12 November 2014
Article by Jack Goode, National Assembly for Wales Research Service
The Deputy Minister for Farming & Food has released a statement on measures being taken to encourage the next generation into farming. This follows the publication of the Malcolm Thomas Report in May 2014. The report identifies barriers preventing newcomers from entering the Welsh agricultural sector. The report makes 27 specific recommendations.
One of the key findings of the report is the one-in-one-out nature of Welsh farming. As the land available for agriculture is scarce, one of the primary barriers to entry is the slow rate of exit. The report finds that many established farmers feel they cannot stop farming for a range of reasons, including the lack of provision upon retirement, the social alienation that leaving farming may entail and the threat of moving from an ancestral home. The report highlights the fact that unless the issue of exit from the industry is effectively and delicately handled, further recruitment into agriculture will be hampered. This, the report concludes, could reduce the levels of innovation within the industry.
The report finds that another area of difficulty faced by new entrants is the large financial capital often required. As farms have become larger in order to guarantee income, given the relatively low profitability in the industry, the costs of land and machinery have also increased, making it particularly difficult for a newcomer to establish themselves. The Malcolm Thomas Report did however identify the willingness of banks to engage with farmers and recommended that the Deputy Minister for Farming & Food meet regularly with banks to ensure financial engagement is promoted. To financially support newcomers the report also recommended that the Welsh Government works with HM Treasury in developing assistive tax measures aimed at reducing financial barriers to newcomers.
The Welsh Government has accepted 22 of the 27 recommendations. In relation to the five rejected recommendations, the Welsh Government mainly argued that these functions could be more effectively dealt with by agencies other than the Welsh Government. It has set itself the deadline of December 2015 by which to have implemented the accepted recommendations.
The recommendations made by the Malcolm Thomas Report have strong support from NFU Cymru and FUW who both assisted in its initial drafting. Throughout the process the NFU has advocated an invigoration of the Welsh agricultural sector and believes that the additional support provided by the recommendations will be a step in the right direction.
The Young Entrants Support Scheme (YESS) is the current scheme which aims to encourage and support young entrants, under 40 years old into the agricultural sector. It provides funding, mentoring and advice to people who have joined the sector in their first 12 months, the final round of applications closed on 28th October. This programme will be superseded by the new Welsh Rural Development Plan which will operate from January 2015 until 2020. The RDP plans to keep key mechanisms of the YESS.