The Farmers’ Union of Wales (FUW) has raised serious concerns over the potential for a significant reduction in agricultural cash for Wales after the recent Budget.

Chancellor Rachel Reeves announced changes in how funding for agriculture is allocated to devolved nations, switching to the Barnett formula rather than the separate, protected allocation that was previously in place.

Historically, agricultural funding was distributed using the EU’s Common Agricultural Policy (CAP) formula, which considered rural and farming criteria such as the size, type, and number of farms. Under this system, Wales received 9.4% of the UK’s total agricultural funding.

The FUW has warned that the new approach, which bases funding on population rather than agricultural characteristics, could cut Wales’ share of agricultural funding to just 5% - a drop of around 40%.

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FUW President Ian Rickman has written to the Secretary of State for Wales to demand clarity on the changes. He highlighted that such a shift could have a devastating impact on Welsh farmers and rural communities.

While the Budget provides an additional £1.7 billion to Wales, this funding is earmarked for sectors such as education, housing, health, and transport, leaving agricultural funding in a precarious position.

Ian Rickman, FUW President said: “While the Welsh Government will ultimately have the final word on the Welsh agriculture budget, Barnettisation, or any reduction in Wales’ agricultural funding by the Treasury will further undermine the industry - and fail to reflect inflation and the plethora of public goods farmers are increasingly expected to deliver.

"We’ve already experienced the anger, frustration and fear within the agricultural sector following the UK Government’s lack of clarity regarding the changes to the Agricultural Property Relief (APR) and Inheritance Tax.

"This continued lack of clarity regarding the funding being made available to Wales and the devolved nations is a further concern for an industry already on its knees, and I do hope the UK Government will be able to provide urgent clarity on these matters."