Farming in Wales in 2025: Challenges and Opportunities

Welsh Affairs Committee Open Inquiry
Opened: 10 Mar 2025 Parliament page
Wales has a long tradition of farming, and the sector is integral to the Welsh economy. In 2022, agriculture, fishing and forestry accounted for 1.8% of total employment in Wales and over 90% of the land area of Wales is utilised for farming. Our predecessor Committee reported that in 2020, … Read more
8 Recommendations
17 Conclusions
2 Reports
2 Oral sessions
11 Letters
2 Events
Activity timeline 18 events
25 Mar
2026
Correspondence
25 Mar
2026
Correspondence
11 Mar
2026
Correspondence
30 Jan
2026
Report published
7 Jan
2026
Correspondence
12 Nov
2025
Report published
12 Nov
2025
Report published
4 Sep
2025
Correspondence
17 Jul
2025
Correspondence
17 Jul
2025
Correspondence
17 Jul
2025
Correspondence
17 Jul
2025
Correspondence
Oral evidence sessions 2 sessions
16 Jul 2025
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Oral evidence
Ceri Morgan CBE · Department for Environment, Food and Rural Affairs Daniel Zeichner MP · Department for Environment, Food and Rural Affairs Tessa Jones · Department for Environment, Food and Rural Affairs
4 Jun 2025
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Oral evidence
Aled Jones · National Farmers Union Cymru Dominic Hampson-Smith · Wales Young Farmers Clubs Gareth Parry · Farmers’ Union of Wales (FUW)
Recommendations & Conclusions
25 results
1 Conclusion Acknowledged
2nd Report - Farming in Wales in 2…
Welsh farming remains a vital but low-income and demanding profession.
In Wales, farming is a vital profession, central to the preservation of the Welsh language and rural culture. Despite its significance, it remains a physically demanding, low-income sector, largely made up of small, family- run livestock farms with an average … Read more
Government Response
The government acknowledges the essential role of the farming sector in Wales, recognizing its importance to the Welsh economy, life, and identity.
Wales Office
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2 Conclusion Acknowledged
2nd Report - Farming in Wales in 2…
Welsh farms are culturally significant, sustaining communities and the Welsh language.
We re-emphasise the cultural importance of Welsh farms, which not only produce food but are the foundation stones of local communities and help sustain the Welsh language. A higher proportion of Welsh speakers work in agriculture compared to the general … Read more
Government Response
The government acknowledges the essential role of the Welsh farming sector in supporting its Growth Mission and contributing to Welsh life and identity.
Wales Office
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3 Conclusion Accepted
2nd Report - Farming in Wales in 2…
Support the objective of reforming property reliefs to close tax avoidance loopholes.
We support the objective of reforming Agricultural Property Relief (APR) and Business Property Relief (BPR) to close the loophole that encouraged wealthy investors to purchase agricultural land as a means of avoiding tax. (Conclusion, Paragraph 49)
Government Response
The government details its announced reforms to Agricultural Property Relief and Business Property Relief, effective from April 2026, including an increase in the 100% relief allowance from £1 million to £2.5 million to protect more farms and businesses.
Wales Office
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4 Conclusion Accepted in Part
2nd Report - Farming in Wales in 2…
Farm valuation-based IHT impact assessments are limited and potentially misleading.
Impact Assessments based on farm valuations may offer a general indication of how many farms could potentially exceed the £1 million Inheritance Tax (IHT) threshold, however such assessments are limited. Without access to detailed information on individual farm circumstances, such … Read more
Government Response
The government acknowledges concerns by increasing the 100% relief allowance for agricultural property relief from £1 million to £2.5 million, allowing couples to pass on up to £5 million tax-free, and refers to a published note detailing the reforms.
Wales Office
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5 Conclusion Not Addressed
2nd Report - Farming in Wales in 2…
UK Government has not provided Wales-specific data on IHT reform impact.
We are concerned that the UK Government has been unable to provide any clarity on the specific impact of its proposed IHT reforms in Wales or supply any Wales-specific data. Only UK-wide figures for farming estates potentially liable to pay … Read more
Government Response
The government acknowledges concerns about IHT reforms by increasing the 100% relief allowance to £2.5 million, but does not provide clarity or Wales-specific data on the impact, instead referring to a UK-wide technical note.
Wales Office
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6 Conclusion Accepted in Part
2nd Report - Farming in Wales in 2…
Policy change creates disproportionate impact on elderly and terminally ill Welsh farmers.
We are also concerned that the change in policy may have a disproportionate impact on elderly farmers or those with terminal illness who have arranged their affairs on the basis that their estates would not be subject to IHT, and … Read more
Government Response
The government acknowledges concerns by increasing the 100% relief allowance for agricultural property relief from £1 million to £2.5 million, allowing couples to pass on up to £5 million tax-free, following feedback from the farming community.
Wales Office
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7 Conclusion Not Addressed
2nd Report - Farming in Wales in 2…
Government's complacent approach to farm tax changes generated uncertainty for Welsh farmers.
The Government was complacent in the way it introduced such a major change to the tax treatment of farms in Wales. The absence of an assessment of the impact on Welsh farming estates created a vacuum which was filled by … Read more
Government Response
The government acknowledges concerns about IHT reforms by increasing the 100% relief allowance to £2.5 million but does not address the committee's criticism regarding its complacent approach or the absence of a Wales-specific impact assessment.
Wales Office
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8 Recommendation Rejected
2nd Report - Farming in Wales in 2…
Delay implementing final APR and BPR reforms pending a Wales-specific impact assessment.
We are disappointed that the Government has maintained a complacent approach to measuring the impact of these tax changes despite the scale of public disquiet in Wales. In the absence of a Wales-specific Impact Assessment, the UK Government must delay … Read more
Government Response
The government rejects delaying implementation for a Wales-specific impact assessment, stating it has increased the APR/BPR allowance to £2.5 million after listening to feedback and that a technical note has been published for UK-wide changes.
Wales Office
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9 Conclusion Acknowledged
2nd Report - Farming in Wales in 2…
UK Government removed agricultural funding ring-fencing at Welsh Government's request.
We acknowledge that the UK Government’s decision to remove the ring- fencing and apply the Barnett Formula to future agricultural funding was made in response to a request from the Welsh Government. We note that the Welsh Government’s view on … Read more
Government Response
The government confirms that agriculture and fisheries funding is now added to devolved governments' baseline, maintained in cash terms, and is no longer ringfenced, with the Welsh Government responsible for its expenditure.
Wales Office
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10 Conclusion Accepted
2nd Report - Farming in Wales in 2…
Devolution principle requires Welsh Government autonomy over its budget, free from ring-fencing.
It is a fundamental principle of devolution that decisions affecting Wales should be made in Wales and that the Welsh Government should have autonomy over its budget, without ring-fencing imposed by the UK Government. (Conclusion, Paragraph 66)
Government Response
The government confirms that agriculture and fisheries funding is no longer ringfenced and devolved governments, including Wales, now have autonomy to decide how to spend this funding from 2025-26.
Wales Office
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11 Conclusion Acknowledged
2nd Report - Farming in Wales in 2…
No evidence indicates decline in Welsh agricultural funding after ring-fencing removal.
We note the concerns raised by stakeholders during our oral evidence sessions about the potential for this change to lead to a reduction in Welsh agricultural funding. The evidence we received from the UK and Welsh Governments does not suggest … Read more
Government Response
The government confirms agriculture and fisheries funding has been added to the devolved governments’ baseline from 2025-26, maintained in cash terms, and is no longer ringfenced, with the Welsh Government responsible for spending decisions.
Wales Office
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12 Recommendation Rejected
2nd Report - Farming in Wales in 2…
Maintain ring-fencing of agricultural funding to safeguard the future of Welsh agriculture.
To help safeguard the future of agriculture, we believe there is a strong case for the Welsh Government to maintain the practice of ring-fencing agricultural funding. This would provide continuity, certainty and ensure that all allocated resources are dedicated exclusively … Read more
Government Response
The government explains that agriculture and fisheries funding is no longer ringfenced, having been added to devolved governments' baseline, and that the Welsh Government is now responsible for how to spend this funding, thus not supporting the recommendation for continued ring-fencing.
Wales Office
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13 Recommendation Acknowledged
2nd Report - Farming in Wales in 2…
Ensure baselining of agricultural funding does not lead to real-terms decline for Wales.
We recommend that the Treasury and Wales Office work collaboratively with the Welsh Government to ensure that the baselining of agricultural funding into the Welsh Government’s block grant, alongside the application of the Barnett Formula to future allocations, does not … Read more
Government Response
The government states that agriculture and fisheries funding will be added to devolved governments’ baseline funding from 2025-26, maintained in cash terms, and no longer ringfenced, with the Welsh Government responsible for spending decisions. It does not commit to preventing a real-terms decline.
Wales Office
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14 Conclusion Accepted
2nd Report - Farming in Wales in 2…
Lack of clear timeline concerning for UK-EU Sanitary/Phyto-Sanitary (SPS) zone establishment.
We welcome the foundational agreement between the UK and EU to establish a common Sanitary/Phyto-Sanitary (SPS) zone. However, we are concerned about the lack of a clear timeline for when an SPS zone will be established. (Conclusion, Paragraph 80)
Government Response
The government states negotiations for a Sanitary and Phytosanitary (SPS) Agreement with the EU have commenced and aims to conclude discussions and have legislative arrangements in place no later than 2027.
Wales Office
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15 Recommendation Accepted in Part
2nd Report - Farming in Wales in 2…
Intensify efforts to establish UK-EU SPS zone and publish a roadmap by May 2026.
The UK Government must intensify efforts to fully establish an SPS zone with the EU, as a key step towards reducing trade friction for Welsh agricultural exports. We call on the Government to publish a roadmap for how they plan … Read more
Government Response
The government states it is committed to working with the EU to advance an SPS agreement, describing it as a central element of their work to reduce agri-food trade friction and cut costs. However, the response does not commit to publishing a roadmap for how they plan to establish the SPS zone by May 2026.
Wales Office
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16 Conclusion Rejected
2nd Report - Farming in Wales in 2…
Australia and New Zealand FTAs disproportionately disadvantage Welsh agricultural sector
The UK’s Free Trade Agreements (FTA) with Australia and New Zealand will disproportionately disadvantage the agricultural sector in Wales. Beef and sheep meat make up a significantly larger share of the agricultural sector in Wales compared to England. As a … Read more
Government Response
The government rejects the committee's concern, stating there is no evidence that the FTAs have impacted Welsh beef or lamb production, as quotas have not been fully utilised and imports are primarily displacing other imports. They also highlight existing safeguard mechanisms within the agreements.
Wales Office
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17 Recommendation Accepted
2nd Report - Farming in Wales in 2…
Ensure Free Trade Agreements do not undermine the viability of farming in Wales
We are concerned that Free Trade Agreements have been entered into in the full knowledge that Wales’ agricultural industry may be negatively impacted. The Government must ensure that FTAs do not act as a ‘Trojan Horse’ that, overtime, will undermine … Read more
Government Response
The government states it carefully monitors trade data and sees no evidence that FTAs with Australia and New Zealand have negatively impacted Welsh beef or lamb production, as imports are primarily displacing EU imports. It highlights existing safeguards within the agreements.
Wales Office
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18 Recommendation Rejected
2nd Report - Farming in Wales in 2…
Publish an action plan by May 2028 supporting Welsh farms against FTA impacts
As the Tariff Rate Quotas progress towards a highly liberalised trade arrangement, the UK Government, in consultation with the Welsh Government and Welsh industry, should publish an action plan which sets out how farms in Wales will be supported to … Read more
Government Response
The government rejects the need for an action plan, stating there is no evidence of negative impact on Welsh beef or lamb from current trade agreements, highlighting existing safeguards and its commitment to increasing export opportunities.
Wales Office
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19 Conclusion Accepted
2nd Report - Farming in Wales in 2…
Disparity in production standards threatens competitiveness of Welsh farming
We are concerned about the perceived disparity in production standards and the levels of financial support received by farmers in countries that the UK Government is negotiating trade agreements with. We are also concerned that lower-cost imports produced to less … Read more
Government Response
The government states it carefully monitors trade data and has found no evidence that trade agreements with Australia and New Zealand have negatively impacted Welsh beef or lamb production, with imports mainly displacing EU products. It highlights existing safeguards within the agreements.
Wales Office
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20 Conclusion
2nd Report - Farming in Wales in 2…
Groceries Code Adjudicator lacks sufficient powers for Welsh agricultural sector
We recognise that there is some dissatisfaction among stakeholders concerning the effectiveness and scope of the Groceries Code Adjudicator. There remain concerns about whether the Groceries Code Adjudicator has sufficient powers to address the full spectrum of challenges facing the … Read more
Wales Office
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21 Conclusion Acknowledged
2nd Report - Farming in Wales in 2…
UK Government fails to recognise tenant farming's vital role for new Welsh entrants
We support a long-term vision for farming in which generational transition within the sector is more actively supported. This includes creating clear and viable pathways for new entrants into farming, while ensuring that older farmers feel confident and assured to … Read more
Government Response
The government acknowledges the importance of supporting new entrants and tenant farmers in Wales, stating that Defra officials continue to work closely with the Welsh Government to develop programmes.
Wales Office
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22 Recommendation Acknowledged
2nd Report - Farming in Wales in 2…
Develop targeted support and upskilling for new Welsh farmers, protecting tenant farming
The UK Government should work in close partnership with the Welsh Government to develop more targeted support and technical upskilling programmes for young and new entrants into the Welsh farming sector. In doing so, it must actively promote and protect … Read more
Government Response
The government recognizes the importance and states that Defra officials continue to work closely with the Welsh Government on shared challenges, remaining committed to constructive engagement as both governments develop programmes.
Wales Office
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23 Conclusion
2nd Report - Farming in Wales in 2…
Declining trends in Welsh farming threaten UK food security and require urgent focus
The UK’s food security is dependent upon sustainable domestic production, and by that measure the trends in Wales should be cause for concern. The number of people employed in the industry in Wales has declined, trade with key European markets … Read more
Wales Office
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24 Conclusion Accepted
2nd Report - Farming in Wales in 2…
Wales Office has not adequately represented Welsh farming needs in Whitehall
Farming practices and conditions in Wales differ significantly from those in England, and it is essential that these differences are fully understood by policy makers in Westminster. In its discussions with the UK Government, it is incumbent upon the Welsh … Read more
Government Response
The government states that the Wales Office already supports UK Government departments in designing policies that reflect Wales' needs and works with them to assess policy impact in the agricultural sector.
Wales Office
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25 Recommendation Acknowledged
2nd Report - Farming in Wales in 2…
Conduct Wales-specific impact assessments for all future policy decisions affecting Welsh farming
The UK Government needs to take specific account of the unique cultural, environmental and economic circumstances of farming in Wales when making future policy decisions which have direct implications for the agricultural sector in Wales. We recommend that any future … Read more
Government Response
The government states the Wales Office supports departments in designing policies that reflect Welsh needs and works with them to assess policy impact as appropriate, but does not specifically commit to Wales-specific impact assessments led by the Wales Office.
Wales Office
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Government Response AI assessment · 23 of 8 classified
Accepted 6
Accepted in Part 3
Acknowledged 8
Not Addressed 2
Rejected 4
Total 8 recs + 17 conclusions
Correspondence 11 letters
25 Mar 2026 Correspondence to and from Department of Business and Trade, relating to the Government response to the Farming in Wales report, dated 3 February and 13 March 2026
Parliament page
25 Mar 2026 Correspondence to and from the Home Office, relating to withdrawal of the visa concession for temporary employment as sheep shearers, dated 2 March and 13 March 2026
Parliament page
11 Mar 2026 Correspondence to and from HM Treasury, relating to Farming in Wales in 2025, dated 3 and 25 February
Parliament page
7 Jan 2026 Correspondence from the Department for Environment, Food and Rural Affairs relating to reforms of Agricultural Property Relief and Business Property Relief, dated 23 December.
Parliament page
4 Sep 2025 Correspondence from the Deputy First Minister and Cabinet Secretary for Climate Change and Rural Affairs dated 18 August 2025 relating to Farming in Wales in 2025: Challenges and Opportunities
Parliament page
17 Jul 2025 Correspondence from the Wales Young Farmers Clubs to the Chair relating to the 4 June evidence session
Parliament page
17 Jul 2025 Correspondence from the Farmers’ Union of Wales to the Chair dated 26 June 2025 relating to the 4 June evidence session
Parliament page
17 Jul 2025 Correspondence from the Chair to NFU Cymru dated 9 June 2025 relating to the 4 June evidence session
Parliament page
17 Jul 2025 Correspondence from the Chair to the Wales Young Farmers Clubs dated 9 June 2025 relating to the 4 June evidence session
Parliament page
17 Jul 2025 Correspondence from NFU Cymru to the Chair dated 26 June 2025 relating to the 4 June evidence session
Parliament page
17 Jul 2025 Correspondence from the Chair to the Farmers’ Union of Wales dated 9 June 2025 relating to the 4 June evidence session
Parliament page