Good afternoon, everyone, and welcome to this oral evidence session of the Welsh Affairs Select Committee. My name is Ruth Jones and I am the Chair of the Committee. Before we start formal proceedings, if anyone needs to take their jackets off please feel free to do so, given that it is rather warm in this room. This is the second session of our inquiry, “Farming in Wales in 2025: challenges and opportunities”. On 4 June, we held our first session with representatives of NFU Cymru, the Farmers’ Union of Wales, and the Wales Young Farmers Clubs. Today, we will be hearing from the Minister for Food Security and Rural Affairs, Daniel Zeichner MP, alongside two DEFRA officials, Ceri Morgan CBE, director of EU and international trade, and Tessa Jones, agri-food chain director. This session is going to build on the evidence that we gathered during our first session and will allow the Committee to scrutinise the UK Government’s role in reserved matters that directly impact the agricultural sector in Wales. Before we begin, can I ask any members to declare any interests that they have that are relevant to today’s session?

I refer the Committee to my entry in the register of interests that I declared on 4 June, the first session.

Thank you very much. Minister, first of all thank you very much for attending our session this afternoon and for bringing your two officials with you. That is really helpful. As a UK Minister at DEFRA, what is your assessment of the current state of farming in Wales in terms of the key challenges and opportunities that are facing Welsh farmers?

First of all, good afternoon, everybody, and thank you very much for giving me the opportunity to appear before you today. I have the best job in Government, so it is a huge privilege to speak on matters of such importance to the people of Wales. I know just how important farming and the food system are to Wales. One of my very first visits, when I was appointed to this role a year ago, was to Wales, because I wanted to send a clear message that I wanted to work closely with the Deputy First Minister, who I have known for a long time. It was a real privilege to visit Abi Reader, from the Welsh NFU, and her farm. I have had many conversations with her over a long time. Let me say a little bit about how I see it. Clearly, the matters are devolved, so many of the farming issues are, rightly and properly, for the Welsh Government, and I am sure that we will explore some of that. I am not from Wales, so there was much for me to learn, but I understand that over 90% of the land is used for farming, and the strong sense that I have got on my visits is just how important farming is—not just to the Welsh economy, but to the very core of what Wales is about. I got that sense of passion, particularly from the Deputy First Minister and some of the farmers who I met on that visit and subsequently. As the UK Government’s representative for farming, I realise that I have a huge responsibility not just for English farmers but for the whole United Kingdom. While fully devolved, the UK Government retain key responsibilities in areas such as international trade, taxation and immigration, all of which impact farming in Wales. My strong message to you as a Committee is that we are very strongly committed to working in close partnership with the Welsh Government to overcome the challenges that face all of us—the climate, the weather, biosecurity threats and so on. You asked me about the issues with farming in Wales. I will be very mindful of that. I do not want to in any way tread on the toes of the Welsh Government. It is very timely, given the Welsh Government’s announcements yesterday. The challenge of phasing out the basic payment scheme across the United Kingdom is something that we have talked about a lot in this place over the last six or seven years. I was really pleased to see the Welsh Government coming forward with their sustainable farming scheme yesterday. It is a big shift, just as we have been undergoing in England, in terms of how public money works in the rural economy and with farmers. It is a major transformation, and I recognise that change is difficult. There is always uncertainty when you get change in any system. I quite appreciate that, alongside other issues, there is uncertainty and anxiety felt across the rural economy. I would also say that it provides an opportunity to move to sustainable food production in the future to come. Those two things need to be balanced, being mindful of how people feel, but also, I hope, reassuring people that there is potential in the future. In terms of the relationship between the UK Government and the Welsh rural economy, we are committed to ensuring that Wales receives a fair share of UK agricultural support. You will be aware that we have been through two spending reviews. The settlement that was announced recently will, in our view, support long-term economic growth in Wales and will provide the resources to build a more productive and resilient farming sector. We know that one of the challenges is access to skilled and seasonal labour. That is common across the United Kingdom, but we know that it is a particular a challenge in the horticulture and livestock sectors, and, of course, livestock is particularly important in Wales. In February, the Government announced an extension to the seasonal worker visa route until 2030, which is what people have been asking for. They wanted some certainty looking ahead, and we believe that that provides the sector with workforce stability. Alongside that, we—and, I think, the country—feel that we need to move away from reliance on migrant labour, but we understand that that is a transition that needs to be managed carefully. Moving on briefly to trade, which is clearly very important, we are really proud to champion Welsh produce on the global stage. One of the things that I have found most exciting about the role, quite frankly, is the brilliant food that is produced in Wales. We absolutely need to bang the drum for it. We have secured new trade agreements that open up good opportunities and new markets for Welsh lamb, beef and dairy, but we need to make sure that those agreements do not undercut domestic production, which is why we are absolutely determined to uphold high standards and ensure fair competition. Coming to a close in terms of my opening comments, I also want to highlight the importance of the UK-EU relationship for Wales. As members will know, we are negotiating a sanitary and phytosanitary agreement to make agri-food trade with our biggest market cheaper and easier, cutting costs and red tape for Welsh producers and retailers. There are some very good examples of where I am afraid it has been hard for Welsh producers and where there are, we hope, new opportunities. I am very grateful for the continued input of Welsh Government officials and Ministers in the run-up to and since the UK-EU leaders’ summit back in May. Close working in recent months has helped to inform the Government’s objectives and priorities for the SPS agreement. There are many areas in which, as a Department, DEFRA needs to and does work very closely with Welsh Government officials to secure success for the Welsh farming sector.

Thank you, Minister, for your opening statement. I am sure that, as a Committee, we will drill down into quite a few of those areas now.

Good afternoon, Minister. It is nice to see you. In our first session in this inquiry, back on 4 June, we heard from three of the largest farming groups in Wales. I know that you will not be at all surprised to hear this, but they were best described as being aghast at the proposed tax changes announced in the Budget, and felt that there was a real absence of lived experience, as far as agricultural practice was concerned, during that policy formulation. They augmented their concerns by highlighting to the Committee in their oral evidence that the average income of most farms in Wales is just £22,000 per year. My question is not on tax. I just set that as a backdrop, because colleagues will ask questions separately on that. We are keen to hear what the UK Government are doing or can do to help improve the profitability of farming in Wales and also address their rising costs.

It is very good to see you. It is a very important question, and we probably will go on to talk about the tax issues. Looking across the whole of the United Kingdom, it seems to me that there is certainly a challenge for the sector in terms of getting a generational shift. That is hard, because farming is not like other jobs. It is a way of life. People live on the job. When it comes to retiring, we know that a lot of people do not. We also know that the advice that has been given for many years was that it was a sensible thing to do to carry on. I fully appreciate that this is a very difficult change, but I would not resile from the feeling that, if we are going to get younger people into farming, things do have to change. I was very struck by the evidence that you took in your previous session. Was it Dominic Hampson-Smith from the Wales Young Farmers Clubs?

Yes.

I thought that he spoke really well, and I recognised it from discussions I have had with similarly motivated young people across the country. I do not say that any of this is easy, but we have to make a change for a number of reasons. I just think that, in the modern world, it is a bit of a tough ask to expect people to work until their last day in any job, even if it is a job that they love and they have a passion for it. I would quite like to do that myself. To make sure that there is opportunity for a new generation, there has to be some change. I would say that it is partly that, but, when he was asked, “How do you get into farming?” one of his answers was, “You marry into it”, and he did not think that that was a very good thing to do, even though, of course, it is quite traditional and has often been done. We have a challenge as a UK Government, but also as devolved Governments. Everybody has a challenge to think through how we manage this transition in a way that respects the individual choice of people, but also gently nudges them so that we can make room for younger people. There are other things. There are all the tenancy issues. There are also the training and skills issues for younger people. I am sure that members will be aware of the Institute for Agriculture and Horticulture, which has been established in the last few years as another attempt to complement the agricultural colleges to give people the skills that they need. The other thing that I would say is that, in a changing world, with the kinds of challenges that we are seeing now around climate, disease threat and so on, farming is becoming a more and more technical job. We are going to see new technologies. With absolutely no disrespect to the huge experience that people who have been farming all their lives have, it is going to be easier for a new generation to perhaps pick up some of these new technologies. There are many reasons why we need that change, but we should always be mindful of the impact that it has on individuals and their families.

Minister, I do not disagree with much of what you said with regard to the desirability of future-proofing agriculture, both in Wales and, indeed, across the United Kingdom, with a cemented-in next generation. Most will know that it is tough work. It is long hours. It is antisocial. It is 365 days a year, particularly if you are in the livestock sector. That average income of £22,000 is only going to be hit adversely with rampantly rising costs. You have referenced climate and weather. We know full well that a lot of sheep farmers are badgering to have land that is preserved released for grazing, because of the shortage of rain that we have had. People are using winter fodder now, which is going to add to their costs and to commodity prices for the consumer. Let me just return to the original question. It may well be, “Look, Simon, because this is devolved, there is nothing that the UK Government can do”. If the UK Government cannot, then at least we should know that. What are the Government doing, or what can they do, to help bolster profitability, which is fairly scant at the moment, and to address those rising costs? Unless both are addressed, notwithstanding your good intentions in your opening answer to this question, it is going to be very hard to persuade anybody who is young to go into that sector, or, indeed, stay within it.

Those are really important questions. I remember sitting in some Committee room discussing the Agriculture Act four or five years ago—it may even have been longer—and it was quite telling in the impact assessments. When you looked at the number of farms across the UK, they were really very marginal, and probably, without external support, were not viable. This is not a new issue, but it is a stark one. £22,000 to £23,000 is not a great return for all that work and effort. The Secretary of State has been very clear on this. When he was at the Oxford farming conference, he talked about this. He thinks that farming should return a profit. He thinks that it is a business, and many people agree with him. I would say that it absolutely should, but it is a slightly different one from other types of business. We have got ourselves into a position where we have a food system that does not return sufficient amounts to the primary producers. Again, this is not a new issue or a new challenge. There is whole series of things that the UK Government can do. Previous Governments have started this, and we are taking it up as well, and we will probably come on to supply chain fairness. We are looking at the contracts within sectors. The dairy sector was addressed by the last Government. We have done the pig sector, and we will be looking at others in future where we feel it would be helpful. Alongside that, the Secretary of State asked Minette Batters, the previous president of the National Farmers’ Union, to do a piece of work specifically on how we can address profitability in farming. Frankly, we are in a changed world, where we are no longer within the CAP. Whatever one feels about it, it was a protective umbrella. We are in a different world now, and we can no longer ignore this basic problem around parts of the farming sector. I am from the east of England, and there are parts of the farming sector that are very profitable, but, exactly as you say, it is a very real challenge in Wales. Aled Jones has spoken to me on a number of occasions with real passion about just how difficult that is. Alongside that, there are things that the UK Government can do, particularly around improving productivity, and this is where we turn to some of the agri-tech points. In terms of specific measures around agri-tech, we are hoping to pull in at least £50 million in private investment by 2029. We are hoping to increase agri-tech sector turnover to at least £20 billion by 2035. Our view is that we can make changes, but we can do it only with the sector. We need to make sure that the sector has the opportunities to use these new technologies, because it is quite striking. I remember talking to Abi on her farm about the changes in genetics, for instance. It is really quite striking, but the Government have a role to play.

I just want to turn briefly, if I may, to intergovernmental relations; I chair PACAC for the House and have responsibility for scrutinising this area. I just want a word or two, Minister, if you might, on the effectiveness, in your assessment, of the inter-ministerial group for environment, food and rural affairs and how that facilitates collaboration between the UK and Welsh Governments, notwithstanding the fact that agriculture is devolved. We are a small archipelago of islands just off the northern coast of France, and maybe the sum of all of us is better than the parts pulling in different places. Within that working group, how are the distinct priorities and the needs of Welsh farmers reflected in policy development?

This is a really important issue as well. I am delighted to say that, in my view—and I have chaired a number of these inter-ministerial groups now—we have a really good working relationship. There is, of course, always scope for improvement and more, but it is the key forum for joint discussion at ministerial level. Every now and then, we are able to have some quite detailed discussions. Back in June, we had a discussion on the circular economy. We started the year in January on farm support. It is a full and frank discussion, and I have to say that the devolved Ministers do not pull their punches. We may be friends, and sometimes political allies, but they very much make the case for their Administrations. At official level, there is an extraordinary complex array of discussions, steered by the agricultural support common framework, which was introduced in 2022, after Brexit. There are a whole series of different groups that discuss, on a near weekly basis in some cases, the detailed issues that affect us all. I am always particularly impressed to see how the chief vets work together, because, whatever our political arrangements on biosecurity, I am afraid that we are, to some extent, protected by being an archipelago of islands. I am afraid that it is a daily challenge for us all, and very important that they work together effectively. In answer to your question, we have the right structure. It depends a lot on the energy and the goodwill of the Ministers involved. I pay tribute to all of them, because they always make themselves available, sometimes at short notice. When there are issues that come up that we need to address, people are very good. In the modern world, we can do an awful lot of it remotely. It is more difficult to find time in diaries to get everyone together in the same place and at the same time. I have to say that, when I took on the post a year ago, it was one of the things that I personally felt very committed to trying to make sure worked, because I was conscious that it is the kind of thing that, over a period of time in Government, can become difficult. I felt that it was an opportunity to make a new start. As I say, that was one of the reasons why I beat a hasty path to Wales early on. I have been to Scotland. I will be going to Northern Ireland fairly soon, although I did so just before the election, so I got to know Andrew then. We have good relationships, but I am sure that, if you asked them, they would say that there is more to be done.

They always do. Thank you, Minister.

Minister, your answers are very full and comprehensive, but can I ask for a bit more brevity, because we have a lot more people with a lot more questions?

No, not at all. Thank you for the question, and, yes, I did anticipate it. Many of us have had exchanges in the Chamber on this issue. They were sometimes a little pointed. I apologise. The Chamber is a different forum from here. The first thing that I have to say is that this is a decision for the Treasury, so I can attempt to answer your question up to a point. What I will say is that it is not decision for me as a DEFRA Minister. What I would also say right at the outset is that, whatever I and others feel about the policy, I do not underestimate the strength of feeling and the stress that people feel about this issue. Even though I would disagree with some of the accounts that have been given, I do not, in any way, underestimate how much people worry about this. That is a source of real concern to me, which is why it is very important that we do understand it. The evidence that you and the EFRA Select Committee took—and I know that some of you are members of the EFRA Select Committee—demonstrated just how complicated this issue is. There are many forms of holdings and many different structures. I would say that the Treasury’s figures and the way that it has arrived at them are the only sure guide to the numbers that we can anticipate. That is my view. I appreciate that you and others who have looked at this will have a different view, but I do think that we are measuring slightly different things. I do not anticipate it being possible to do a geographically specific assessment, because, for the estates that have been subject to tax in the past, it is a paper-based system, and that is not possible. The Treasury has done all the assessment that it needs to assure itself, and me, that the numbers are correct, but, as I say, I do not dispute the fact that others take a different view.

That is why I stand with the Government. I would also just gently point out that there is a difference between the value of a farm and the value of an estate that is passed on at death. As I said earlier, a farm can be jointly owned by multiple people and many family members. This is a really complicated area. I genuinely think that the projections that have been made by various organisations are based on something different. I stand by the figures that the Treasury has produced, and that is why I think that the majority of people will not be subject to this.

Good afternoon. Prior to the announcement of these inheritance tax reforms, what specific discussions or consultations did your Department engage in with Treasury officials regarding the potential impact of the reforms?

As you will know, Budgets are very much the responsibility of His Majesty’s Treasury. What I would say is that, although it came as a shock to some, this issue had been discussed over many years. I had been lobbied by a number of groups two or three years prior to the election on these issues. Going back through old issues of Farmers Weekly, as I sometimes do, I could not help noticing that, long before the Budget, advisers were saying that it would be sensible for people to think about the possibilities of change, because change was almost inevitable at some point in the future. While I absolutely accept that people are anxious about this, what I want to say is that I would reassure most people that they will not be affected by it.

To what extent do you believe that the UK Government adequately acknowledged and addressed the concerns of farmers in Wales, both prior to and following the announcement of the inheritance tax reforms in October 2024?

What I would say is that it has been discussed at some length in this place. I responded to an urgent question within days, and many of you made your points very forcibly about it then. There have been numerous debates in Westminster Hall. A month or two after the announcement, I and one of the Treasury Ministers met Aled and other representatives from the devolved nations, as well as the NFU, to discuss this in great detail. Although I would not say that there has not been discussion, I would acknowledge that the Treasury’s position has stayed consistent.

Minister, you are right to point out that there have been conversations, debates and all the rest of it. When the Home Office, the Department for Education, the Department of Health, the Ministry of Justice or the MOD has a punch-up with Treasury leading up to a Budget, a fiscal event, a spending review or whatever, it is known, because Ministers are very keen to get out to their stakeholders that they are fighting their corner and advocating the case. You were a fantastically energetic champion for farmers when you and I did quite a lot of work together over the Ag Bill and the Trade Bill, and other elements. DEFRA now just appears to be supine, and to roll over and have its tummy tickled, as far as the Treasury is concerned, with no proactive, semi-public advocacy for the sector back to Treasury. Treasury is not an agricultural Department—it is a Department of pounds, shillings and pence. Yours is. I do not think that anybody, irrespective of which part of the kingdom they reside or work in, feels that DEFRA Ministers have gone in and left with, if I can use the phrase, blood on the floor as a result of a punch-up with Treasury Ministers. Is that a fair assessment?

There are a number of ways of doing politics, and my approach to politics does not involve blood on the floor or punch-ups. What I would say is that, before the last spending review, there were many people who thought that the money available for farming and the environment would be cut drastically. The Secretary of State got a remarkably good settlement for DEFRA. There are better ways of doing politics than punch-ups.

Thank you for your succinct answer, Minister.

Good afternoon. In our previous session, stakeholders came forward with some suggestions for alternatives to the inheritance tax reforms, such as a clawback mechanism or a transitional arrangement, rather than a full reversal of the reform. Are the UK Government considering any of these approaches?

Of course, we always listen to constructive proposals, but what I am told by Treasury colleagues is that a clawback would mean that inheritance tax would only be due if the relevant assets are sold within a specified time period after a death. The Treasury’s analysis is that some of the wealthiest estates would end up paying less inheritance tax compared to the proposals that we have come forward with. It is quite important to note that the reason for these tax proposals is partly because so much of the benefit was going to a relatively small number of people. Some 40% of the Exchequer’s cost of agricultural property relief went to the top 7% of claims. That means that just 117 estates benefited from £219 million in tax forgone. Of course, we will look at the clawback suggestion, but it is also not the case that it would raise the same amount of revenue. I would also make the point, which I perhaps should have done right at the outset, that this was a tax-raising measure. The reason why we need to raise tax in this country is to pay for all the things that people in rural areas, including in Wales, depend upon. If we want the health service, if we want to tackle rural crime, and if we want to grow the economy, we need the money to pay for it. While I fully accept that no one ever wants to pay more tax, when I look at that and see some very wealthy estates doing rather well out of the current system, I am afraid that I do not make any apologies for looking closely at inheritance tax.

Welcome to you all. I am going to move on to trade. Last week, we heard from the Wales Office Minister, who explained the significance of the UK-EU reset deal. I wondered what your assessment was of the impacts that the reset deal will have on Welsh agriculture, particularly in terms of improving access to EU markets for Welsh farmers.

It is warming up in here, so I will take up your suggestion about removing coats, Chair.

I thought we were going to have a punch-up!

I have to say that the SPS agreement, for me, is one of the most important things that I have been working on. For the last few years, it has been very clear that so many businesses have had difficulties. We have many really good food businesses in Wales and across the UK. I was very struck on the evening of the announcement of the agreement. I was talking to some people from the Welsh whisky association, who told me that they could not even get samples into the EU for people to try. It is very hard for businesses, if they cannot even do that, to get opportunities to get stuff to market. We all have examples of premium producers who, basically, have lost their businesses because it was so difficult. This is quite a complicated set of negotiations that will have to be undergone over the next couple of years as we go into the fine detail, but it was a really important step forward. Some Welsh fishers have been almost pushed out of business as well. It is easy for us to sit here and say that there is an opportunity, when you have lost your livelihood. In some cases, people will not be able to pick those things up again, but at least the thing that has stopped people from being able to do stuff is now beginning to be redressed, which does give us hope for the future. It is a time of considerable opportunity. More than 90% of Welsh lamb exports go to the European Union. It will save about £190 million in costs and red tape. In terms of the cockles and mussels that I have just been referring to, we can make good progress there.

We heard in a previous session that the deal was welcomed by the Farmers’ Union of Wales, which recognised that it would make a difference, so that is great. We want our Welsh exports to go far and wide.

Given the Centre for Inclusive Trade Policy’s findings that Wales and Scotland are particularly vulnerable to increased competition from Australian and New Zealand sheep meat imports under current free trade agreements, what specific actions are the UK Government undertaking to safeguard Welsh agriculture—and particularly the lamb and sheep sectors—from any impacts from these imports?

That is a really important question. Many of us were critical of the way in which some of those trade agreements were negotiated by the previous Government, but it is important to note that the quotas being used at the moment are relatively low; we will be watching this very closely to make sure that, if we begin to see significant changes, we respond accordingly. I am told that 14% of Australia’s annual beef quota is currently used, and 25% of its sheep quota. Although it depends on international trade patterns and geopolitical circumstances, I am confident at the moment that Welsh farmers will be competitive and that we can look forward positively, but, as I say, I do not take that for granted in any sense. If we begin to find that that changes, we will begin to look at what we can do to respond. I might bring in my colleague here, who is much more expert on trade issues than I am, if that would be helpful at all. Would you be able to add anything?

Prynhawn da. Good afternoon. The agreements with Australia and New Zealand have quota volumes that we monitor very closely, and we share that information with our farming stakeholders on a regular basis to be quite transparent about the volumes that are coming in. There are also product-specific safeguards in the deals, but it has to be a mixture of looking at the transparency of what is coming in, but also making sure that, at the same time, we are providing opportunity for our sectors. It has to be not just about guarding and protecting our market, but also about providing opportunities and confidence for export. We are looking to secure the SPS agreement with the EU, as well as working with our overseas attachés and with Welsh businesses and sectors to increase our exports. We work quite closely with the Welsh Government on that to broaden market access opportunities, hosting St David’s Day events around the world to increase exposure to Welsh production. All our attachés from around the world came to Wales last autumn to visit several farms and Welsh brands to raise awareness of the network and the opportunity to export and increase the market. It has to be that we offer the combination of both—looking at what is coming in, but also providing the opportunity.

The main concern is that it is not a fair playing field, with imports coming in with different standards to those for the production of meat in Wales and in the UK. You mentioned that you are monitoring it and that you will use levers. Are you aware of what those levers are if the situation changes dramatically?

Yes. If I can give you an example, New Zealand will get new access after the first 15 years of this agreement only once its existing quota has reached 90% utilisation. We are a long way from that at the moment. As I say, it does depend on the geopolitical situation at the moment, because, if New Zealand was suddenly looking for other markets, things could change. We think that we can manage things at the moment, but I do take the points. The issue around standards in general is, of course, a very topical one. Anything that we take into this country has to meet our safety standards, but we do recognise that different animal welfare standards are applied in different countries. I have to say that New Zealand’s standards are very high, so that is not an issue.

I wanted to touch on the Indian and US trade deals. What actions were taken to promote Welsh agriculture in the implementation and negotiation of those deals?

With all these arrangements, we seek input from the devolved Administrations to get a sense of what it is that they are looking for. I am not an experienced international trade person, and so I might look to my colleague, but my sense is that the way in which international trade deals are negotiated at the moment is rather different from that in the past. In a sense, it is fair to say that they are now very fast moving, which does make this all rather more complicated. Basically, we seek to get a sense from the devolved Administrations, including the Welsh Government, as to what they are looking for and what their main concerns would be. Frankly, to get some of these deals at the moment requires our negotiators to be a very fleet of foot. I am asked, almost on an hourly basis sometimes, about whether this or that is not acceptable. From what I have seen, I would say that the deals with both India and the USA do not pose problems for Welsh producers at the moment, but I will defer again to my colleague, who knows the finer detail.

You talked about trade deals in the past and a different way of doing things. Has there been a sea change in Government as a result of lessons learned from the Australian and New Zealand trade deals? You touched on it with my colleagues, but I was wondering in terms of those negotiations.

There are two things going on here. First, we are a different Government from the previous one. When we came into Government, we were very mindful of the issues around standards for farmers, so we made a clear commitment on that. What has also clearly changed is the geopolitical situation. I have to say that the Indian trade deal was an extraordinary achievement, because it had been mooted for many years and was difficult. That was a great success. Negotiating with America is different at the moment, but, again, that was quite an achievement in a very fast-moving, changing situation. Again, my colleague may be able to add a bit more detail around the finer points for Wales.

I appreciate that. I would just like to push a little further in terms of relying on officials. I appreciate the sea change and the change in Government. Perhaps this moves on in terms of the question, but I was just wondering what changes there have been in respect of Government Departments and officials in terms of looking at these negotiations and making sure that there is safeguarding.

What I can absolutely assure you of is that officials come back to Ministers very frequently, by which I mean literally many times in a day sometimes. There is ministerial oversight and accountability here. In terms of the detail, perhaps you could say a little more.

In terms of the way in which we undertake the negotiations, my trade negotiating teams are very much embedded and working closely with their Department for Business and Trade colleagues. We have a cross‑Government negotiating team that goes out and does these agreements. We lead on the sanitary and phytosanitary negotiations directly in all these agreements, so we are talking about standards directly with the other country every time. We also lead on matters of animal welfare, and we work between Ministers and colleagues in the Department for Business and Trade to agree the mandate for market access negotiations together for agri-food products. It is a very close working relationship, and we absolutely work as a team together, off the same mandate, to go and deliver those issues. You mentioned the India agreement. Just to pull out a couple of the Welsh aspects, as we were moving towards the deal we were talking to Welsh stakeholders and the Welsh Government through our regular engagement with the Welsh Government on trade negotiations. The deal reduces tariffs on a number of items such as whisky, lamb, gin and chocolate, which we spoke to the Welsh Government about as being priorities for what we wish to land in the Indian deal. We have to look at and trade that off against where the opposite side looks to get other trade-offs with us in the negotiation. Sometimes we will not get everything we want through that. That is something that Ministers work on very closely with their colleagues in the Department for Business and Trade and we discuss with them. That means we might not get liberalisation in some sectors as a result. An example of where we did not allow further access to our market in the India deal would be something like chicken and eggs, which is also of interest to our primary sectors. There are always compromises to do. Ministers decide those between them, and then we go and enact those in the negotiations.

I just wanted to do a brief follow-up on the question that I asked previously. The stakeholders at our last meeting stated that they supported the EFRA Committee’s recommendation about delaying the implementation of the BPR and APR reliefs until April 2027. Do the UK Government accept that recommendation or is that being considered?

Government Departments always look closely at reports from Select Committees, but that is a decision for Treasury.

Thank you, Minister, for coming before us this afternoon. Very briefly, I just want to follow up on the US and India trade deals and the matter of quotas. I appreciate that the tariff rate quotas agreed are significantly less than the ones agreed under both the New Zealand and Australian trade agreements. One thing that I have not been clear on is whether there is any review mechanism written into the agreements. In five years’ time, for example, the American parties might want to re-look at those TRQs. I was just wondering whether that is something that has come to your notice or attention.

You may be testing my detailed knowledge of that trade deal. Again, I will either have to write to you or, if possible, my colleague may know off the top of her head.

I do not know about the review mechanism off the top of my head. Because it is a framework deal at the start, it contains the standard mechanisms of review that we have in an FTA.

That is useful, thank you. I will now move on to a different topic, Minister. That is to do with the Barnettisation of agricultural funding for Wales. In a previous session of this inquiry, farming groups and stakeholders appeared before the Committee and they shared some concerns about applying the Barnett formula to any future uplift in agricultural funding. In particular, they argued that doing so might see Wales’ share of funding fall from 8.9%, as it is currently, to just 5%, which is more in line with what the Barnett formula provides. Would you consider this to be a fair reflection of the consequences of applying the Barnett formula to all future uplifts?

I understand the point that those who gave the evidence are making. We are moving to Barnettisation. I made this point in answer to a question in the Chamber at EFRA questions a few weeks ago. We believe it is better for the Welsh Government to be able to make these decisions. As a consequence of the settlements, Wales will be getting at least 20% more per person than equivalent UK Government spending in the rest of the UK. Barnettisation is the way we will be going.

I appreciate that. Of course, the 20% refers to all public spending in Wales. I am sure you would agree that does not really reflect the relative importance of agriculture to Wales.

It is quite important in terms of devolution that we hand these issues over to the Welsh Government, so people in Wales can make the decision.

I have one final question, if I may. Forgive me, Minister—you might have heard me make these arguments in the last Parliament. There is an opportunity for greater co-operation between the UK Government and the devolved nations when it comes to issues of budget. As part of this inquiry, we have had submissions pointing out that in the last Parliament overall spending on agriculture was flat. The impact of inflation has meant that in real terms the value of that budget has reduced significantly. It was once debated in this place that perhaps four Governments could work to agree common frameworks when it came to budgets, which would mean not only that they could set five-to-seven-year budgets rather than the current situation, but perhaps strengthen the case for agriculture in the inevitable competition with other Departments. Could I invite you to comment on that?

You are tempting me into territory where I have got in trouble before. I do not intend to go there other than to say—it perhaps goes back to the point about blood on the floor—that you should not underestimate our determination to get good outcomes for this sector with Treasury. There are different ways of doing it. I am very determined that we get the resources that people need, but, going back to the earlier point, I do not want a situation where the agricultural sector is always somehow dependent on the next financial decision, spending review or Budget. Other sectors of the economy are not as dependent as that. The feedback that I have had from a lot of people is that, “If we could get a decent return for the work we do, that would be a healthier position for us to be in”. It is hard for the industry to go from being supported, quite frankly, through the CAP to a different position. Transition is never easy, but I genuinely think we could end up in a much healthier situation in a few years’ time, particularly if we can address that issue of where the money in the food supply chain goes. It is the biggest manufacturing sector. It is £140 billion-plus. How much goes to farming? It is £14 billion. There are opportunities for us to get a better deal for farmers. This is partly the work that Minette Batters is doing. If we can land that, that would be quite a big prize for everybody in Wales and the rest of the United Kingdom.

As chair of the Food Strategy Advisory Board, how are you working to ensure that Welsh agriculture is meaningfully represented in the development of the UK’s national strategy, particularly considering the national Welsh sheep flock being at its lowest level since 2011?

There may be two questions in there. One is around livestock numbers. I am very mindful—this point has been made to me, both in Wales and in England—that the stratification system means you do need the right balance. In your previous discussion, Aled Jones made the point that the sheep system is complicated, with the mix of highland and lowland. Whilst there are environmental issues, it is also important to make sure that we have the right mix to allow the sector to be viable going into the future. In terms of the Food Strategy Advisory Board—now you have really started me because I am really excited about this—yesterday I launched the food strategy, which is very mindful of the work that has been done before. In Wales, Scotland and Northern Ireland, in a way unlike England, there has been a lot of good work done on this. That has informed a lot of our thinking. The Food Strategy Advisory Board is not a representative group. It is there to try to make this stuff happen. We know what the challenges are. Having said that England did not do this, Henry Dimbleby’s food strategy was an analysis of what was happening right across the United Kingdom. We are picking up the work that Henry Dimbleby and others did a few years ago and trying to address those issues around the junk food cycle, as Henry described it. Our goal—it is a really brilliant ambition—is to move from the junk food cycle to the good food cycle. Wales will have a key part to play in that. There is a lot we can learn from the work that has been done in Wales.

This follows on nicely from that. When we come to food security and the need to monitor it, do you have any targets or ways of monitoring when it comes to food security and our food security vulnerability?

We could probably have a whole session on food security alone. You will know that we are statutorily obliged to produce a food security report for the UK once every three years. We did that on time last December. Yesterday, as part of the food strategy announcement, I announced that we are intending to put in place an annual update to that, which will be an official publication done in the same way. In answer to your question, we are very mindful of food security. This will enable us and others to look much more closely at it. Resilience really matters in the modern world.

Minister, I am conscious we are running over time, but we have two more questions. Can we persuade you to stay for those?

Yes, if they are very quick.

If we could get them in in the next five minutes, that would be brilliant.

There is clearly an imbalance of power in the food supply chain between farmers and retailers. In the previous session, we heard that enhancing the powers of the Groceries Code Adjudicator could lead to stronger protections for farmers in Wales. Many farmers in my constituency have raised alleged mistreatment by supermarkets. Is the Government considering broadening the adjudicator’s remit to encompass the entire food supply chain? Would this deliver more comprehensive support for Welsh agriculture?

The Groceries Code Adjudicator does a very good job. It is a very specific job. Through the fair dealing clauses that are available to us under the Agriculture Act, we have introduced a second adjudicator, the Agricultural Supply Chain Adjudicator. That is a relatively new role, which came in on the back of the dairy regulations and is now looking at the pig sector. My view is that the two together will prove to be effective and tackle the issues that we are all aware of. In answer to your question, we have added to it. There are good reasons for that. They are slightly different roles. I think this is the right approach.

We have talked about biosecurity. I wanted to touch on bluetongue. In terms of the specific actions that the UK Government are taking to prevent the incursion of bluetongue into Wales, I understand there were two cases of bluetongue in Herefordshire about five days ago.

This is one of a number of disease threats we have. It is really difficult for people. We absolutely understand the problem. We saw it first in the Netherlands; it has come across the country. It is midge-borne. In England, we set up the control zones that certainly prevented it moving as quickly as it would have done if there had not been intervention. The problem is twofold. First, there is nothing much that we can do to stop these airborne midges moving west. They are inexorably going to reach the borders and reach into Wales over time. In England, we found that the disbenefits of the control zones were hitting farmers very hard. In fact, it began to outweigh the advantages of having the control zones. Added to that, the pressure that was being put on our facilities for testing was intense. That bought us time to get the vaccines in place. Those vaccines are now available. I absolutely appreciate that the decision for Wales is a decision for the Welsh Government. I know the Welsh Deputy First Minister has thought very hard about this. I also fully appreciate that Wales, with more livestock, has got a different set of decisions to make. I know it was a finely balanced decision, but I absolutely respect the decision of the Welsh Government to do what is best for Wales on this.

We have heard from the FUW that there has been a particular wealth of barriers, complications, logistical challenges and high costs in terms of disruption to the border as a result of the measures that the Welsh Government have taken. What conversations have you had specifically with the Welsh Government on that?

We discussed in detail with the Welsh Government and others when we were thinking about what to do in England a few months ago. Since then, we have been very mindful of the points that have been raised by a number of people about these concerns. My understanding is that a range of measures are being looked at to try to deal with some of those costs and reduce them. It is a very difficult problem. It is a very hard judgment to make. I quite understand why the Welsh Government have taken the decision that they have taken, but I suspect over time, exactly as in England, they will closely monitor what is happening. It will be for them to make those decisions, but I fully appreciate the problems that it is creating for people in border areas. It is not an easy problem to solve.

Thank you, Minister, for coming before us this afternoon. It has been really helpful to have you here before us. Thank you to Tessa Jones and Ceri Morgan as well. Thank you very much for your time.