Farming in Wales in 2025: Challenges and Opportunities

Status / emerging findings

• Farm incomes in Wales fell 40% in real terms; upland sheep and beef farms average £22,000 annually—below minimum wage and acknowledged by government as non-viable without external support.
• Committee found government 'complacent' on inheritance tax impact: Treasury claims 500 UK estates affected, but farmer unions estimate 74–92% of Welsh farms could pay more tax from April 2026; government refused Wales-specific impact assessment before implementation.
• Government announced December 2025 compromise: APR/BPR relief threshold raised from £1m to £2.5m per person (£5m per couple), reducing predicted affected estates from 375 to 185 UK-wide, but committee still calls this insufficient without detailed Wales analysis.
• Livestock numbers declining sharply; Wales exports 75% of agricultural output to EU, making post-Brexit trade deals and SPS agreements critical to survival but secondary to government priorities.
• Government response to 7 recommendations (Jan 2026): accepted principle of supporting farming but rejected delay to inheritance tax implementation and declined to provide Wales-specific data; relied on modernizing HMRC systems as future solution.

Why it matters

Welsh farming underpins rural employment, food security, community viability, and Welsh language preservation—but government tax and trade policies set in Westminster are driving the sector toward collapse without tailored assessment or long-term strategy.

Tone arc

Opened procedural and technical (June: farming groups presenting crisis evidence); hardened to critical after July government session when Minister defended aggregate UK figures without committing to Wales analysis; closed firm on inheritance tax disappointment and systemic governance failure in November report.

Key witnesses

Daniel Zeichner, UK Agriculture Minister (DEFRA), NFU Cymru, Farmers' Union of Wales, Wales Young Farmers, Family Business UK, Welsh Government (Deputy First Minister and Cabinet Secretary for Climate Change and Rural Affairs)