National Assembly for Wales

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

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

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?

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. 

Gareth.

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.

So, are you content with that engagement?

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.

Anyone else on this? Aled. Yes.

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.

Jenny Rathbone would like to come in on this. Jenny.

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.

Okay. Thank you for that.

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.

Okay. Thank you very much. I'll now bring in Samuel Kurtz. Sam.

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?

Okay. Thank you, Dennis. 

Gareth, you'd like to come in on this. 

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 thisquite 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.

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.

Okay. Gareth.

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 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.

Okay, thank you. Thank you, Chair.

Thank you, Sam. I'll now bring in Jenny Rathbone. Jenny.

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.

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. 

Okay. So, just—

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

Yes, broadening the discussion. Aled.

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. 

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—

Okay. So, what's the problem with 10 per cent tree cover then?

What is the—?

What is the problem with 10 per cent tree cover, given the huge benefits?

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. 

Well, we should celebrate that.

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 Environmental 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.

Gareth and then Dominic. 

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.

Before you go on, Jenny, we'll go to Dominic.

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.

These are some important things that we can’t clarify here today.

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 solutions?

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. 

Thank you, Jenny. I'll now bring in Luke Fletcher. 

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, exend 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.

Has he expressed a view on whether he would be willing to extend?

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. 

Dennis, do you want to come in on this?

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. 

Before I come to Samuel Kurtz, we'll go to Jenny very briefly.

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.

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

But it's not owned by the people who—.

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. 

Okay. 

Sam Kurtz. Sam. 

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. 

Okay. Thank you. Aled. 

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. 

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.

Okay. Dominic.

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.

Okay, thank you. Diolch, Cadeirydd.

Thank you, Sam. I'll now bring in Vikki Howells—Vikki.

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?

Who'd like to go first on that—Aled?

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.

Gareth.

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. 

Dennis.

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 only 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.

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.

Thank you, Chair.

Okay. Thank you, Vikki. I'll now bring back Luke Fletcher. Luke.

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?

Aled.

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 ether. 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 has to be lessons learnt that we have 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.

Gareth.

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. 

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.

Gareth.

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. 

Thank you, Luke. Jenny, did you want to come in on lessons learnt?

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 are well in the way that we address it. 

And things like soil compaction, does that come into 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. 

Gareth. 

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. 

Dominic. 

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 five or six, or even smaller than that, you're spreading yourself too thin. Focusing on the key—

Just very briefly, Aled. 

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.

Fantastic. Gareth. 

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

Very briefly, then. 

Just very briefly, because I want to bring in Hefin David as well. 

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.

Okay. Thank you. I'll now bring in Hefin David. Hefin.

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

Aled.

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.

Gareth.

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.

Thanks, Chair.

Dennis, just on this.

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.

Okay. Aled, did you want to come in on that?

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.

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.

Thank you. Andrew Tuddenham.

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.

Rhys Owen.

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.

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. 

Okay. Andrew. 

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. 

Okay. Rhys Owen. 

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—

Okay. And Rhys Evans.

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.

Okay. Anyone else? Andrew.

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.

Okay. Anyone else on this, before I move on? Rhys Owen.

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.

Okay. Okay, thank you very much. I'll now bring in Samuel Kurtz. Sam.

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.

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—

Well, there's no budget attached to it.

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.

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.

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. 

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.

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.

Alex Phillips.

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—

'Simple'? You think it's a simple route.

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.

Well, yes—

What's wrong with Google?

We'll come on to the tree cover now, in a minute, but back to you, Sam.

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.

Thanks, Andrew. Thank you, Chair.

Okay. Thanks, Sam. I'll now bring in Luke Fletcher. Luke.

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.

Andrew.

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.

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.

Yes, I'll go with you, Rhys.

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.

Okay. Thank you, Luke. I'll now bring back Jenny Rathbone. Jenny. 

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 ha 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—

I understand that. Thank you for your answer. Rhys Evans. 

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.

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.

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.

Okay. Obviously, we'll have to discuss that elsewhere. Can I move on?

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.

Okay. Thank you, Chair.

Okay. Thank you. Back to you, Jenny.

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?

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.

So you still have to have 3 hectares in order to enter?

That's the proposal with the SFS.

Okay.

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.

Okay. Rhys Evans would like to come in, very briefly, on this. Rhys.

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. 

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. 

Great, thank you very much. Rhys Evans, you want to come in. 

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. 

Alex. 

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.

Anyone else on this? Andrew.

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.

We have Rhys Evans and Rhys Owen. Rhys Evans first. 

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.

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.

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 plating, 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, James. Thank you, Chair.

Thanks, Sam. I'll now bring in Jenny Rathbone.

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.

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.

Okay. Janet, do you want to come in on this hedgerow issue?

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 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.

We're in Wales, though, we have loads of wind. Why do we need biomass?

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—

But it could run off hydro or solar—

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—

And it doesn't advance the case unless it's green hydrogen.

Yes.

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.

Janet Dwyer, you'd like to come in on this.

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

This is the UK Government, is it?