Ahead of this month’s UK Government Budget, the Farmers’ Union of Wales continues to hold serious concerns over the decision to “Barnettise” Welsh agricultural funding from 2025–26 onwards. The move, announced in the Autumn 2024 Budget, represents a fundamental shift in how rural Wales will be supported in the years ahead - and one that risks long-term harm to the family farms that underpin the rural economy.

Under previous arrangements, agricultural funding was allocated according to need. During the UK’s membership of the EU, the Common Agricultural Policy distributed funds based on farming characteristics such as the size, number, and type of holdings. This system recognised the distinct nature of Welsh agriculture, resulting in Wales receiving around 9.4% of the UK’s total agricultural budget.

That principle has now been abandoned. By absorbing agricultural support into the Welsh Government’s block grant and applying the population-based Barnett Formula to future changes, the Treasury has tied Welsh funding to headcount rather than need. In practice, this will reduce Wales’ share of any proportional changes to the UK agriculture budget from around 9% to around 5%. The decision marks a clear departure from a system that accounted for the realities of farming and rural life.

The Farmers’ Union of Wales has consistently warned that the change risks cutting future support for Welsh agriculture and widening disparities between the devolved nations. The First Minister of Wales, Eluned Morgan MS, has also described the reforms as a matter of “huge concern”, highlighting the potential for serious long-term consequences.

With family farms already facing mounting pressures from volatile markets, climatic challenges, and shifting policy priorities, the timing of this change could not be worse. A fair, transparent, and needs-based system is essential if Welsh agriculture is to remain resilient, productive, and sustainable.

Ahead of the Budget, the FUW is urging the UK Government to revisit the decision and reinstate a funding model that reflects the distinct nature of Welsh farming. The FUW is also calling for a review of proposed reforms to Agricultural Property Relief (APR), warning that these could further undermine farm succession and investment.

Welsh farming has always been about more than food production; it sustains jobs, communities, and landscapes. A funding formula that fails to recognise that reality risks weakening the foundation of rural Wales for generations to come.