A possible near £100 million shortfall in funding for Welsh agriculture is a "bitter blow at a critical and extremely uncertain time" for Welsh farmers, according to NFU Cymru.

The Chancellor’s Spending Review announcement earlier today appears to show a £95 million black hole for Welsh farmers, just as the Brexit transition period nears its end.

NFU Cymru President John Davies said:

“The apparent £95 million shortfall in the Chancellor’s Spending Review is a bitter blow for Welsh farmers at what is a critical and extremely uncertain time for our industry.

In the build up to the EU Referendum and thereafter, we have been consistently told that funding for Welsh farming would be maintained and protected following our departure from the EU - we were told Welsh farming would not receive a penny less in funding as we move out of the Common Agricultural Policy (CAP).

"Now we appear to be in a position where Welsh agriculture looks like it will lose £95 million of funding that it can ill afford to lose at any time, never mind with widescale and unprecedented changes and uncertainty lying ahead for the sector."

'We are a matter of weeks away'

Davies continued:

We are a matter of weeks away from the ending of the Brexit transition period, with the potential for significant disruption to our markets for agricultural produce, alongside the massive disruption in the UK food supply chain caused by the Covid-19 pandemic.

"Any reduction in funding puts at risk the unparalleled contribution that Welsh farming makes to society in Wales, being the cornerstone of the multi-billion pound Welsh food and drink supply chain that employs 229,000 across the whole supply chain with 78,000 of these employed in the Food and Farming Priority Sector.

The prospect of such a funding cut is a severe blow to the industry’s future ambitions.

"Regardless of the eventual outcome, the Welsh government must now make a clear commitment that the £242 million announced in the Spending Review must be fully committed to the 2021 Basic Payment Scheme in Wales.

Programme spending

“In addition, we fully expect the Welsh government to spend in full the EU 2014-2020 Rural Development Programme before the end of the 2023 cut-off for drawing down funds," Davies added

In line with commitments made by governments in both Westminster and Cardiff Bay, urgent clarification must be provided on how the successor Rural Development Programme, starting from January 1, 2021, is to be funded.

“We seek urgent clarification from our elected governments as to how they will resolve this funding shortfall.

"If our fears around future funding are realised, I am afraid it will be bleak news for everyone associated with Welsh agriculture and is clearly not consistent with the government’s levelling up agenda.

"It is simply not acceptable that Welsh farmers will be the ones left to suffer," he concluded.