Farmers in Wales handed new payment system

media captionSome say the changes could lead to more expensive food.

Farmers will fall into one of three new payment strands as part of a radical change to the financial support they receive to help them produce food.

Payments which come from the EU's Common Agricultural Policy (CAP) are due to fall and farmers are predicting tough times ahead.

Natural Resources Minister Alun Davies revealed payment details on Tuesday.

But unions described the announcement as a "major hit" for many farmers.

Outlining the plans for the three-tier payments, Mr Davies said farmers will receive £16.50 per hectare for moorland over 400 metres above sea level.

Exceptional circumstances

Farmers with severely disadvantaged land will get £166 per hectare (2.47 acres) and almost £200 per hectare will be paid for low lands.

There will be a transition period for the new payment scheme over five years until 2019.

"My decisions are aimed at placing the Welsh farming industry in the best possible position to face the future with confidence," said Mr Davies.

"They will result in an industry that can make the most of new opportunities, increase productivity, and is better placed to cope with exceptional circumstances, such as the harsh weather experienced last spring.

"The new arrangements will also lead to a fairer and more transparent distribution of funding, with a move away from historic payments, and will help ensure we use and safeguard our natural resources more effectively."

'Every tool'

Last year it was announced that direct farm payments for Wales would be around €2,245m (£1,870m) over 2014-2020, with €355m (£296m) allocated for rural development schemes.

But the budgets for both are being reduced by 12.6% and 5.5% respectively after allowing for expected inflation.

And there are also plans to use 15% of money for rural development projects rather than direct payment to farmers.

The Farmers' Union of Wales called on the Welsh government to use "every tool in the box" to minimise the impact for farmers who will lose out.

President Emyr Jones said: "While we have repeatedly expressed concerns about the amount of preparatory work done to investigate payment systems which would reduce the impact of a new payment system, it has to be accepted that whatever system was implemented would have led to large numbers of businesses losing significant sums."

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