fwy o her i gysylltu efo'r Gweinidog gynt.

Un o'r ychydig bethau rhwystredig, i adeiladu ar beth roedd Rhys yn ei ddweud, o bosib, ydy er bod yna grwpiau trafod wedi bod ynglŷn â rhannau neu agweddau o'r cynllun, cyn belled â dwi'n ei wybod does yna ddim grŵp trafod wedi bod ar yr elfen 10 y cant coed, neu grŵp trafod lle rydyn ni wedi bod yn rhan ohono fo beth bynnag, ac o ystyried bod yr elfen yna yn un o elfennau mwyaf dadleuol y cynllun, dwi'n synnu nad oes yna fwy o drafodaethau wedi bod yn sgil hynny.

Ac efallai bod rhai o'r grwpiau trafod wedi bod yn adweithiol yn eu natur—hynny yw, bod y gweision sifil yn gweithio ar y polisi tu ôl i'r llen ac yna yn adrodd yn ôl i randdeiliaid ar gynnwys y cynlluniau drafft, ac wedyn mae cyfle inni ymateb i'r rheini, yn hytrach nag efallai cael sesiwn lle rydyn ni'n cyd-drafod ac yn cyd-ddylunio efo'n gilydd, a phawb yn cynnig syniadau efallai, yn edrych ar y pethau gorau a beth sydd ddim yn gweithio ac ati, er mwyn dod i fyny efo rhywbeth ar y cyd. Ond dwi'n falch o glywed bod y Gweinidog newydd yn mynd i gynnal trafodaethau mwy manwl sydd, rwy'n gobeithio, yn mynd i wneud hynny.

Yes, just to support what's already been said, the consultation process has been long, but, within that long period of time, many consultations have been held, and everyone has had the freedom and the opportunity to respond to those consultations. We as a network are part of discussion groups with Government civil servants, and in that regard it's to be welcomed. It's easy to have access to those civil servants, if you like. Perhaps at ministerial level, it's been a bit more of a challenge in terms of liaising with the former Minister.

One of the few frustrating things, to build on what Rhys was saying, is perhaps even though there have been discussion groups about parts or aspects of the scheme, as far as I know there has been no discussion group on the 10 per cent element of tree cover, or not that we have been part of anyway, and considering that element is one of the most controversial parts of the scheme, I am surprised that there haven't been more discussion as a result.

I think that perhaps some of the discussion groups have been reactionary in nature—that is, perhaps civil servants have been working on a policy behind the scenes and then reporting back to stakeholders on the contents of those draft schemes, and then there's a chance for us to respond to those, rather than having a session where we can discuss and co-design together, with everyone offering ideas perhaps, looking at what's best and what's not working and so on, to come up with something together. But I'm glad to hear that the new Minister is going to have more detailed discussions that, I hope, will achieve that.

11:00

And on that, have any of you had the opportunity to discuss this with the new Cabinet Secretary for Climate Change and Rural Affairs at all? Alex.

There has been an environmental round table, with the Minister, a few weeks ago. This was one of three subjects that were discussed there. From my understanding, there was quite an open discussion about it there, and there is a commitment that we will continue to work, going forward, on the issue. My understanding is that WEL has been offered three spaces on the ministerial taskforce—the new one that's being set up at the moment. I don't know how large that group is in total, but I would envisage it being a relatively small group, to move swiftly. The existing stakeholder group, which I think is now being called the officials' group, I think is still going to remain relatively large, as it has been, and we will continue to be on that. On the new sequestration evidence taskforce, I'm not quite sure what is happening with that, but as you can imagine a lot of non-governmental organisations have worked quite heavily in that for many years, so probably have a lot of expertise to deliver, if it is required, and we have offered that.

Thanks. Well, the Cabinet Secretary visited the chair of the Welsh organic forum's farm in April, so that was one of his first farm visits. That was very much an introductory sort of visit to look at organic farming. There were good discussions there, but we're hoping that there could be an opportunity to really deepen that relationship and that engagement. The forum hasn't been invited onto the round table, which we're surprised by, but hopefully there is an opportunity to continue discussions, because as a proportion of land area, in Wales organic is one of the largest. It is the largest in the UK countries, at about 4.5 per cent. So, it's a significant sector. And it's also the most widespread form of what could be called agro-ecological or regenerative farming, which the sustainable farming scheme seems to emulate. So, we think we have got quite a lot to offer in that conversation.

Yes. Just a quick comment, really. I think, as designated landscapes, we're in a little bit of a sticky situation at the moment, because we're not classed as an environmental NGO. Obviously, we're not a union. And we sit—. Well, the AONBs sit with one portfolio holder, and the national parks in another, so we'd just like to put a comment out, and a plea, really, that we're not forgotten.

Diolch, Cadeirydd. Good morning, panel. Thanks very much for joining us. It feels like it's been a never-ending discussion around the sustainable farming scheme and ensuring it's right, and it's right for farmers and right for the environment as well, and I don't think there's a contradiction there. One of the big contentious issues that have been raised is the cost incurred and income forgone, which was raised in the current consultation, the consultation that has just closed. I was just wondering about the panel's views on this payment methodology. As you're in the room, Alex, we'll start with you.

11:05

There was a narrative throughout the process that it would be more than cost incurred and income forgone, and obviously that seems to have run into a bit of a wall at this later point, which I think is quite disappointing. We've had a lot of talk around social value. It's quite nebulous as to what that could be. We can talk more about that, I think, in terms of what it could look like and how we can think about it. But when you look at the actions that are available in universal, it's got to be covering what it costs and income forgone, and whether or not you have additionality there, I think it depends on how far from best practice or common practice those actions take you. So, as they get harder and as they may have more benefit more widely, you'd expect to see more reward. I think, fundamentally, the problem has been the lack of money attached to this. And throughout all of this programme, if we—

Exactly. If there was, even if there was an indicative budget to work with, I feel that that would have solved most, or at least many, of the issues that we have in debates, because a lot of it has come down to, 'What would this mean for my farm? What would this mean for the bottom line? What would this mean for the business decisions?', because ultimately, that's what we're trying to do. And having no money attached to it has proved a great challenge for all of this because we've never quite known what we've been working with. You can extrapolate from a lot of what the Welsh Government have said and a lot of their reports roughly where numbers could be, but that's not really secure enough to be informing the farmer as to what it would do.

I would much rather a situation where the Welsh Government said, 'We think it requires x amount of money', and go to the UK and say, 'This is what we think we need. Match it.' Or at least have that discussion more publicly, but that's not really happened. But I would imagine that, at this point, the Welsh Government probably has a pretty good idea what it's going to be—I'd hope so at this point. But we, as stakeholders, do not know. And that's leading to a lot of very difficult conversations. But on the income forgone and cost incurred, we do agree on the additionality to that, but it needs to be delivering that additionality as well. So, that's where we've been.

That's helpful. Andrew, on that. I know the social value was mentioned by Alex there as well, and I'm not sure if you could touch on that as well in your thoughts around the payment methodology. 

A very similar position, really, in that to be viable and to provide that reward and that income stream, the environmental elements would need to go further than just income forgone and cost incurred. I think I'd add that there are some specific complications within organic, because the income forgone calculation is based on a comparison between organic and non-organic, and there's a clear difference. There's an income forgone calculation that's really clear in the lowlands, which are more productive, than in the uplands, which may be quite extensive anyway. So, generally, as we've seen with the organic support payment of 2024, the payment has been skewed down into the lowlands, particularly on dairy, and there isn't that much in the uplands. At the time, that was a better deal than nothing, because that was what was on the table with Glastir Organic being ended and no replacement, but it is a particular challenge. 

Just a wider question, then. I know Jenny's going to come on to organic farming later, so I won't tread into her theme of questioning, but why do you think that that's been the case around organics—the ending of Glastir Organic, the nonfulfillment or the last-minute nature of the subsequent organic support? Why?

We're still trying to work that one out. There are a number of possibilities. I think, and this goes back to the question that opened this about the level of engagement with the SFS, there was a sincere attempt by the land management reform unit to design a scheme that would cater for organic and make it easy for organic farmers to enter, but they didn't recognise that organic needed that additional support to remain viable with increasing costs and all the rest of it. I've heard that there's a perception that the premium on organic foods that are sold in the shops should provide that to the producers, but we know from the last few years in particular that that isn't really happening.

11:10

I'll leave it there on the organic talk, so that I don't take away from Jenny's line of questioning later on. Rhys Owen, I was just wondering if you could outline your thoughts around the payment methodology.

I think the principles are okay, and I'm not going to go over old ground again. I think this might creep into some of the questions later on, but possibly, the amount of universal actions that are being proposed could be a little bit problematic, especially for small to medium-sized holdings, and the amount of actions required for that principal payment. I think one of the biggest concerns that we have in the proposed mechanisms is the effect on payments for SSSI areas, and how that's going to be managed or brought into the system, because, obviously, with designated landscapes, we've got a very high concentration of designated ground and obviously that has a massive impact on the income for various holdings, which could be disastrous. So, we've got very real concerns about that and how it would be undertaken.

The other element would be that there's a lot of work that is required on the social value element. Obviously, as designated landscapes, we've got a high percentage of very attractive spots that provide destinations for people—so, destination management plans—but this is going to be a lottery of your postcode in terms of is a green lane in mid Wales getting the same social value score as maybe a bridle path down in Newport, and so on. So, there needs to be some mechanism put in place there to assess how you address that social value and how you quantify or put a value onto that. Is a vista or a seascape of the same value as part of, maybe, Yr Wyddfa, or other iconic landmarks or destinations that attract a lot of people? And, unfortunately, there are the social elements or mismanagement or problems created by high-impact areas. So, there's quite a bit of work there to be done on the definition. But certainly, something like designated landscapes we are very keen on, because it's a way of supporting a lot of our land managers in these areas.

Diolch. Rhys Evans, eich meddyliau chi, os gwelwch yn dda.

Thank you. Can I have your thoughts, please, Rhys Evans?

I think the biggest challenge in terms of a payment methodology is to create a universal payment that is attractive enough for farmers to enter the scheme, but not overly generous to deter them from accessing options on targeted layers—the more ambitious elements of the SFS, which reward that additionality. But without knowing what the payment rates are, what the budget is for the scheme, it's very difficult to make further observations, and I think that feeds into the uncertainty and maybe a bit of the anger around the scheme.

As Alex said, if we had indicative budgets and indicative payment rates, maybe farmers could plan a bit better and prepare for the future. Getting that balance right between ambition and payment is important. And I think, looking at the mandatory actions within the universal layers, if every farmer in Wales undertook those actions, I think it would make a big difference towards farming sustainability, but obviously, going beyond income forgone and costs incurred is vital in order to acknowledge that.

I will just reiterate really our disappointment that the optional element of the scheme hasn't been developed to such an extent, and a potential delay in those actions presents a bit of a cliff edge really for the most nature-friendly farmers out there.

Thanks, Rhys. You touched on there both the universal actions and the optional and collaborative tiers, and I was wondering if I could delve into that in a little bit more depth. You mentioned there the attractiveness financially of farmers having to sign up to the scheme so that they're reimbursed, remunerated, and then also there are environmental goals. Do you think that the universal actions do that or is the balance not right at the moment? How would you phase out current funding through BPS towards this? I'll stay with you, Rhys. 

11:15

Just looking at the universal actions, quite a few of them make sound business sense. So, as farmers, we are encouraged by industry leaders to benchmark, to undertake soil health planning, integrated pest management, and continuous personal development. So, in that sense, if there’s a payment attached to undertaking activities that improve your business resilience, then that’s something that we welcome. The process around that needs to be simple, it can’t be too onerous, but the principle is one that we welcome. And in terms of the environment, there is a lot of win-win, no regret options there, particularly in terms of hedgerow management. Imagine if every hedgerow in Wales was cut or managed on a rotational basis, allowed to grow—I think it would make a big difference in terms of the landscape and environmental improvements. And obviously, in terms of the argument around the animal health improvement cycle and animal welfare, that’s a no-brainer and it makes sense for farmers. But again, with those things, it’s how much paperwork does that add, how much time does that add on top of everything else, and that needs to be reflected in the payment.

On the phasing out of BPS, are you content with what is currently being proposed by the Welsh Government in that, or is there another way that NFFN would envisage that being done?

In our previous consultation responses, we welcomed that suggestion of a gradual phasing out of the BPS so as to avoid a cliff-edge scenario. But it’s just a shame that there's been such a reduction in the agricultural budget that we feel that the optional element of the scheme has been delayed and compromised in the name of retaining the BPS, whereas in an ideal world, you would have both. So, there needs to be a mechanism in place to bridge that gap, like—I’m sure we’ll talk about it later—the Habitat Wales scheme, for example, as an interim scheme.

Thanks, Rhys. Rhys, over to you. You mentioned the universal and optional collaborative tiers in your previous answers, and a bit more depth on that would be appreciated. 

I think generally we're a little bit resigned, because putting two and two together with the budget limitations that are going to be, probably the universal actions are going to be very broad and fairly simple to administer and delve into. So, a menu of options looking at fuel efficiency or feed additives to reduce methane or crop or seed selection to reduce nitrous oxides from high-sugar grasses might be more of a thing that will give us a fundamental baseline, if you like, rather than our aspirations originally, and that of most environmental NGOs, that this was going to be a massive game changer, even from the universal actions upwards. I think we’re a little bit resigned too that the optional layer and the collaborative layer are going to be the main delivery mechanisms for environmental groups, and ourselves, of course. And I think, again, the door is open there; we’ve got a lot of experience of project development and delivery over several decades of what works and what doesn’t. There’s a vast array of knowledge there available for people to tap into, and we're more than happy to share that.

I think as designated landscapes, we’ve got a very keen focus on this delivery and development, but at the moment, there’s a little bit of frustration that we don’t know what are going to be the principles there, how is it going to be developed. We feel that this has been left late in the day again, whereas if there was an element of trust or an open door or a discussion forum, we’d be willing, I think, as organisations, to chip in and develop these actions for the Welsh Government so that they don’t have a massive block when it comes to getting the universal actions sorted and then moving forward to develop the higher layers, so that we would be in an advanced state. And similarly, these advanced options will require people at some stage or another in terms of advice, guidance and signposting. And again, if we don’t know the direction that we’re moving to, or the requirements, it's going to be difficult to recruit and train people in a timely fashion. So, sharing a bit of the knowledge or using us and other groups would be a good way forward as well, so we can see where the direction of travel is and where the skills gaps and needs are going to be, and address those in a timely fashion as well.

11:20

Before you carry on, Sam, I think, Jenny, you just want to ask a very brief question on this.

Yes. There is no more money, so the farming unions were indicating that there should be fewer universal actions. How could that be done without diluting the sustainable farming principles, in order to leave more money for the other optional and collaborative schemes?

I'll come in on that one, if I may. We have a whole host of farm sizes in our landscapes, and if you look at Eryri in particular, we have ones going from 5 hectares up to well over 1,000 hectares. To ask those 5 to 20 hectare blocks to be undertaking 17 universal actions might be a bit of a hurdle, and it's going to deter a lot of the smaller applicants from going in, and, frequently, it's those that need the most support and guidance, which are available through the various structures of Farming Connect, if it's direct payments or not. So, maybe a menu or a graded requirement might be something to consider, so that the bigger the unit, the more universal actions are required, so that it's a little bit fairer in terms of requirement and input.

I appreciate there's no more money, but there are a lot of actions that could be built into it. Things like moving more improved pastures to increase legume or herb content could be done fairly effectively, and I think it could be taken on without being detrimental to production and still fit in well with especially some of the more improved areas that we have, which were part of the problem with the amount of habitat and tree cover that were required.

I think there is still that concern about money. Fundamentally, this should be a massive priority for Welsh Government. It is the main avenue through which they're going to be tackling the nature and climate emergencies, and, therefore, it should have higher priority within the Welsh Government budget than I think it currently has. The issue around the funding of the tiers, we've said, as Wales Environment Link, based on the current set-up of the actions, that we think about 50 per cent of the budget should be in universal, and at least 50 per cent set aside for optional and collaborative, because that's where the delivery's going to be on the SLM goals, combined mostly. I think if you end up in a situation where you are substantially simplifying or reducing the universal actions, then the budget should have to go down with it, and that's a difficult conversation to be had, really, but if we'd had an indicative budget at this stage, we could start seeing what that might look like, but we're not there yet.

The longer term issue I have with the optional actions is that there's obviously this argument about jam tomorrow with them, that they could be anything at this point, we don't really fully understand them, but what we have been told is that there is the potential for current actions and schemes that are not in the SFS to be rebadged as optional SFS actions in future years. My concern would be that the money that currently funds those is obviously outside the SFS pot, although it still was in rural affairs as a whole, and that might be a way that, in future years, that money somehow disappears and is reallocated elsewhere in the rural affairs or rural affairs and climate change portfolio. There's a risk of that that Members should be aware of. What actually should be happening now that rural affairs and climate change have been put back together is that a lot more money from the climate change budget should be coming into this area, because your farm businesses need it.

Okay, I hear that, but what about the point made by the farming unions that there are just too many of these universal actions? I have to reach for the dictionary to understand some of it. I'm not a farmer, but it doesn't pass the Daily Mirror test.

The way it is laid out is, I think, very complicated. When you read into them, a lot of them go together very well, and there is, potentially, an opportunity to restructure a lot of it that sees the linkages between them. I think when you look at the tree rule, for example, about half a dozen of the universal actions all contribute to that in some way, so maybe there's a way of rephrasing it or reframing it, I think, that shows those overlaps a lot more than what we currently have. Because at the moment, it does look very onerous.

I should say, as well, as a sector, we were obviously pushing for a lot more in some of those elements of the universal actions, particularly around soil health improvement and things like that; we were asking for a lot to be put in there, a lot of stuff that a lot of farmers do already, which you've already heard about. But, obviously, Government decided to go down this more simple route that they were confident that most farmers—

11:25

Relative to what it could have been. You could simplify it further, definitely, and I think that will happen. But I think the original plans were to go for a lot more complicated farm-level assessments of what could be done and improved on different levels. There was a lot of pushback to that in stakeholder groups because of the amount of resources that would go into mapping it and working with consultants, which would use up a lot of budget. And then, we ended up with things like—I mean, the obvious one is that the 10 per cent tree rule came about as a way of avoiding all that.

Thank you. It was just to develop the thoughts around the optional collaborative layers and, Alex, you've touched on it there in detail, but, Andrew, I want to give you an opportunity to get into the weeds on it: 17 universal actions, where the budget should be balanced; is 17 too many or too few; and then the optional collaborative layers. 

Well, I think you've heard already this morning that it's not 17 for every single farm; there will be some that would have to do all because they actually apply to that farm, but it's not necessarily the case that all farms have to do every single one of those, because some don't have peat, for example, some don't have sites of special scientific interest. So, yes. It does look like a long list. I think we've got sympathy with what Alex is saying in terms of how that could be better presented. I think the forum is also mindful that the supply chain is increasingly looking for their supply chains to be evidenced and able to demonstrate the good stewardship of the land, which I think the scheme is trying to support, through having to measure and look at soil health, for example, as one example. So, there are these self-interest reasons for actually trying to do those actions.

But I'd also just reflect on what Alex and Rhys were saying about the complexity of the universal layer. Clearly, we need to get as many farmers into the scheme as possible; I think the forum's very clear on that. They need to be on that journey and you've heard that already this morning. If that means simplifying the layer in some way, taking out some of those requirements, then it's not necessarily going to work if the budget is still retained at a sort of rough share, as it currently is, between BPS and the environmental schemes. So, the budget allocation needs to reflect just exactly how much policy ambition is delivered.

So, there's an agreement there of potentially reducing the 17, or remanaging, reframing, restructuring the 17 to make the scheme more attractive, for farmers to go, 'Ah, actually, that is something that I can apply and therefore deliver the environmental benefits that a sustainable farming scheme would develop and deliver', but the budget needs to be, then, equated for where the larger environmental elements are achieved.

If that was Welsh Government's decision to simplify, yes, there would need to be a budget to reflect that it's delivering less in terms of that SLM objective. But I think the first step is to actually do a better job of communicating what the benefits of those 17 actions are and how they relate to actual farms. I think that's a missing piece in this conversation.

Diolch, Cadeirydd. It's coming to crunch time, really, now, isn't it? We've heard a lot in this session and previous sessions around some of those knotty issues. So, I suppose one of the questions I'll ask you, and I'll open it up to everybody—and I asked the farming unions the same—is: are you confident that we'll be able to hit that target of January 2025 to roll SFS out?

You're looking at me, so I'll go first. I think it's a challenge. We have lost a lot of time in certain areas. It could be done, with a lot more effort and a lot more resources, shall I say, from all of us, as I think Huw said, burning the midnight oil, and that's going to be required. I think there is talk about whether there is scope for some phasing of this. I think, ultimately, a delay would be the worst thing you could do. We've had this situation now for many years, and I think that more time in purgatory, when no-one quite knows precisely what it's going to look like in five years' time or three years' time, makes it harder for farm businesses to actually plan and decide whether they want to engage with the scheme.

I think, what has disappointed us, and I know that Rhys touched on this earlier, is, given the Welsh Government has spent 20-odd years managing and designing the advanced agri-environmental schemes, which we suspect will sit somewhere in 'optional', it's disappointing that they're not ready to go. So, I think if we are going to do some phasing, there needs to be some effort to advance some things that should be deliverable much quicker, if some other things are going to be slowed up. But I would like to think that we could get something running next year. I think one of the benefits that I'm told about by my colleagues in England, about what they did there, was learning on the job a lot more, and sometimes we're letting the perfect be the enemy of the good. So, at this point, it would be good to move forward, where we can, where there is some consensus, and, hopefully, the Minister will highlight where that could be next week.

11:30

I think I largely agree, in that it feels like the scheme, as proposed last year, isn't going to be ready in time for launch next year, but elements of that universal layer could be brought in. And I think—the conversation's already touched on this several times within this session—that Welsh Government should know how to do a lot of the optional action support already from those years of experience through previous schemes. So, that bit shouldn't be the difficult bit to be introduced.

For organic, the forum's really concerned that we're in this vulnerable position as a sector. Yes, it's good that there is some support available this year, but the budget under Glastir organic was £3 million; it's now around £2 million. So, that's a reduction in support. The organic market is still growing in the UK. It's about £3.1 billion, and that's had 12 years of consecutive growth. But the area of certified organic land in Wales appears to be dropping, and we expect it may drop further when the stats come out, which should be any day now, for last year. So, there is a risk that our supply chain is just not going to be geared up to deal with that demand, and it will be coming in from elsewhere instead. So, I think we need to get on with getting those optional actions for organic, as Welsh Government have proposed, in place as soon as possible.

In just touching on the element that some universal actions, where there's agreement, could come forward and could be implemented, that still produces an element of uncertainty for farmers though, doesn't it? Because what you're doing then is you're having one track of the scheme going that way without that other track being worked out. So, that still has the problem then of instability for farmers, doesn't it?

I think the farming unions made this point very clearly in the last session. It's better to get this right now, where we get more farmers signed up, so say closer to 100 per cent of farmers signing up, rather than going forward with this now, where you might get 50 per cent. The gains that would come with more sign-ups would far outweigh potentially that delay and what we might lose in that process. How would you respond to that? Because, I mean, the logic is there, isn't it? The more farmers that sign up to it, the better the scheme will run and the better outcomes we'll have. 

I think, fundamentally, what will dictate when farmers sign up to it and how many do it will be what the offer is on the table, in terms of money and how that relates to the amount of actions needed. We are not in that space yet still, sadly, where we know how all that fits together. I don't think there's an expectation that every farmer is going to sign up in year 1, and I think that continuing part of BPS pretty much guarantees that's going to be the case. I wouldn't expect the majority of farmers to be in the scheme until year 2 or year 3. So, we do have more time than it seems in order to get a lot of this set up, if we do start next year.

So, I'd be curious to learn what the Cabinet Secretary's thoughts are on phasing, if he does do that. But what actions people want taken out or that they find difficult is something that has never, really, been articulated so far in this discussion. So, hopefully, in the next two months, we can have that honest discussion about where the problem is, where the knotty issue is. Everyone knows the tree bit, which has sadly dominated the debate, but that's blanked out the other bits, because I think, when we've had the discussion sessions you've had, actually, when you go through the actions line by line, it's very hard to disagree with a lot of them. So, it's about how you deliver that and how you make sure that the money that is attached to it is appropriate for it. If you sort that out, it might actually be less of an issue than we currently fear.

11:35

Of course, we're waiting for the statement from the Cabinet Secretary next week, which might set some of this out. I don't know if anybody—. I'm conscious I've neglected the screen, so I'll go over to Rhys and Rhys.

Well, I'll assume you were going to me first.

I know Rhys well; we'll have a squabble over a paned at some point or other. I think 2025 is going to be a big ask, in terms of a starting date, but, as Alex mentioned, we weren't expecting everybody to be early adopters and go in on year 1, so there is that capacity to learn as we go on. I think if we simplified it and weighted universal actions so that they were a little bit fairer in relation to size of holding and, if I can just put in as well, towards livestock producers, because a lot of the universal actions seem to be a bit heavier towards those producing livestock than on the arable sector, but we'll park that one there—. But, I think, fundamentally, what we are keen on is that we get going, because our interest and concerns are the effect it has on those holdings with SSSI and those that have been in Glastir in the past, which are now having a massive impact on their incomes. We're seeing already very fast reactions occurring with massive reductions in suckler cow production in the upland, which is something that we're concerned about because of the changes in grazing patterns that it proposes and the effect it has on diversity. So, the impacts are being felt straight away, and, to be honest, Habitat Wales hasn't been the stopgap mechanism that it could have been if it had been consulted on more widely and developed a bit better. So, there are concerns about how effective that has been as a measure and the effect that losing the higher tiers of payment is going to have especially on the marginal holdings where they are a significant portion of income. Rhys, over to you.

I'm resigned to the fact that I'm Rhys No. 2 now, aren't I? [Laughter.] I think, yes, it's going to be a challenge to introduce the whole scheme by January 2025. Certainly, when the Government started consulting on this, I wasn't expecting to be here today still talking about the nitty-gritty detail, if you like. I suppose I don't have as much of an issue with the phasing in of the scheme. You could bring in some other 'no regrets' elements in the first year, which would allow some farms—the early adopters—to get used to the scheme, a different way of working and the scheme's operation, and any sort of teething issues could be addressed and tackled in time for when the majority of the industry accesses the scheme.

Just to add to what Alex was saying, in terms of if it is being phased in, and if the Welsh Government at this moment have an indicative budget for this universal layer based on the existing requirements, then, if it's being phased in, the size of the budget should reflect that, if the ambition is being lowered. Certainly, then, there's scope to bring in some of the more ambitious optional and collaborative elements. We've talked about payments for organic farmers. There's nothing in this scheme at the moment that rewards organic farming. Yes, organic farmers are, probably, well placed to enter the scheme a bit more easily, but there will be a lot of non-organic farmers in the same boat. So, there's nothing there to distinguish, differentiate or reward additionality, and the same goes for payments for SSSI management, for example—that's a big red flag for the network, really. It feels like those who are managing the best high-quality habitats are being punished, really. 

Just in terms of how you group the actions as well, I think some of them are cross-cutting. You could, potentially, group habitat maintenance, woodland management and managing peatlands under one action because it is, essentially, habitat management, which then, sort of—. It becomes more digestible, I think, to farmers. On the face of it, it can be seen to be quite overwhelming.

And just in terms of the payment methodology, some actions that are proposed to be area-based payments—for example, good farm biosecurity—well, the effort to comply with those actions might be the same if you're a 300-acre farm or if you're a three-acre farm, particularly if it's having the infrastructure there on the farm. So, potentially, that payment methodology could be changed there to be per item as opposed to an area-based scheme.

11:40

Thank you. Just to tackle the most contentious issue, or the one that's concentrated all the noise, which is the over-10-per-cent tree cover proposal, we've heard from the farming unions that some farms are simply not suitable for 10 per cent tree cover. Were we to change the universal requirement, how would we then meet the Climate Change Committee's recommendation of annual planting rates of 4,500 hectares of tree planting? Shall I bring in Rhys Owen first, just so you're not neglected? [Laughter.]

I'll be the fall guy on this one. As designated landscapes, we're very concerned, to be honest, with the 10 per cent blanket aspiration because of the sensitivity of a lot of our landscapes in terms of how they look, what they include in terms of archaeology, designations, et cetera. So, we've proposed that the tree planting could possibly sit better as an optional layer, and utilising maybe some of the funding from the bracken area payment to be redistributed towards tree planting or habitat development, rather than paying for bracken-covered areas. I think that would deliver more. If you are putting it in the optional layer, you're asking people who have a genuine interest in tree planting and enhancing their growth in looking after them, rather than simply doing it because they have to, because the maintenance and upkeep is going to be much better if you've got a genuine interest in having them there. It probably might sit better in the landscape as well. We've got concerns that the arbitrary 10 per cent will lead to inappropriate planting probably in the least productive, most awkward corners of the farms, or on places that are going to have a significant effect on the landscape or other habitats, such as curlew nesting sites, et cetera. Despite a lot of mapping and availability we've seen already with Habitat Wales, there are issues in the quality in that mapping. So, by having it as an option layer, it gives you a little bit more scrutiny and control over what goes where and at what densities, and it also gives you a better tapered start to be able to actually supply all these trees, which is something that's going to be a big issue for Wales of having local—

Thank you. First off, it's a real shame that trees are being portrayed quite negatively at the moment, and it seems to be this narrative that pits trees against food production—that, basically, if you have trees on your farm, you need to sacrifice food production. And it's the same for the 10 per cent habitat rule as well. There's a misconception, and a phrase I often hear is that the scheme expects farmers to take 20 per cent of land out of production, which is not the case if you read the consultation. So, there are multiple benefits of having trees on your farm, but I think any tree planting on a farm needs to be supplemented by sound advice and guidance so that you look at the best ways of integrating trees on your farm landscape. 

I happened to be at a talk that Farming Connect had organised the other night in the village hall. A farmer there said he'd planted tens of thousands of trees but he hasn't planted a woodland. What he's done is he's planted shelter belts, he's planted hedgerow trees, he's got infield trees, silvoarable, silvopasture, and there's a way of doing that in a way that benefits the farm business and benefits the environment. So, it needs a lot more thinking behind it and, certainly, in terms of flexibility, that needs to be incorporated as well into the scheme.

11:45

Thank you. Okay. So, Alex and Andrew, you were both at the WWF seminar last Wednesday in the Senedd, and, obviously, there was a lot of evidence produced about the benefits of trees, both for making farming more sustainable as well as flood management. So, I just wondered whether you agree with the other two speakers, particularly Rhys Owen, who was saying maybe this should be part of the optional, as a way of promoting trees as an intervention for more sustainable farming. Has enough work been done on that? The people who are really anxious about this, is it that they simply haven't had the conversation with people like Niels Corfield or, indeed, the other farmers we heard from?

I think a lot of this has obviously been very controversial, and I would agree with what Rhys 2 said about the misconceptions out there and the oversimplification of the narrative, because I've found myself, over the past six months, having conversations with people who are basically describing a policy that doesn't exist. The Welsh Government had already added flexibility, particularly about appropriate areas for planting and things being excluded and, when you got into it, the 10 per cent wasn't really 10 per cent, and so on. But, leaving that aside, I think the wider problem has been—and part of what Niels said last week about this—that there's a little bit too much of a focus on trees and carbon. And I say that as an environmental NGO, in that the great benefit of trees is far beyond carbon as well; it is about that livestock, animal welfare management, that prevention of flooding, biodiversity as well, and if we focus a little bit too much on just that carbon issue, we're missing a trick here, really.

So, I think, ultimately, when you look at the evidence of sequestering and the combined multiple wins across the system, as far as I can see, from various organisations I've spoken to, trees do always come out at the top of that. And I think, as we heard today, nobody in this debate is anti-tree. I do think—and I know that the wider NGO sector thinks this as well—that having that universal requirement for woodland creation is very important, and I think that should stay. I think the argument is more over how much that commitment is, and it's the 10 per cent that has caused the debate rather than the idea of every farm could have more trees, and I think every farmer—almost every farmer—in Wales would say, 'Yes, there is capacity for some more trees here'. There are ways around this, and I know there have been lots of ideas bouncing around. One, for example, is to look at a scheme-level target. I think if you are going to go down that route, then you're probably going to have to set one that's higher than 10 per cent, to keep in line with what the UK Climate Change Committee are saying, particularly as they had—I forget the precise numbers—I believe, a 2 per cent addition by 2025 and a 5 per cent addition by 2035. Now, if you accept that tree cover currently on agricultural land is just shy of 7 per cent, then you're really looking at, probably, about 12 per cent by 2035. That seems like where you'd end up in that ballpark. So, that's one possibility.

Other people have suggested lowering the target to 5 per cent. I know the Nature Friendly Farming Network have suggested things like that, and then also there have been ideas about every farm having the requirement to expand the cover by 4 per cent on what they have. So, basically, just moving us out in a way that heads us towards 10 per cent as a nation, and all those, I think, the Minister is considering. If you do go down this route of lowering the ambition in 'universal', then there may have to be some requirements to enter 'optional' about minimum cover, so that's something to be explored. But, fundamentally, I would say you need to keep that woodland creation element in 'universal' as a requirement, and then debate how much that is and where it is appropriate, because, as we've known from the surveys that have been done, most farmers can do this. And if they get the money right, an awful lot more farmers will do it. I come back to that point about money: this is a business decision for a lot of farmers out there. If the cash is there and it makes sense from a business perspective to do it, they will do it.

11:50

Okay. So, how do we guard against the existential risk that Wales Environment Link has spoken about, which is that the greenwash brigade will simply buy up the land in order to just meet carbon obligations?

I think that's the great concern we have. We're seeing the status quo where farm businesses are failing and they are selling up to these big organisations. I think it's critical that there is a mechanism in place that is Government supported that is integrating woodland creation with agriculture. So, we talked about agroforestry a lot; I think that's vital, because, when they go into those private schemes, that's not happening, and that can be bad, and, if that doesn't work, we're continuing the status quo where more farms fall out the system.

The other side of the coin, which I think is equally important, is the Government needs to find a way of using that capital that is available, because we know the money's there. Now, rather than allowing these companies to go around the country and buy up land where there's a willing farmer to sell, it would be much more sensible, I think, and potentially better for the wider SLM objectives, if we find a way of capturing that money within the SFS itself. So, we've talked a lot about innovative finance, where you look at blended mechanisms, and I know that the new Government, and Huw in particular, is keen to explore that, and it is a work [Correction: 'there is a Welsh Government taskforce'] that I and others are on to look at it, but whether they will align in the time frame is the question.

Yes. Just before you do, I think—. Sam, just very, very briefly, because I'm very conscious of time. So, can I ask everybody to be as succinct as possible, please, because we haven't got much more time and we've got other areas we'd like to cover as well?

Yes. Thank you very much, Chair. I appreciate it. Just on the tree planting policy—and you're right, there's a uniformity in agreement that trees are of benefit. Have Welsh Government lost the argument with the sector on this due to just their insistence on that 10 per cent figure?

I think it's a comms issue a lot of the time. I think they have—. As I said at the start, the 10 per cent grew out of a desire for a simplified ambition within the scheme to avoid deep, farm-level analysis of what was possible. So, it was a response to criticism, largely from farming unions, to go, 'This is too much of an ask. Do something simpler that means that there isn't money wasted elsewhere.' But, when they announced the policy initially, it was only 10 per cent, and then, when you looked into the detail, it was, 'Well, actually, there are all these caveats; there's all this flexibility that's there beneath it', but by that point the horse had bolted. And then, when we came back to it a year later, I think it was two Royal Welshes ago it was announced, and then there was the last Royal Welsh where we had a situation where farmers were saying, 'I'm not going to participate because of this', and then they had to communicate that flexibility again, where they basically said, 'Well, actually, there are all these caveats. Land that isn't appropriate for trees doesn't count', all that kind of stuff.

And then we got into the autumn where there was another move in response to this, where they started double counting. So, if you had woodland that met habitat criteria, it would count for those 10 per cents. So, they have moved quite substantially behind the scenes, and I think, as we saw in the consultation period, what was being objected to was very different from the proposal that was on the table, but how do you communicate and win back people by basically saying, 'Actually, what you've been very angry about isn't really what we're asking you to do'? But that's where the debate is. I think that's a level of complexity in messaging that the Welsh Government has historically struggled with. It's not just on this issue—across Government portfolios, really. I think Huw coming in and restarting this conversation and reframing a lot of the things that have been said, if that is scheme caveats and more flexibility at farm level that reflects need and also landscape a bit more, then maybe there's a way through it. Because I think, fundamentally, as we've heard this morning, farmers aren't anti-tree, but the debate is making it look like that to the wider community, and I don't think that's a good place for anyone to be in.

So, I think there's hope, but without, I think, a restructure of how the universal tier is presented that's going to be difficult, but I do think that universal commitment needs to be there.

Thank you. Andrew, you'll be aware that Waitrose announced yesterday that they want to move away from unsustainable production to what they call regenerative production. So, the supply chain want evidence that things are sustainable or regenerative. How do you think that we—? What needs to be done by the Government to ensure that this new market—? Because the others will follow, because that's what customers want. How are we going to ensure that we have a slice of the action, in terms of organic farming in Wales?

11:55

Well, I suppose, in terms of the broader context of being able to demonstrate sustainable farming, I think the SFS should be recognised as something that describes the elements of that, in terms of good soil management, reducing inputs, trying to reduce the amount of emissions. All of these things, I think, are quite valuable proposals. So, that comes back to that issue that I touched on previously about it delaying the introduction of those. That just is storing up greater difficulty, because the supply chain, as you've described, is increasingly looking for its impacts to be managed and addressed. So, here's an opportunity for farming to be supported to meet those requirements.

Okay. So, looking at small farms and horticulture more generally, the CAP just excluded anything that was under 5 hectares. So, now that the Government has said that people can enter the scheme if they can demonstrate more than 550 labour hours a year—that is a perfectly reasonable and doable target, even in November when not a lot's happening—. So, what are the barriers now to increasing horticulture and nurturing our small farms, given that our food security is a massive issue around these products?

Yes, the forum definitely recognises that there needs to be some extra support for the very small horticulture, as you described it, operators. The labour hours requirement may be taking us in that right direction. Is 3 hectares still too large? Some would say it is.

That's the proposal with the SFS.

So, is 1 hectare more likely to actually capture more? I think there are other things to do with how the scheme is administered. With the recent rounds of horticultural support grants, I don't think there's a pre-application stage, for example, which would have allowed just quick expressions of interest or applications to go in, without incurring the cost of drawing up a business plan or potentially paying for consultants to do that, and then find, as I've been told through one producer, that it was rejected. So, there's some complexity in the bureaucracy that needs to be addressed. And there's a whole host of other things around small horticulture to do with the planning system, which also needs to be looked at, in terms of producers also need facilities on site, ideally somewhere to live close by. So, all of these things are barriers to that type of—.

Okay, but this a massive food security issue, and we aren't making the progress we need to make. So, do you think the things that you're suggesting, which are, obviously, revisiting the planning system and possibly reducing—. Why only 3 hectares? Because you can produce a lot of food on a very small piece of land, and the price of land is something that can be a barrier. Alternatively, being a tenant on somebody else's land—is that something that people are actively pursuing?

I think there's demand from producers to find those opportunities. I think there's more support needed for the likes of Our Food 1200, for instance, that project in east Wales, to come up with the structured agreements that landowners need and give them the confidence that they can work in partnership or through tenancies with those small producers on their land.

Just in terms of horticulture and small farms, regardless if it's 3 hectares or so or 1 hectare, the fact that the payment methodology is an area-based payment means it's going to make very little difference to small-scale horticulturists. I would hope that the standard labour hours would mean that they can access the scheme and all the other supporting mechanisms, because, although the land area is small, the labour is quite intensive. But what would be great is the wider support, really, beyond just area-based payments—payments for the investment in infrastructure, technology, equipment, help with marketing et cetera. Now, there's a role for Government itself, as part of that public procurement process, to offer itself as a market to any start-up or new enterprise. 

And let's not forget that horticulture isn't limited to small-scale farms as well. Myself and Rhys, as farmers here, we could also delve into that. But perhaps I as a farmer don't have the skills or the knowledge to do it, but pairing up, maybe, with a young and enthusiastic horticulturalist as part of the scheme—a collaborative element—would be something I would certainly welcome. 

12:00

Okay. Thank you, Jenny. I know we've only got a few minutes left, so I want to bring in Vikki Howells. Vikki. 

Thank you, Chair, and good afternoon—I should say now—to our panellists. If I can start by asking Rhys Owen a question on designated landscapes, to what extent are the SFS proposals aligned with your aspirations for designated landscapes, and are there any changes that you would like to see, or a different approach that you'd like to advocate for?

Generally, very, very excited. It's something that we've been—. When we saw the role, or the potential role, that landscapes would have in the delivery of, in particular, maybe, the optional, and certainly the collaborative ones, it's what we do best—engaging with people, bringing people together to work collaboratively. It's our bread and butter, so we're very excited about that. We're obviously a little bit frustrated that we don't know what could be included and what we could do, as we've touched on earlier. But, fundamentally, this is going to be one of the main delivery tools that we're looking at to do a lot of environmental or landscape work, hitting on both carbon, biodiversity targets, rural poverty et cetera. So, it's got massive potential. We just need to harness that, really, and, again, it's a plea—involve us early enough and we can help you develop. Because we've been delivering Glastir, Tir Gofal, sustainable management schemes; we've seen the good, the bad and the very ugly. We know what works, what doesn't, and, yes, just give us that opportunity, really. We're chomping at the bit to go.

And if I can just crowbar one thing in at the end, really, we forgot touch on in the tree thing, which is land tenure and the fairness of that element, in terms of asking land owners to be doing all the planting, whereas tenant farmers have that caveat. And just to be aware that there is this fairness issue brewing in rural Wales as well that needs concern on that one. 

Yes, if I can just build on what Rhys was saying, from a personal point of view, ourselves on the family farm, and 10 other farmers in the Wnion catchment in Meirionnydd, have actually been working on a collaborative scheme with Rhys and Eryri national park on a water quality and a natural flood defence scheme, and it's worked very well, and the relationship between the park and the farmers has been all around helping each other meet our own targets. So, yes, if the committee is ever interested in taking a visit up to see what we did, we'd be more than happy to host you, because it's a potential blueprint for the collaborative element of the scheme. 

Great, thank you. I know we're really short of time, so if I can move on to my final set of questions, which I'll open to anyone in the panel who wants to answer, but please don't all feel that you need to. I'd like to look at lessons learnt, and what could be learnt from the previous agri-environment schemes, such as Tir Gofal, Glastir and the Habitat Wales scheme, and also if there are any reflections on agricultural schemes that are being developed in other parts of the UK as well. So, anyone who wants to come in on that, Chair. 

I think the fundamental thing for me is always 'build it and they will come.' With all those schemes, they have had massive uptake from farmers and they have shown themselves to be very beneficial. I'm old enough to remember 12, 13 years ago, I worked in this building—Paul and Jenny were here; I don't think anybody else was back then—when we were developing Glastir. At the time, there was a lot of doom-mongering that Glastir was terrible, it was way worse than what we had before, it would lead to the end of the agriculture industry in Wales. Twelve to 15 years later, we're now talking about it wistfully as quite a good, effective scheme. So, I think it does kind of talk about how, actually, with a lot of the doomsaying at the start, these things can work, with farmer buy-in, and they can be successful. So, it's having the confidence to move ahead, which I think the Government was. I think it was Alun Davies at the time. To be fair to him, he stuck to his guns and pushed ahead with the scheme, and now we look positively upon it. So, that fills me with a bit of hope, despite all the arguments we have about the SFS at the moment, that there may be light at the end of the tunnel.

12:05

Yes, just very briefly. I think the learning from, say, Tir Gofal and Glastir Commons has been that having a case officer to actually work through the scheme for that farm has been really valuable. I appreciate that the Government has got a huge challenge to try and scale that up for potentially 16,500 farm units, but as we've just explored through the 10 per cent tree debate, really the best way to look at those opportunities on farms is through having that opportunity to talk it through.

Just a few things. Just to reiterate what Andrew was saying about having that sort of local officer or trusted adviser to help navigate the scheme, we have to remember that only about 3,000 farmers or so were in Glastir, so potentially having 16,000 farmers entering the SFS will be a challenge in terms of mindset and operating scheme structures et cetera. That's very, very important. And that was a crucial ingredient, really, in the success of the results-based scheme that they've developed and introduced in Ireland—having that sort of trusted local adviser that you can rely on to visit the farm and ask any questions and work together to meet objectives.

And just to reiterate this morning's session, really, on how not to do things, the Habitat Wales scheme, I think, is a perfect example, with no consultation and the slashing of payment rates. The response from environmental organisations and the farming industry to that scheme has been damning. And just looking over the border with ELMS in England, and looking at some of the payment rates over there, for example: £642 a hectare for species-rich grasslands. That's a payment that really values the multiple benefits there, more than some of the habitat payments that we have in Wales.

Very concisely, I think over time, we've seen the quality of our agreements and schemes declining, to be honest, from Tir Gofal through to Glastir. Because we've moved into a cheaper delivery model, or supposedly, with fewer people and advisers involved, there are more national prescriptions with less flexibility, which have led to damaging and undesirable actions being taken up. And then we've seen things like the SMS, which have been very, very bureaucratic, shifting goalposts in year. They bankrupted a couple of organisations running them. There are some bad examples of what not to do there, certainly, but I think certainly if you're looking to deliver and to be effective, you need some sort of flexibility and to be able to do things at a regional level, so that you can take in the variations that you have in geography, climate, topography, markets et cetera across Wales, because uniform, blanket prescriptions don't cut it, to be honest with you, especially if you're going into an agreement that's rolled on because of administrative purposes; you're stuck in that same cycle with no review or break clauses or opportunities to adapt, and the penalty system makes it very, very hard for you to make tweaks locally. It's just prohibitive. So, there are some good examples out there, but some very bad ones as well. I don't say this very often, but we're quite jealous of the English national parks at the moment, with their Farming in Protected Landscapes programme. There are socioeconomic and environmental grants available, delivered regionally. It's a dream.

Thank you very much. Thank you, Vikki. I'm afraid time has beaten us, so thank you very much indeed for being with us today. Your evidence will be very important to us as a committee in scrutinising the sustainable farming scheme going forward. A copy of today's transcript will be sent to you in due course, so if there are any issues with that, then please let us know. But once again, thanks for being with us today. We'll now take a short break to prepare for the next session.

12:10

Gohiriwyd y cyfarfod rhwng 12:10 a 12:18.

The meeting adjourned between 12:10 and 12:18.

12:15
5. Y Cynllun Ffermio Cynaliadwy - Rhanddeiliaid eraill
5. Sustainable Farming Scheme - External views

Croeso nôl i gyfarfod Pwyllgor yr Economi, Masnach a Materion Gwledig. Fe symudwn ni ymlaen nawr at eitem 5 ar ein hagenda, a hon yw ein sesiwn dystiolaeth olaf heddiw ar y cynllun ffermio cynaliadwy. Gaf i estyn croeso cynnes i'n tystion? Cyn ein bod ni'n symud yn syth i gwestiynau, gaf i ofyn iddyn nhw gyflwyno eu hunain ar gyfer y record? Efallai gallaf ddechrau gyda Janet Dwyer.

Welcome back to this meeting of the Economy, Trade and Rural Affairs Committee. We'll move on now to item 5 on our agenda, and this is our final evidence session today on the sustainable farming scheme. May I extend a very warm welcome to our witnesses? Before we move to our questions, may I ask the witnesses to introduce themselves for the record? Perhaps I'll start with Janet Dwyer.

Good afternoon, everybody. My name is Janet Dwyer, I'm professor of rural policy at the Countryside and Community Research Institute, University of Gloucestershire. 

I'm James Richardson. I'm the chief analyst and interim chief executive at the UK's Climate Change Committee. 

Thank you very much indeed for those introductions. Perhaps I can kick off this session with a few questions, and perhaps I can ask Mr Richardson a few questions. To what extent do you think the Welsh Government has engaged with your committee when designing the sustainable farming scheme proposals?

We have fairly regular engagement with the Welsh Government, and of course we produce reports for them in terms of progress and target setting and so on. But we haven't, as it were, been involved directly in the detail of designing the policy itself, and I wouldn't particularly expect us to be. But certainly the Welsh Government know our views on the key areas involved here. 

And from your perspective, you believe that you've had sufficient engagement from the Welsh Government.

12:20

Yes, we're very happy with our relations with the Welsh Government.

The Welsh Government says that the 10 per cent tree cover rule was calculated based on your committee's progress report recommendations on tree planting rates and agroforestry targets. Is the 10 per cent tree cover rule appropriate, do you think, to meet your committee's recommendations on tree planting? 

It's broadly in line with what we said on agroforestry. In our progress report, we said we needed to see an increase of 2 per cent by 2025 and 6 per cent [Correction: '5 per cent'] by 2035. The 10 per cent figure, when you allow that roughly 6 to 7 per cent is already covered, is in the right ballpark—it doesn’t exactly match those numbers, but it’s the right kind of area for agroforestry. What I would say is that the agroforestry contribution on its own is not sufficient to get to the tree planting targets that we think Wales needs to meet, but of course, you wouldn’t expect it to be—there’ll be a mix of different approaches.

Obviously, you've seen farmers' concerns around this particular issue. How do you respond to their concerns?

I think there is clearly a range of different ways in which you can promote greater tree planting within the agriculture sector within Wales, and it’s a matter for the Government ultimately to choose how to do that. You’ve kind of got a trade-off between the approach that’s being taken here, which is relatively standardised, saying all farms participating in the scheme should have the same level of cover—. Obviously, it’s slightly more complicated than that because certain bits of land are exempted and so on, but it’s broadly a standard requirement, and that has the advantage of simplicity and it makes it relatively easy to measure, but the risk is that it doesn’t suit everybody individually.

The alternative would be a more tailored approach, where you say some farms could do a higher number, some would do a lower number, and you would tailor the degree of funding towards that. And that would be easier for some farmers to address, but of course, it’s more administratively complicated, and that may be a concern. And it will mean that funding goes to different people, so you’d have to take into account that some people who found it easier to plant more trees would then get more of the funding pot, and other people who found it harder would get less.

Would you want to see more flexibility when it comes to this issue as far as the scheme is concerned?

I think these are the choices that the Welsh Government faces. In a sense, from our perspective, what we want is a scheme that delivers the outcome and that works for farmers and for the people of Wales. It's not really for us to say exactly what the right balance is on that, but it's perfectly possible to do it in a number of different ways.

Before I bring in Jenny Rathbone, I think Samuel Kurtz has a question on this.

On that point there where you said 'deliver that outcome', this is something that I've been trying to rationalise in my head. The outcome is what? Delivering tree planting, carbon sequestration, increasing canopy cover—what is the outcome that is trying to be achieved?

Ultimately, it's carbon sequestration. We measure that in terms of tree planting rates, as part of, obviously, an overall picture that includes numerous different contributions. Because it's easier to measure those tree planting rates than to precisely measure the amount of carbon sequestration. But ultimately, it's carbon sequestration that matters here.

And are there better ways, potentially, of delivering carbon sequestration than just tree planting, or is it a suite of measures that is required?

It's a suite of measures that is required, and there are certainly other ways: hedgerows, improving soil management—these things will also sequester carbon. There are also engineered means of doing this, some of which use energy crops, so that would be another thing that might generate an income for farmers. But tree planting is a very effective way. They don't do it immediately, but they do sequester a lot of carbon per hectare of land. So, we do see it as a key part of an overall package to get us to net zero.

Thank you very much. Thank you very much for coming to see us today. The UK Climate Change Committee has recommended extending hedgerows by 20 per cent by 2035 and better management of existing hedgerows. To what extent do the sustainable farming scheme proposals address this recommendation, given that, to me, they seem to be overly prescriptive about exactly how you need to do it? But maybe there’s a good reason for that.

12:25

So, I think there are two halves to this. I think the universal actions should address the questions around better hedgerow management, and that is important. Whether there is a slightly more flexible way of doing that, Janet might be a better expert on that than me, but it’s certainly intended to address that question around maintenance of the existing hedgerows, which is important for that carbon sequestration. But the universal actions won’t really do much for increasing hedgerows. Now, it’s in there in the potential optional action, so it is being considered, but there’s just a lot less detail on that at the moment. So, we would certainly welcome more detail from the Welsh Government on how those—as a whole, but certainly on that particular area—optional actions are going to work and whether that will be sufficient to incentivise new hedgerow.

How much of it is to do with carbon sequestration as opposed to climate mitigation, or, indeed, biodiversity crisis?

So, I think you’ve got three different things going on here, and that is one of the reasons why this is complicated. You’ve got carbon sequestration, you’ve got adaptation of the environment to climate change and you’ve got biodiversity. And many of these actions, putting in new hedgerows, potentially support all three of these objectives. So, there isn’t a conflict between the objectives, but it does inevitably make it complicated. You need to put the right hedgerow in the right place to achieve all of those objectives, and, of course, sometimes you’ll be prioritising one over the other in any particular intervention. What matters, of course, is that the package as a whole supports all of these objectives.

Yes, okay. I'm at risk of broadening it already, but I think it’s very important that, for an individual farm, they look at the potential on their farm to make a better job of managing what they’ve got, and to think about the opportunity for new planting, whether those be trees or hedgerows. And, as such, therefore, the way in which the scheme is being rolled out, just emphasising the universal layer and not giving much detail on what the options would be that will come later, makes it really difficult for individual farmers at the moment to know whether the scheme is going to be attractive for them, because, actually, from the point of view of the farm, you’ll need to know both—you need to know what is going to be required for the universal layer and what the money might be available for doing something differently. And as James has already said, every farm’s potential to contribute is going to be different. So, if you only offer half the package, which is the bit that everybody has to do the same, you’re really constraining farmers to be able to have a positive response to what’s on offer. So, I would say that you could realise all of those synergies—the gains for biodiversity, the gains for the adaptation side of climate change, and the mitigation side, by having the whole package available for people to think about, ‘Yes, I can do a bit of that, I can do bit of this, and I can make it work’. But if you’ve only got half at the moment, then it’s really impossible to be sure that the scheme is going to be a good deal for you.

Okay. Thank you. That’s useful. Moving on to perennial energy crops, the Climate Change Committee has argued we should follow what England does in this incentive. Biomass schemes don’t have a very good press, in my view, so why are you arguing that these energy crops, as opposed to planting food, are a good use of our land?

So, it’s clearly part of an overall mix, and you do have to be careful with energy crops to ensure that they are consistent with your biodiversity objectives, but we do think there is a role for some energy crops in the right place that can enhance the biodiversity of that land, and it can provide a valuable resource that can be used with carbon capture and storage, and this is very important, because a lot of debate is about the use of biomass without capturing the carbon dioxide that’s given off. That’s not super helpful. But if you capture the carbon dioxide and store it permanently, then that generates a long-term negative emission that can be used to offset some of things that are really hard to abate, like livestock, and get you to the 'net' bit of net zero. And so, we do see it as having a role within the overall system. There is a balance to be struck. The alternative is really a technology called direct air capture, which literally extracts carbon dioxide from the air and stores it permanently. So, there is a balance between these two different ways of getting what are known as geologically stored removals, as opposed to the sequestration in a tree or a hedgerow. But it is part of the picture.

It's also, of course, a potential source of income for farmers, and I think, in a changing world, it is important that there are ways for farmers to diversify their income.

12:30

Well, all of these things come together. The point about the biomass is that ability to create a negative emission. Wind is great and it generates, essentially, zero-carbon electricity, and that is really helpful, but it doesn't get you below zero. However much wind you put on the system, you're not going to get lower than zero.

Okay. All right, so this is one to think of for the future. Moving on, you are arguing that we need to address the amount of emissions from agricultural machinery if we're going to actually meet our objectives. Could you elaborate on that, because it's not something I've given much thought to?

It is a complicated area, but, obviously, there's a range of machinery on farms, and much of that will run off diesel and, therefore, is a source of carbon dioxide emissions—

Yes, there are various options, and some of these things, to be fair, are less well advanced than others, I think it is important to say. This is not something where you could change everything overnight. But if it is possible to run that equipment off electricity in particular, or in some cases, potentially, off hydrogen, then that would create a decarbonisation pathway. That is probably easier at the moment for static machinery than mobile machinery. So, if I want to go out and buy an electric tractor, I'm going to struggle to find one of those on the market. These heavy vehicles are harder to decarbonise than lighter vehicles like cars and vans. But we do think, over time, the market will move in that direction. We're already now seeing quite substantial—what I would think of as trucks—heavy vehicles coming in with batteries. As the market moves into those heavier vehicles, that will bring improvements in battery technology, which will then also help with decarbonising tractors and other farmyard mobile machinery, where the weight-to-power ratio is a significant constraint.

But hydrogen remains an option. The challenge with hydrogen is it's quite expensive to manufacture—

But we do have the odd heavy goods vehicle and public transport vehicles running off green hydrogen, so this is something you are hoping could be spread to the agricultural sector as well, for these heavy vehicles.

So, certainly, there are people working on heavier vehicles that are hydrogen powered, and, in the end, the market will decide which of these technologies takes over.

I just wanted to come in. Actually, the Government's been investing quite heavily in agri-tech in which the—

Yes. So, there's a lot of work going on actually thinking about whether the standard way of dealing with machines on farms may not be the same in 20 years' time. This whole thing about heavy machinery is it becomes more and more difficult to operate heavy machinery in circumstances where you have a lot more rain, where you have the different climatic conditions that we're going to have to adapt to. I've been to Japan, and I've seen places being farmed with much, much smaller machines. Actually, once you get smaller, the opportunities for renewable energy sources to power those machines become much greater. So, I think this is an area where some of this investment in agri-tech research will end up with us moving, perhaps, away from these large-scale things that become the most difficult ones to convert towards lighter, more agile, more flexible types of farm machinery. But we're probably looking, maybe, a decade down the road for that. But I think we shouldn't assume that, just because at the moment we have challenges for moving, you know, that alternatives wouldn't become available quite soon.

12:35

Okay. So, is this something that the Institute of Biological, Environmental and Rural Sciences and other people in the network, like you, are doing work on?

Yes. Not so much us, but I think people down the road at the Royal Agricultural University, my colleagues there, and Harper Adams University and others are doing a lot of work on this.

Thank you, Chair. Good afternoon to our panellists. All my questions are for Professor Janet Dwyer. Firstly, in your written evidence, you discuss a PhD analysis of how different types of farms might react to the various elements of the scheme. So, in your opinion, should the scheme be designed to suit all farm types, or should it be focused on certain types of farm?

Okay. So, I think it's a really important principle that the scheme should be available to all farms in Wales. This is about affirming the Government's commitment to sustainable agriculture, and sustainable agriculture is an all-encompassing vision. So, every farm in Wales can make a contribution towards sustainable agriculture in environmental, economic, social and cultural terms, so I think it's important that the scheme design should be open to all farms. Having said that, it plays a different role in different farming contexts, depending on the structure of those farms and the sorts of markets that they're feeding into.

We found very clearly in the work that my PhD student, Theo Lenormand, did that you could almost divide the country into three different types of farms. In the lowlands, you've got highly productive areas, where farmers have a lot of choice and, by and large, you have farms that can make a decent commercial profit under current market conditions. That might be in large-scale dairying, it might be in cropping or mixed farming, it might be in horticulture, more specialist, or it might be in other types of more productive agriculture. And, for those farms, they have an option about whether they want to be part of this scheme or not, and it's more likely that they will come in if there are a range of different options that can fit alongside their farming systems. They're also facing—as we'll come to later—the issues related to the nitrate pollution regulations. So, in making decisions about coming into the scheme, they'll also be thinking about the impact of oncoming regulation.

Whereas, in the hills and uplands, with the more marginal farms, extensive beef and sheep producers, for them, coming into the scheme is hardly optional, because, at the moment, they really require public support to maintain the viability of their farms, and they've been, already, very much uptakers of the previous suite of schemes and also the BPS has been a very important part of their income in the past. So, they will be looking very much to this scheme to help sustain their farming into the future. And then, in the middle, one has farms, some of which have the options and some of which will also see their future as being very much with this scheme. And I think, if you look at the objectives that are in the agriculture Bill that underpin the SFS, those are objectives that should apply everywhere. The key is getting the model right that can work for everybody, and I think, at the moment, that's where the problem lies; it's that what's being asked of farmers in the proposals that have been produced so far is looking like it's an awful lot of extra work for unknown but potentially insufficient reward, compared to what they've been used to under the previous regimes. And that's the shock to the system that they're finding very difficult to cope with.

Okay. Thank you. That's really useful. Can I ask, has your research group explored the particular issues facing our common land farmers, and, if so, have you identified any possible solutions there?

Right. I haven't worked on commons in Wales. I have just completed an 18-month DEFRA-funded test and trial looking at a payment-by-results approach to commons management on Dartmoor. So, I know a little bit about some of the challenges of working on commons. I was working on that project with my colleague, Dr Gwyn Jones, who is based in Wales and who knows an awful lot more about Welsh commons, so I would recommend that the committee might like to consult him if they want specific information on the situation in Wales. But I think there are some—excuse the pun—common features of the challenges on common land, for which the Dartmoor example would be relevant. So, one thing I would say is that it's really important that commons management should be seen as a partnership between commons rights holders and landowners. Often, what's really important is to provide facilitation to help that to happen in a good way.

We all know that landlord-tenant relationships can be tortuous at the best of times, but with commoning you've got the multiple holders of rights, as well as the owners trying to find a way forward. I think that Wales has done a very good thing in the past in investing in commons development officers to help with the establishment of the governance that's necessary to do this kind of management on commons. So, I would say that it's really important to continue to support that role for the commons development officers across Welsh commons, because, often, it's this thing about collective agreement and collective planning that will be the key to success in commons management, going forward.

I think commons in the UK as a whole are suffering from insufficient management. It's not about overgrazing, it's about insufficient effort and incentive to manage those areas in a good way that will benefit both agriculture and the environment, if it's done properly. I think that to do that—to incentivise new management—is a really important feature that the SFS is going to need to think about, and I would encourage them to get moving with this, because, actually, as BPS becomes less significant, with inflation and with the other pressures on farms, there is a real risk that commons management will be abandoned. So, I would really urge you to encourage the Welsh Government to come forward with some positive proposals.

I would also say that flexibility is really key to this as well, because each common has a different balance of pressures and opportunities, and what's really needed is this work with the commons development officers, working at a local level with farmers and owners, to think about, 'What is the problem on this common? What are the opportunities? How can we improve the peat that's eroding? How can we knock back the undesirable species, where you've got a dominance of, say, Molinia—purple moor-grass—bracken or gorse, which are unpalatable and which aren't necessarily contributing to the biodiversity value of these habitats and you need better management to control them?' You might be using virtual collars [Correction: 'virtual fencing using collars'] because you can't fence on a common, or you might be using particular action plans, so, the programmes of cutting or a bit of controlled burning—a whole range of different activities—but really putting the energy back into commons management, I think, is a really important part of future sustainable agriculture in Wales.

12:40

Thank you, that's really, really interesting and useful. A final question from me: Janet, you said that the SFS lacks a specific element to support organic farming. Could you tell us about your suggested solutions to rectify this?

Okay, I think this is relatively simple. I think, at the moment, what's being offered under the scheme—as I've said, I'm critical of the fact that it's only the universal layer at this stage. I think they should have launched the universal layer alongside some of the optional elements to make the scheme more attractive and more feasible for a lot of farms in Wales. But, for organics, what's being offered at the moment is actually taking them backwards, in a sense. It's offering them a lower level of reward for a lower level of achievement than they would already be achieving as organic farmers, and I think that that sends a negative message. What might well happen is that you disincentivise the continuation of organic farming, particularly for the kind of extensive beef or sheep producers, many of whom are almost organic all the time anyway because of the natural constraints that mean there's no sense in pushing production and productivity in some of the areas in which they work.

So, I would say that it's quite simple. We have a lot of good models of organic farming schemes operating elsewhere in Europe, which provide a good payment for conversion, because, obviously, you lose income in the period when you're converting from conventional to organic and you can't yet sell your product as certified organic, and then they also offer a relatively standard payment per hectare, maybe up to a certain level, with a redistributive element to avoid paying huge amounts on very large areas of extensive land. But you need a payment for conversion and a payment for continuing organic management that recognises the additional benefits that these systems offer over other types of farming.

Thank you, Vikki. Before I bring in Samuel Kurtz, I know that Jenny would like to come in on this issue. Jenny.

Okay, I just wanted to pick up on the issue of these people who are already organic because they're on the uplands. The WWF laid on a seminar here last week, and we had two upland farmers, both of whom had increased their profitability by reducing their stock levels. It was just really interesting to listen to them, that actually they were making more money and having a better style of life; they weren't working excessive hours. And I just wondered why this isn't being championed as another way because, obviously, if you reduce your stock, you're reducing your importation of feedstock, there are fewer pesticides. You're really having a more regenerative approach to the piece of land that you are farming.

12:45

Yes. I think there are certainly farms where that strategy is a good way of moving to a more sustainable system, environmentally and economically, but I must say that, at the moment, a lot of that will have been underpinned by the continuing availability of the basic payment scheme. And certainly, I know that farming in upland areas of, say, the north of England or the south-west, where I do a lot of work with upland farmers, if you took away the basic payment scheme support, as they are doing in England, the viability of the farms is still threatened, even if they do this business of moving towards less is more—fewer animals, better managed—unless they've found a niche market, or a market where they've got a direct sales route where they can get a premium as a reward for that better environmental practice. 

So, I think that there are certainly cases where less is more is going to be a good strategy, but often it won't be enough on its own. And I would say the other thing that the SFS misses—and this may not be the SFS's fault; it may be the need for other things to go alongside SFS for the future for Welsh agriculture—but I think we need to look much more carefully at how you bring greater added value to the practice of farming in Wales. We need to be investing in and thinking about more short supply chains, more ways of—

Maybe, yes, but also through supply chains themselves. The amount of money that goes back to the primary producer is often a very small proportion of the end product. And even in an area like red meat where margins are quite small, if you can just remove a few people from the chain, you can give more back to the primary producer. It's often this struggle with trying to remain viable that pushes farmers into situations where they think—. It sounds like a paradox, but we've done some analysis of upland farming economics, and even though less is more might be a good strategy, it's a risky one for people in certain positions. For example, if you've taken a loan out from the bank to grow in the past, you may be locked into that system and you may find it very difficult to step back, unless somebody else is going to take over some of that loan for you. 

I think there are other ways of thinking about added value as well in respect of diversification, not just out of farming, but within farming, looking at different types of crops. But all the time, you have to have your eye on the overall sustainability. One thing we found in the uplands in Wales is this diversification of having a chicken unit, because chicken units make a lot of money, and you get a package, basically, from the chicken supply chain of what you need to do. But then you have a problem with nutrients and what do you do with all those nutrients. If it's a small chicken unit, you're probably okay—it saves you your fertiliser costs, you can use it on the land that responds to fertiliser. But if you have too many, you've got a problem then of nutrient overloading. And, in fact, one of the reasons why the nitrate regulations are now being proposed to be changed has been because of these sorts of trends coming on. From the economic perspective, the chicken unit is great, because it helps to cross-subsidise the losses you're making on your beef and sheep, but from an environmental perspective, it's risky and it's taking you near to a threshold of what's sustainable. 

There's always money in muck, though. Surely, this nitrate has a value. Guano—

This is a really important thing. This goes beyond the SFS, but, really, looking towards the circular economy in Wales would be such a beneficial thing to do, and it links to what you were saying about biofuels and energy cropping. If Wales could look at the moment—. If it looked at the extent to which its agricultural is or isn't sustainable, the main reason it's not sustainable is the amount of input that it's bringing in from outside Wales in order to feed the chickens, keep the large dairy farms in the high level of productivity that they have. And yet they've got excess nutrient and there are other areas of Wales where people are still buying fertilisers. It really shouldn't—. We should be able to, somehow, find ways of joining up those pathways, so that we're being more efficient with our nutrient use.

Actually, one of the recommendations—. I spoke again to my PhD student yesterday, and he said that he thought that one of the ways you could simplify the universal layer of the SFS would be to focus very much more on how you think about trying to reduce inefficiencies in input use, and focus on those. Because, at the moment, you've got 17 things in the universal layer, and a farmer will look at those and think, 'Well, the things I'm doing okay already are okay, but the new stuff, that's an awful lot to do in a very short space of time, and if I could choose to do certain things, if I were given the option, I'd take the big priorities first and do the other stuff a bit later.' You know, a focus on nutrient use on farms could be a really good way of focusing attention on what the universal layer of the scheme might achieve in the shorter term.

12:50

Thanks, Chair. It's really refreshing hearing this panel, actually, because as someone who comes from an agricultural background—touching on a previous point of Jenny's questions around reducing emissions technology—I don't think the SFS, in its current guise, focuses enough on technological advances and the uses of technology in decarbonisation and net zero, and productivity as well, and the ability to be productive in a sustainable manner. I think technology has a larger part to play.

Janet, you should be designing this scheme with the Welsh Government; they should give you an office in Cathays Park and tell you to pitch up and draft this scheme, from the answers you're giving. But, in your written evidence around young entrants, the limitedness of support for young entrants, new entrants as well, as a former young farmer, a member of the young farmers clubs as well—that something that's important to me—what ideas do you have about incentivising, through the sustainable farming scheme, new entrants into the industry?

Okay. In, I think it was 2018, I completed an evaluation for the European Commission of the policies for generational renewal under the common agricultural policy. So, we looked across all the member states at what they were doing to help, to try and encourage both young farmers, so succession and new entrants, into the sector. I think, looking long term, this is a really important part of future planning for sustainable agriculture in Wales, because we don't want farming to be seen as the kind of left-behind sector, do we? We want to be able to project it as something that is going to be challenging but exciting, with real opportunities for the future.

I think that if the Welsh Government could put a bit of attention and effort into ensuring that the new SFS has a focus on support for new entrants, and possibly also for succession, depending on the extent to which that's agreed to be a need, it could help to turn around the way in which the scheme is being perceived at the moment by the farm sector. The objectives in the agriculture Bill are environmental, economic and social, and they need to put their money where their mouths are in respect of the social, it seems to me, in thinking about what this is all about, going forward. It is about a successful, diverse, environmentally sustainable, climate-friendly, amazing kind of agriculture. Wales has wonderful landscapes, you have a lot of potential, and it would be a great thing to focus more attention on young farmers. That's the broader, political pitch.

But the detail: I think it's all about a package. It's about a package that would include advice and support, would include CPD, ongoing training, within the first few years of being part of any kind of initiative for new entrants and young farmers in Wales. It would involve potentially getting a slight uplift on some of the rates of grant or on the amounts per hectare, if you're a young farmer with an approved business plan. And within that process of having an approved business plan, you've got the opportunity to look at diversification, adding value and really tackling some of the climate change and biodiversity agendas in a more creative way. Because it is a generational thing, some of this. You know, when you talk to young farmers, there's a lot that are very keen on regenerative techniques; there's a lot that are very interested in some of the novel stuff that's coming through, as we learn more about the potential for synergies between food production and nature. A lot of the innovators are younger farmers.

I don't know if you've had the opportunity to go to Groundswell, an event that takes place in Hertfordshire—it has been doing for about six or seven years—and it's focused on alternative agricultures, so, regenerative, conservation agriculture. The Nature Friendly Farming Network people are always there, and it's a lot of young people talking about how we can increase the carbon content of our soils by different types of pasture farming; how we can manage agroforestry—you know, all of these things. So, I think there's a real win-win situation here.

And if you look at the sorts of packages that are offered in countries like France or Italy, you might say they're hugely generous and overgenerous, but actually those packages are often on a sliding scale, and the actual money that's offered is almost less important than the support that's offered through the advisory and the continuing professional development process that goes along with it. So, I would say that you could put together a really nice, attractive young farmer package or new entrant package—it should be for both—that could be responsive to the opportunities that there are in Welsh agriculture going forward, and that could also, at the same time, up the ante in respect of what you're delivering on the environment. 

12:55

That's really helpful. And then just going back to your initial point around the broader political ask that you mentioned, I take from that then that it's right that we look at the definition of sustainability not just being sustainability in terms of environmental climate change, but sustainability of the socioeconomic benefits that farming and agriculture bring to Wales in terms of language, culture, and all of that—sustainability as a broader umbrella term, where agriculture has a unique part to play.

Yes. I think they all go together, and what that means, actually, is that you can't ignore one at the expense of the others. Some people use that kind of argument as an excuse for saying, 'Actually, the economy is more important, and we'll forget the environment', but actually the environment is our life support system; we can't afford to ignore it or neglect it. So, it is about all of these things being important. But we know that the Welsh Government has recognised, thank goodness, the link between farming communities and the Welsh language, and the importance of sustaining that going forward. Even if these farms change quite a lot in terms of what they're producing, if you maintain that community coherence and that spirit, that's a really important part of Wales's identity and its potential competitiveness going forward.

Diolch, Gadeirydd. If I could stick with Janet—sorry, James—just thinking about some of the issues that potentially might arise from the intersection of the sustainable farming scheme with other agricultural policies—we've mentioned the nitrate pollution regulations that have gone through—there's definitely a feeling, I think, amongst the farming community that there's so much happening at the same time that it's quite overwhelming. What are the issues, as you see it, with that?

I think the problem with the nitrates regulations approach is it's an approach that was essentially designed forty years ago with the passing of the nitrates directive in European legislation, and it's all based on thresholds and limits, and they're very blunt instruments. What we've seen with the application of those instruments across Europe is that they push people into farming systems, often in a short-term way, that may in the long term not be the right ones for sustainable agriculture and for the environment.

If we take the example of dairy farming, applying nitrogen limits on the farm and a minimum storage period for your manure so that you can keep the closed period over the winter, you might have to invest in a lot of new kit in order to be able to do that, so there's a big capital cost initially. To do that, you have to borrow money from a bank if you don't have a grant, or if you have a grant you probably have to match it with some money from the bank. You're then locked into a repayment system that is based on the system that you then put into place. So, what you find is those dairy farms are then locked into that kind of farming, and then there's a question about whether that sort of very high input, very high output, very high risk model—because slurry is highly toxic if you get spillages from these sorts of systems—is a good model going forward. It's commercially very viable at the moment, it is competitive, it's making money for the farms that are running those systems, but in the long run it does give you the problem of nutrient loading that you have to deal with.

On the nitrate regulations, the objectives are good, but the mechanisms, I think, are old-fashioned, and I think we've got better ways of dealing with these things now. We need to think about how you move towards systems where the risk is lower and the resilience is greater. It might be about not having all your eggs in one basket, not specialising, not being so focused on just one thing. 

It's an area where the Government said one thing and has done another. The agriculture Bill has a holistic approach to dealing with farming, and yet the way in which the nitrates regulations work has gone on, essentially in a silo, alongside the work on the SFS, doesn’t seem to me to have been a sensible way to work. They would have done a lot better to think about the holistic issue, which is what are we doing about nutrient loading getting too high in Welsh agriculture, and how can we help farms to think about systems that move away from that kind of model but will still make money. It's a more challenging, perhaps, thing to deal with, but I think if you just roll out those old nitrate regulations, you will end up pushing those farmers that are already not environmentally sustainable into even more environmentally unsustainable kinds of models. And then you still don't deal with the fact that there are other parts of Wales where there's still a capacity to take nutrients.

Sometimes, you could even get perverse outcomes. We were talking yesterday about the risk if you were on a farm producing more slurry than you can spread. What will you try and do? You'll try and give it to somebody else who's got land they can spread it on. But then you might be putting it onto land that can't really—. If you go further up the hill, the risks get greater, and farmers up the hill will be looking for ways to make money, because they're BPS is going down in real terms, and they're needing to think about income. So, all of this, I just worry that it's piecemeal and it could end up with a lot of perverse outcomes. I think they need to sit down with people around the table, with people from the sector, and think about how do we solve this problem, let's look at the nutrient budget for the whole of Wales, where have we got overloading, where have we got capacity to absorb more, what are the most important ways to try and make those connections, how can we reduce the level of risk.

13:00

That would be an example where Government policy is disjointed, essentially, isn't it, where they're not working in tandem. You were talking about some of those potential other mechanisms. What would be those other mechanisms in terms of the nitrate regulations?

I think offering opportunities for people to shift their systems a little bit. If they're in systems at the moment that are very high risk and high nutrient load, it might be by encouraging other sorts of added value enterprise, where that's possible. It might be by a local co-ordination of dealing with manure. If you've got a lot of nutrient, there are various things you can do with it. You can try to find ways of more safely getting it into the land. For example, if you were using reed beds or wetland areas, they have an absorptive capacity for nutrient that others wouldn't have. You have the potential to put nutrients into energy generation, in various forms. But you have to do that in a balanced way, and you have to have the other stock to manage the manure, because you can't just do anaerobic digestion with manure on its own. You need other things, like more woody materials, to complement it. So, in some places, you can reduce nutrient loading by building an alternative energy generating process. In northern Italy, human sewage is being turned into bagged fertiliser, which is being sold elsewhere in Italy. That's an example of an extreme nutrient load being dealt with in a way that is, potentially, attractive through the marketplace. It needs strategic planning, it needs a bit of investment, and it needs thinking about different solutions for different areas where the challenges are different. 

Would Professor Dwyer like to say anything about the scheme in the context of existing and future international trade deals and WTO rules?

I commend the Welsh Government for being brave enough to say that we must move away from an income forgone approach to determining payment rates. The English decided to stick with it, and it's giving us real problems in respect of devising a future scheme to replace the old CAP support. Income forgone is a deal that was brokered back in the general agreement on tariffs and trade back in the early 1990s in terms of wanting to ensure that countries weren't overcompensating farmers in ways which gave them a competitive advantage in international trade. Wales is a small country, and we have moved from an era in which a single global international trade agreement was the order of the day. We're now in a situation where bilateral agreements are more common.

In thinking about how Wales plays its image in the international trade arena, you need to think about what are its key products for export, who are the main competitors, and how do you deal with discussions about freer and fairer trade with those parties. We're probably talking Australia and New Zealand for sheep meat, and also dairy, and we're talking Ireland for dairy, which are the two areas where Wales is producing more than it's consuming in large part, and will be trading in export markets, although for dairy, obviously, a lot of Welsh milk goes to England, so it's still within the same country.

I think New Zealand, Australia, and, to an extent, Ireland, have questions that can be raised about the environmental sustainability of their farming practices, and there are also, we know, issues with regard to animal welfare. I think the Wales scheme, as it's proposed, is fully decoupled, and, therefore, should be green box. Therefore, I don't think that the issue of the income forgone approach to payments should be a sensitive one for Wales. I think you're squeaky clean, and you have potential for a better environmental and animal welfare record than your trading competitors. 

13:05

Thank you. I'm afraid our session has come to an end. Thank you both for being with us today. A copy of today's transcript will be sent to you in due course. Please let us know if there are any issues with that. Thank you for being with us. Obviously, your evidence will be very useful to us in scrutinising the sustainable farming scheme going forward. Thank you very much. We will now take a break for lunch. 

Gohiriwyd y cyfarfod rhwng 13:06 a 13:38.

The meeting adjourned between 13:06 and 13:38.

13:35
6. Ymchwiliad: Yr Economi Werdd - Darparwyr Sgiliau
6. Inquiry: Green Economy - Skills Providers

Croeso nôl i gyfarfod o Bwyllgor yr Economi, Masnach a Materion Gwledig. Fe symudwn ni ymlaen nawr i eitem 6 ar ein hagenda, ac rŷn ni nawr yn dychwelyd at glywed tystiolaeth ar gyfer ein hymchwiliad i'r economi werdd. Yn ein pedwerydd sesiwn banel heddiw, rŷn ni'n siarad â darparwyr sgiliau. Gaf i felly groesawu'r tystion i'r sesiwn yma? Cyn ein bod ni'n symud yn syth i gwestiynau, gaf i ofyn iddyn nhw i gyflwyno eu hunain i'r record? Efallai gallaf i ddechrau gyda Jemma Parsons.

Welcome back to this meeting of the Economy, Trade and Rural Affairs Committee. We will move on now to item 6 on our agenda, and we are now returning to evidence regarding our inquiry into the green economy. We have our fourth panel session today, talking to skills providers. So, I'd like to welcome the witnesses to this session. Before we move to questions, could I ask them to introduce themselves for the record? Perhaps I could start with Jemma Parsons.

Good afternoon. Jemma Parsons, head of the green skills academy at Coleg Sir Gâr.

Matt Rees. Vice-principal for work-based learning and commercial activity at Bridgend College.

I'm James Powell. Marketing and communications director at Educ8 training group.

Thank you very much indeed for those introductions. Perhaps I can just kick off this session with a few questions. How would you define green skills and jobs, and is that term being used interchangeably with net-zero skills? And to what extent would it be beneficial for the Welsh Government to provide a definition of green skills? Who would like to start on that? Yes, James, by all means, yes.

I'm happy to start. Yes, in my understanding of net zero and defining net zero and green skills, I think they are used interchangeably. I think 'green' has almost morphed into a key attribute of net zero, so I think a clearer definition, perhaps, across Wales, across the UK and wider, globally, would be beneficial.

13:40

Yes, I think I agree. I think if we could get to a point where at least there was some sort of general consensus, so that, if I'm honest, we could then move past it and then start implementing a strategy to put in place to tackle some of the barriers in place. But I feel we tend to spend a lot of time talking about what it could mean, where it could mean lots of different things. I think, for me, net zero, if you look at it differently, feels far more immediate, whereas greener skills feels like more of a longer term strategy. 

Yes, I agree. I see green skills, the term 'green skills', as being the wider sustainability, the knowledge about sustainability across all aspects of the economy, whereas the net-zero skills are more related to targeted skills around carbon reduction.

Okay. Now, the Welsh Government has recently consulted on a range of issues relevant to net-zero sector skills, which will be used to develop sector skills road maps. What would you like to see included in those road maps, and in what level of detail? And who do you think should be responsible for the oversight and delivery of those road maps? Matt.

Jemma and I were just talking about this, and I think there needs to be a clear definition of what the destination is before we can talk about road maps. I think, at the moment, we're all trying to achieve lots of different things, which isn't helpful. I think that, in order to achieve a level of consistency and so that we can work together as a sector to achieve these fundamental goals, we need to first decide where the end destination is, and I think there's a lack of clarity around that. 

I agree with that. I'd like to see a road map specifically have a very occupation-based approach, where we're looking at the different industries, the end goal, the result that we're trying to achieve, and agree on that as a starting point, and a route to competence to getting there from different levels. So, whether it's completely reskilling someone or upskilling someone, different entry points and potentially end points in that map.

I do agree. The only thing to add is that the stakeholders are involved in that process and the development of those road maps and the execution. I'm thinking about working with partners within regional skills partnerships, the Federation of Small Businesses and the Confederation of British Industry and those sorts of bodies as well, and incorporating them in that plan. 

Timescales, also. We've currently gone through a period where we have given information about what courses we're running in colleges around the green skills. I think it was October time that we gave that information. In such a fast-paced environment, that information probably has already changed. So, I think that when we are producing a road map, we have to look at how it is regularly updated and how quickly we're able to actually disseminate that information. 

And I suppose, just to add a final point there, recently I was involved in a delegation that went out to Germany, where they're having similar conversations, and I think the successes come when it's backed by Government and led by Government, because people seem to take that far more seriously. So, the worry would be if there is a party put together with various stakeholders, that if it hasn't got Welsh Government backing or is at least led by Welsh Government, how seriously that would be taken would be questionable, I would think. 

Thank you, Chair, and good afternoon to our panel. If I could ask Educ8 first of all, your written evidence says that, and I quote, 

'we do not know the skills and competencies that will be required for the green economy which presents a challenge'.

Could you elaborate on what challenges you feel this presents and what you think can be done, by whom, and by when, to address them? And are there specific challenges in terms of actually anticipating that future demand?

Yes, of course. I think the point we were making is that technology obviously changes very rapidly. Things like automation, artificial intelligence present huge opportunities, but also a degree of uncertainty in terms of the skills that would potentially be needed for our future workforces. I think particularly within the green economy, it's a very dynamic space, it's very innovative and it's heavily influenced by new technology and innovation. So, I think, taking that on board, it's almost the knowledge of what those skills will look like. Also, it is quite a new industry, relative to some more established industries and sectors, so I guess there's a lack of data and evidence, potentially, as to what those changes might look like in future and what the skills that will be required in the future will look like. So, I think aligning skills development policies to broader environmental and sustainability and economic policies makes good sense.

13:45

Thank you. And my second question is a broader question to all of the panellists. We've heard that there is a mismatch between the skills courses being provided by the education system and the green skills that businesses need. And, in fact, this is something that's been raised with me several times by my local further education college, Coleg y Cymoedd, and I know it's something that they're really keen to address. So, I'd like to ask: to what extent would you agree with this view and what you feel could be better done to join up educational institutions and industry? 

Yes, I do agree with some of that; I wouldn't agree with all of it. I think we offer a broad range of courses that address a broad range of needs. I think at the heart of the question is: are we keeping up with industry? I think that's questionable, and I think that a lot of the issues and challenges we face there are to do with how quickly we can get qualifications validated.

There are recent examples now where we start talking about a course and designing a course and then that will take up to three years to start first delivery. Well, if that's a course that is two-years long, we've then started talking about a course and then, five years later, we're delivering learners out into the world, into the workplace. So, that qualification is technically five years out of date from original inception. So, I think there is work to be done there. I think we need to become far more responsive and look at the bureaucracy around validation, and work with awarding bodies far closer for them to understand the needs of local industry, so that we can streamline those processes and make them far more efficient.

Yes, I completely agree with both speakers so far, but I'd also like to add that I'm not sure that there's necessarily a huge gap between what we offer and what industry needs. There are obviously areas for development, but I see in my local area that it's more a matter of communication. I often get put in touch with an employer through our regional skills partnership. The RSP are doing the work with the employer, we have provided those qualifications, there's now funding available through things like personal learning accounts, but those employers somehow don't yet know that we're able to offer them. So, I think that there is a breakdown in communication somewhere, where we're not able to speak to employers at a regular enough level. Employers are not necessarily engaging with us. We have some employers who—I think you'd probably agree, Matt—we have very, very close relationships with, and others with whom we don't necessarily. So, I think it's a link between the two and sharing that information and using that information properly.

Yes, I'd agree with both comments really. I think certainly the, sometimes, rigidity and the time taken to create a new framework and getting that validated, if we could shorten that, that would be hugely beneficial. And I know we're going to come on to this later on, but also things like modular training and having more bite-sized training that can be accessed by employers more quickly, rather than a more formal apprenticeship qualification, are valuable as well. It's that balance.

Diolch, Cadeirydd. Good afternoon, panel. Representing a constituency in rural west Wales, we see the change in demographics with young people leaving and the older generation there. And in terms of green skills and the opportunities around, for example, the Celtic sea, floating offshore wind, renewables around that, are these skills, these jobs, these potential employment opportunities, attractive enough to keep young people in the areas that they've been born and bred in—born and raised in, rather? And do they know these options are available to them? Is that communication going to them from the college sector, the FE sector, into schools and saying, 'Look, you can achieve this by staying locally, through your FE college'? Matt, I'll start with you.

I think we're in a really tricky situation, because we're trying to communicate green skills, green jobs. Young people don't understand what that means. So, I think anything to do with change, people get anxious, people get nervous, and I feel, especially within our college, within Bridgend, within the engineering sector, for example, they know Tata Steel is a big employer. I know they’ve got their struggles at the moment, but Tata Steel is a big employer. They know that, they understand how they can apply their skills from what they learn in the engineering classroom to what’s going in Tata. We have these conversations about, ‘Yes, okay, but what if there’s a different sector you could go into, for example, offshore wind?’ That makes them nervous, because they can’t see it, it’s not tangible: will it be there in five, 10, 15 years’ time? So, there are question marks around that. And I don’t know how helpful it is sometimes to try to differentiate between them, so we start to have conversations like: ‘These are new jobs where you can still use the same skills, but they’re applied in a different way.’ As soon we put that label of 'green jobs, green skills', they get nervous and so do employers. So, yes, although we want to push that agenda, I think, how we communicate it, we’ve got to be very careful around that.

13:50

I think it’s probably sporadic, what we’re speaking about in schools, what we’re speaking about in primary and secondary schools. There are areas that I think it’s been done widely. Engineering is one of them, and construction, but, the wider offering, I’m not convinced that we are having the most meaningful conversations and offering those opportunities and showing there are opportunities that, as we say, might not even be there yet. We don’t know necessarily exactly what they’ll be, but, as an industry, I think I’m not sure that we are inspiring our young people at a very young age.

It’s interesting, because, Matt, your point there about putting the ‘green’ tag on it sometimes leads to a bit of uncertainty—all the data shows that the younger generation are more in tune with climate change and all the potential issues around that than ever before, so it’s interesting that you make that distinction there. James, any thoughts on that?

Yes, I’d say exactly as you just said: my perception would be that young people care for the planet, they care for future generations. This would offer them long-term career pathways and opportunities, given the scale of the problem, so I would hope that it would be something that would be attractive to them, but, equally, I do understand the point around communication and perhaps when you tag something as ‘green’ there’s a degree of uncertainty as to what that looks like. So, I echo the points I’ve already made.

I think the other thing as well is going back to education within schools being very focused on qualification outcomes rather than more vocational work and opportunities, and I think there’s probably a piece of work to be done there in terms of career advice and clarity, giving a more holistic and comprehensive overview of the options that are available to young learners and young people when they’re in school, rather than them potentially going down the path of higher education or university, which might not be perfectly suited to them.

Okay, thank you. So, on the point then of that terminology around green jobs or green economy, green opportunities, has anybody got another potential descriptive word to call it? I know, Matt, you said about 'new' jobs. Is there something else that can be used to describe it that doesn’t bring in that element of trepidation, of potentially not seeing something tangible, but understanding that, actually, an investment in a skill set as a welder or a fabricator or another role like that actually does futureproof your jobs in a transitioning economy here, especially around south Wales? Does anybody have any thoughts?

Does it have to be labelled—particularly to the younger generation? We don’t necessarily label other industries to them. We talk to them about the opportunities. I’m not sure that we necessarily need to label it for them at a young age.

Yes, I’d agree with Jemma there. I think, for example, going back to Tata, we’re heavily involved in Tata, and, with the investment in the electric arc furnace there, there’ll be a different type of skill set needed there. That doesn’t necessarily mean that we have to change the electrical qualifications we're delivering and the mechanical qualifications we’re delivering; it’s just how they are able to apply their skills to that sector. They are green jobs. Do we need to differentiate?

Okay, that’s interesting. Thank you for that. And then we’ve heard the importance of teachers having a good understanding of these potential future opportunities, especially in terms of careers, but I was just wondering how important you think it is that skills development is also focused on pre-16 education. I know, Jemma, you mentioned that sort of link there. At what age should we be starting to either educate or incentivise young people into the opportunities that are there? And also I know, James, you mentioned the careers element of that. I don’t know who wants to jump in first. Matt.

13:55

I think from the word 'go'; I think it's very important. I've got two young girls myself—I've got a nine-year-old and a four-year-old—and I think the primary sector does it extremely well, how they've started to embed it there and they talk about it on a daily basis. It's more challenging as they progress through the education system, specifically at a comprehensive school level, because of certain exam structures there and certain pressures there. I think they find it very challenging, and then, when they reach us within the FE sector, sometimes—not all the time—we've got to almost start that conversation again. But I'd say there are large pockets where it's done extremely well, and I think it's extremely important. I think, whoever you speak to, at whatever level of the education system, they'd all say similar things, I would imagine.

Okay, just on that point, then, what's delivering that good practice? Is it good teachers who are aware of what's happening or aware of the opportunities, a curriculum that's delivering for them, or is it—we've seen examples of this in Pembrokeshire—where specific industry bodies have come in and physically put a presence in schools by delivering resources and things like that? What leads to the good practice, and how can we increase the uniformity of it?

I'd love to give you a golden answer. I think it's a bit of everything, and that's not a flaky answer. Yes, of course, when you've got extremely good teachers in the classroom communicating and showing passion, that's going to come across in a certain way. But we see in the FE sector, when we work very closely with employers and they're hearing that at first hand—. We all know what it's like, if you work with a learner for one, two years, they tend to then sometimes roll their eyes. But then, if you get an industry specialist in or an employer, they then seem to sometimes sit on the edge of the seat, and think, 'Wow, I'm really going to believe this then,' although the message is quite the same, if I'm honest. So, I think an approach that involves all of those is far more productive than one approach.

I entirely agree with Matt. It is a mix of all those things. You get pockets, don't you, of individuals who may be teaching who've got a specific interest and a passion, and it will be those that will push forward. But, the co-investment from industry, I think that's imperative to making it work at all the education levels.

Just to add to that, we've started to see greater engagement from employers now, because they understand they have to get there at the beginning of a learner journey so that they can understand what skills needs can be mapped across to their business. But they want to be involved, and they want to mould that learner to what they need within their business.

All I'd add is I've got two teenage boys, one is going through GCSEs at the moment, which is a somewhat stressful situation. But, ultimately, that sort of career advice, whether it comes from teachers or whether it's industry led, coming to schools, I think having that drip-fed, as was referred to earlier on, and it not just being a one-time thing, but actually something that is woven into their entire school experience, would be helpful.

Hello, I'm sorry I was a little bit late. I had to go and do something else. It isn't just the next generation that we've got to upskill, it's the existing workforce, because everything is changing so quickly as a result of the climate emergency and everything that goes with that. We can't possibly take advantage of all the things that could suddenly become a game-changer for the wealth circulating in Wales unless we take everybody with us. So, what are the challenges for both responding immediately to helping employers identify the right skills, but also, when there's fallout from things like the closure of the Tata blast furnaces, how do we ensure that we retain these skills for the next part of the journey to the greener economy?

I think what we're seeing is, within the Tata situation, early intervention is key. That's happened so quickly. But I think what we've proved is that we can mobilise and we can offer solutions. The solutions are there. We are almost too reactive as a sector. We've proven to be very agile. We've proven that we can respond when needed. One of the greatest challenges is, with this ever-changing, fast moving, these different sectors changing overnight, as you're alluding to, who's training the trainers? We've got to deliver these new skills to this new generation and to the current workforce, but how are we upskilling those who need to upskill? And that's a real challenge for us, and, if I'm honest, at the moment, we try to juggle things, we release members of staff to go on different courses, but then we've got to backfill those members of staff, and it is a cost for us as organisations. So, I think that needs to be addressed. If we want to really invest in future generations and the current workforce, how are we investing in our current deliverers, our current trainers, who have, sometimes, been within FE institutions for 15 to 20 years? They haven't been in the workplace, so how do we invest in them and give them the opportunity to go back into the workplace and excuse them from their teaching duties to go out there and experience that and have those rich experiences so they can pass them on to future learners? So, it's a bit of both. I think the want is there; I think the commitment from us is there, definitely, but it is challenging.

14:00

So, how closely do you work with industry? Because there are several sector-leading green energy companies in Cardiff that I happen to know about, because I represent a Cardiff constituency. They obviously make it their business to know the latest innovation that they want to stay ahead of, otherwise the competitors will get the job. How much can you rely on them, with secondments or shadowing people, to absorb the information that they're grasping anyway?

I think industry have been excellent. I think they'll open their doors. I meet with industry on a daily basis, multiple times, and they're more than happy because it's a benefit to them. That isn't the issue for us, getting placements. It's when we release that member of staff. Who is sitting in their seat? Who is then delivering to those students that they're leaving behind? So, we're constantly trying to juggle that.

And I suppose, just one last point, I think industry are very good at being current, and, obviously, they know exactly what they need now, but there's a lack of understanding that we can't just start delivering that course tomorrow; we've got to develop a course and then have it validated and authenticated.

I think that links nicely with the concept of having a road map and that we're able to strategically plan ahead and being able, with industry, to look at that road map, to look at those roles, the ones that we know are definitely going to be there, and potentially routes to ones that we don't necessarily have detail on the end result for at the moment. But, if we had time and obviously the funding, the guaranteed funding—which isn't necessarily year on year but is longer guaranteed so that we can plan—it can be a more strategically planned thing. So, where we are looking at releasing staff to work with industry, we've got that opportunity to do it, rather than reacting very quickly, which, when you're running an FE college, isn't an easy thing to do.

Okay. So, I have two things that I'm not clear about. One is: how do we interface with the young person's guarantee? Because so many people don't seem to know about this who are young people—or their parents. Why are we not ensuring that every young person is engaging with this if they're not in work or training already? And the other is degree apprenticeships: what role do they have in giving people that higher status, that this is somebody who really, really does know about a particular aspect of new technologies? I don't know if—. I'm afraid I can't read the—

Sorry. I was just going to echo the previous points, actually, in terms of Educ8. Sorry, just to interject; it's difficult when I'm online, sometimes. But, certainly, if there is that longer term commitment to apprenticeship funding programmes, that would certainly enable us to invest in infrastructure and develop the skills of our own staff in order to deploy some of these new frameworks. So, I just want to kind of call that out, initially.

Thank you. Is there anything you wanted to say on these other two aspects, as you're—?

In terms of YPG, certainly at the moment, outside of the green economy, it's certainly an area of focus for us. For understandable reasons, it's a priority for Welsh Government. So, focusing on those sectors that traditionally and historically have encouraged, or an entry point for younger learners, is something we're obviously—. It's a key focus for us—previously, but also this coming contract year, as well.

So, how do you work with secondary schools and colleges to ensure that people aren't becoming NEET, and they are going into the training, based on a suite of options, depending on what their interests are?

14:05

I think, from an engagement and a marketing perspective, it's about engaging with those schools and having presence there at various talks, events and fairs that they would be running, and engaging with them to call out the value of apprenticeships and promoting the various options that are available. So, I think that school engagement from a company perspective is key, but then also, through things like social media, using the right channels that those audiences would typically engage with—things like Instagram is a good example—is something that we do on a daily basis.

I think that has to be a multi-agency approach, doesn't it, with Careers Wales, et cetera, working with the schools? And I think it was alluded to in one of the documents, maybe in the questions, that there is an incentive for schools to keep learners there, to continue with A-levels in a school setting. I think that has to be looked at as much wider thing, how we—

Absolutely. But how we have those conversations, I don't think that colleges alone should have those; it has to be a much wider approach on that.

Okay. I was going to say something else there—it'll come back to me in a moment.

Just to pick up on the point about how we engage with schools, obviously, we run junior apprenticeship programmes. I think we've got about 100 learners with us now. It's quite a large programme, in lots of different sectors, but also, like James was saying, on a weekly basis, we run different events and different programmes, where we go into schools, but also, as well, fund schools to come onto our campuses, and not just years 10 and 11. We're not just, again, trying to recruit learners; we think it's our responsibility to engage with our local community from primary school all the way up. And I'm sure we could all give numerous examples of times where we consistently engage with schools from a primary level all the way through to comprehensive.

Okay. How does this link in with giving technical skills the parity that academic skills have? What role do degree apprenticeships have, given that they are actually very limited—the ones that are actually funded by the Welsh Government?

I think we're on the beginning of a journey there. I think it's a very good move. I think, when we say 'apprenticeships', I think there's still that struggle of, 'They're just for 16, 17-year-olds', whereas we've got 1,000 apprentices with us in Bridgend and predominantly they are 16 to 24-year-olds, but we have hundreds of learners who are 30, 35-year-olds, and starting of their journey and choosing a different career pathway. I think this will help us communicate to the masses and say, 'These are not just qualifications for 16-year-olds; they are qualifications for wherever you are within your career or your educational journey.' It's an opportunity to start again and choose a different career pathway, or to upskill, and I think this a real opportunity for colleges specifically to show, actually, from a vocational point of view, we can work with people at a very, very high level, and we've got the facilities to do that as well. I think it's a really exciting move.

I'd agree with you that I don't think the portfolio is large enough yet, but I think it's—

They're all male-dominated areas of development as well. Where's the degree apprenticeship in the caring industry, which is a huge concern and responsibility we have?

But I think, as a challenge back to that, within the care industry, whether they would say to us, 'Why would I spend another three years getting a degree where the wages are so low?' So, there's a conflict of interest there. 'Why would I spend time away from my children, upskilling, financially making a commitment there, when, at the end of it, potentially I'm not going to see the benefits of that?' I totally agree with what you're saying, but we've got to look longer term. If they do get highly skilled and highly qualified in that area, there are only a small number of jobs that are actually going to benefit them there.

Okay. Obviously, we need to move on. I'm conscious of time, so I'll now bring in Hefin David. Hefin.

I just want to challenge something Jenny Rathbone just said, which I don't agree with, which is that degree apprenticeships are in male-dominated areas. I think the challenge is to get women to be taking up some of the opportunities that are currently in rail degree apprenticeships—in degree apprenticeships. Sorry, I just mentioned rail degree apprenticeships. There's a rail engineering degree apprenticeship. I've seen that there are women interested in engaging with this. It's really important that women do and that we say that it's not just men who should be engineers on the new metro service. We need to see the opportunities for women getting onto those qualifications. 

I’ve written a report called 'Transitions to Employment', which has explored this in quite a lot of detail and, in fact, my recommendations 1 to 3 cover exactly what was just said: getting colleges and schools and universities to work collectively. Now, there’s an opportunity, I’d say to the panel, here on the issue of parity of esteem, particularly with regard to green skills. Colleges and providers have a source of access to employers and resources that schools just don’t have, and the offer isn’t being made to schools to link up with those employers to give school students the experience of the world of work. And it’s not just the colleges' fault—I think the schools are then gatekeeping and preventing colleges from engaging. I’ve seen fantastic examples—I mention them in my report—across Wales, where the barriers have been broken down. So, what I’m really asking is how can you see a way to build on that to engage with people—girls and boys—getting them engaged with the kind of programme that they need to be engaging with. Is that quid pro quo with schools and colleges an effective way forward?

14:10

I was going to say, yes, that that engagement between employers and schools would be really valuable in terms of if we're looking at young people, absolutely. I think we engage with schools, as I said, but if we can get employers to link up and have a strong presence, a strong community presence, with the schools in their area it would be really beneficial. 

I was going to just add to a previous comment about all-age apprenticeships. I think, certainly, there's more work to be done there, and trying to bust those myths that apprenticeships are for 16 to 24-year-olds, and there are lots of opportunities to do that. We do do that, but it's trying to get that message to resonate across a wider age group.

One of the other things, before we come to the other panellists, and I'd be interested to hear ColegauCymru's view, but for the other panellists, I've talked about the vertical integration between lower level apprenticeships and higher level apprenticeships, and we aren't there, so it's also about what can be provided. I suppose the question for the other panellists, just to give you a chance to respond to that and the other question I've raised, is how you achieve that degree of vertical integration, which would obviously be taking account of green skills and the greener economy approach that we're talking about today.

Just to go back a little step to integration and collaboration with schools, I think we're in a really difficult position, where schools are struggling to keep their sixth forms going, and that's really difficult for us, then, to engage. But we fully understand that some learners should stay in school, quite rightly so, and if they want to study A-levels, of course, they should be given the opportunity to do that. Our challenge back is: how good is it, sometimes, for the learner within classes of two people? What's that experience like for that young person, where they could potentially either go to maybe a neighbouring school or a sixth-form college or an FE college down the road and get a different experience with, potentially, sometimes better facilities, and in a class with more learners there, to have that different experience? We do find it very hard to get in the door, because I understand schools are protective because they want to protect their staff, and they want to protect their offer. Of course, I understand that, but we're moving into a transition where the Welsh Government, I don't believe, have the funds to heavily invest within schools. We've got neighbouring schools in our area who are going to start offering vocational construction courses. We've got a multimillion-pound construction academy. We've also got the contract up the road with Persimmon. We've had hundreds of apprentices over the years and we've got a training academy on the Persimmon site. They can't compete with us, and that's okay, but we want to encourage collaboration there.

And the two issues I've said is that the Welsh Government need to ensure that young people are provided with full clarity on what options are going to be available to them in post-compulsory education at an early stage. In order to do that, you've got to get the sector having links with those young people in the way you've described. It would be unfortunate if schools started branching out into vocational qualifications that are already being provided. That should be looked at by the Commission for Tertiary Education and Research, and I've said CTER could work with academic and vocational providers to reduce the fragmentation of the sector and provide mutual benefits to learners and schools and education. And you can underpin that through a co-ordinated approach, which is happening in pockets elsewhere. But, to do that, you've also got to have these flexible skills you've talked about. I think it was James mentioned the short, flexible courses that can be provided, flexing the way the system is done. Is there anything else you'd add about that, too?

14:15

I'd agree with James. I think so—a different approach. I think we have to, not just from an industry point of view, where they can't afford to release individuals for a day a week, for example, because it might not suit their business models—sometimes it's far easier for them to release somebody fortnightly, just for a fortnight block, and then get those skills and then check back in in a number of months—I think we've got to address our delivery model as well, and that's not just for professionals within the workplace, but that's just, again, how learners like to learn, sometimes, in an intensive way, and then go out and try it for themselves and allow themselves to fail.

It also potentially fits better with their working environment if they're able to dip into a module and complete that at a time where you're perhaps a little bit less busy, or a project's finished, for example. That would be really beneficial. I know Educ8's developed its own modular CPD programme for its own staff, so we can dip into that, around digital skills, as and when needed, rather than signing up, necessarily, to a 12, 15, 24-month full apprenticeship.

Yes. And that's exactly how it could happen with things like—. I always take the example of Transport for Wales, because they're in the public sector and can be instructed to do this, unlike, perhaps, companies in the private sector. And you would want, perhaps, a rail engineer to have the opportunity to dip in and out as their knowledge needs to be updated. We've got a real potential in Wales to grow that sector really well. So, can I ask Jemma if she wants to come in on anything I've said and reflect on any of that?

Nothing specific on that, really. I agree with everything that's been said so far. Yes, nothing specific to add to that, sorry.

Can I just add, just as a last thing, to what Jemma said earlier on, about the longer term funding aspirations that can allow us to be strategic, because we can say we'd like to deliver things modular next year and the year after, but then, because of funding challenges, that will change. So, it's very hard for us then to stick there and offer something consistent when we don't know where those potential funding streams are going to come from in the next number of years.

And I think there may be reticence from employers to release staff if they don't have that guarantee, perhaps, that that will continue—so, if it was modular, that we do have a plan for a number of years to deliver those modules, to achieve an end result, and, again, coming back to Matt's point earlier, that we are very, very clear on what end goals we're trying to achieve, and that they're set out strategically and that everyone agrees to them.

The last thing, Chair, just on funding, seeing as we're talking about that, is my concern is that the Welsh Government is funding a limited array of degree apprenticeships. That money cannot come from apprenticeships below degree level. I think there needs to be a conversation about degree apprenticeships and the value they have, and how employers, students and the wider business sector are willing to fund them. There is an issue with the apprenticeship levy, which is a mess and doesn't return money to Wales; it takes money out of Wales. But there needs to be a discussion about the funding of those, and I think, therefore, the funding that comes from Government needs to be pre-age 18, so that the higher level apprenticeships become self-sustaining. If there's demand, then employers will be willing to pay those fees. I just wonder if there's a reflection from ColegauCymru on that. I'd imagine they would support that.

Yes, definitely—anything that's sustainable we're in favour of. But I think what's important there is, to pick up on the point, that employers are willing to engage. If they're seeing the longer term benefits, I think they are willing to contribute. The question is: are we asking them to do that? But I think, longer term, like I said, if they can see the benefits, why wouldn't they then invest? I sit on a number of different boards with larger employers, and they have all said that they are willing to invest. The money isn't the problem; it's the delivery model that is the problem for them.

Yes. And we've had a letter—sorry, Chair—today from the new economy Minister, who's made it clear that the problem with developing new green skills, new green courses, is that the apprenticeship levy takes money out of Wales; there's a net loss to Wales as a result of the apprenticeship levy. I don't think that's fully understood, and it's well worth exploring that in future sessions, Chair.

14:20

Yes, absolutely, and we can certainly do that. Thank you, Hefin. I'll now bring in Luke Fletcher.

Diolch, Cadeirydd. It's been a really interesting session. I think you were right, Jemma, when you pointed at communication being an issue with a lot of these things. There's stuff on offer that employers don't necessarily know about. I'll come back to some of the stuff that was discussed when Jenny was asking her questions around the proactive and reactive elements of FE colleges. Proactively, I know, for example, that Bridgend College does a lot of good work, like the training centre with Persimmon. Actually, it turns out that my old man was the one who painted the inside of it. I don't know if I've got to declare that, Chair. [Laughter.] But there's some really good work being done there by Rob and others.

One thing I will have to declare an interest on, in a way, is being a member of the Tata Steel Port Talbot transition board, because I think here now is actually the reality of the situation that we're going to find ourselves in increasingly over the next couple of years. I'd be really interested to understand from you what the experience has been. What are the things that we could learn from so far in dealing with Tata, and perhaps organisations of a similar size? We've talked a lot, I think, over the last couple of months now about the need to map out what skills are needed, what's on offer at the moment, where do we see those gaps, so that when situations like Tata arise, we have a go-to strategy in place where we can plug the gaps immediately then and support anyone who might potentially be losing their job. So, it would be interesting to hear some reflections on how that relationship has panned out with Tata. 

I think, for larger organisations, there has to be a recognition that, if you've got individuals who have been there for 25, 30 years and they may become vulnerable because of the business needs, these individuals might be leaving with no qualifications whatsoever. And that's the position we find ourselves in now. We've got up to 700 individuals who we are working with who have no qualifications at all. They've been in a large organisation for up to 30 years, some of them, where they've been operating plant machinery, operating fork trucks. They've got licences to drive them onsite, but they're not recognised in the wider world. So, we'll work with them extremely quickly now, because they have got the skills, they've got the competencies to do it—

Exactly, yes. So, we've got to map those across now to get them the relevant qualifications so that they can move on. I think that that's one learning point that we have to recognise: that with individuals who are within an organisation for so long, if something was to change there, would those qualifications—or lack of qualifications—be fit for purpose for them to go on. So, where's the accountability there for those organisations to be looking after those individuals to ensure career progression. 

And also, I suppose, going back to what Jemma said earlier on about us being so reactive, there are great funding streams available to us—the personal learning account is a fantastic initiative—but communication is not great. We can't do it by ourselves. And that's not pointing the finger at the FE sector or the Welsh Government; it's got to be a collective thing. I spoke to over 100 Tata employees last week, when we held the first career event with a number of training providers there. I'd say that nearly all of them didn't even have a clue what the PLA was, and they were all coming in saying, 'Are we eligible for any help?' There's so much help available, but they don't know that.

Is that a failure on our part? Is that a failure on Tata's part? We're all to blame, because we're the ones delivering the training, but sometimes we can't get past those gates, we can't get there. We need to work far more collaboratively together. People need to stop being so protective, I think, and just allow people in to communicate what is available to people, because people aren't aware. And that goes down to what the other Member was saying about what's available from an educational point of view as well. The offer is vast, but we need to work on the communication to let people know it is there.

The accreditation issue has cropped up quite a few times now in terms of some licences being valid only on Tata property, so it's good to hear that something is being done on that. I suppose the communication element is the key part, but ColegauCymru have talked about the need for an actual workforce strategy to be put in place. You can partner that up with an industrial strategy. That's what's needed here, in essence, isn't it, because communication is key, yes, but if you don't know what you're communicating—. 

14:25

Some funding has been made available through the PLA fund now to support individuals who are at risk in Tata, but we're behind the curve on the information that we've got to give them about these potential green jobs that they could transition into. We are using that funding in an exceptionally reactive way within this academic year to upskill them, to give them some of those accreditations that we want, but are we hitting those targets? Are we looking at, actually, what we want to potentially upskill or reskill them in, or is it just taking perhaps what was a default to them, maybe a HGV licence, which they know is quickly available to them? There isn't really that strategic approach to how we're using that funding. We're using it, certainly, to help them and to give them that accreditation, but without that real strategic approach with other employers involved.

Thank you very much, Luke. Yes, I'm afraid time has beaten us, so our session has come to an end. Thank you for being with us this afternoon. A copy of today's transcript will be sent to you in due course, so if there are any issues with that, then please let us know, but, once again, thank you for being with us. Your evidence will be very useful to us in our inquiry.

7. Cynnig o dan Reol Sefydlog Rhif 17.42(ix) i benderfynu gwahardd y cyhoedd o weddill y cyfarfod
7. Motion under Standing Order 17.42(ix) to resolve to exclude the public from 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 ymlaen nawr i eitem 7, a dwi'n cynnig o dan Reol Sefydlog 17.42 bod y pwyllgor yn penderfynu gwahardd y cyhoedd o weddill y cyfarfod. A yw'r Aelodau i gyd yn fodlon? Ydyn, dwi'n gweld bod yr Aelodau i gyd yn fodlon, felly mae'r cynnig wedi ei dderbyn ac fe symudwn ni i'n sesiwn preifat ni.

We'll move on now to item 7, and I propose in accordance with Standing Order 17.42 that the committee resolves to exclude the public from the remainder of the meeting. Are all Members content? I see that Members are, indeed, content, so the motion is agreed and we'll move into private session.

Derbyniwyd y cynnig.

Daeth rhan gyhoeddus y cyfarfod i ben am 14:26.

Motion agreed.

The public part of the meeting ended at 14:26.