Our dairy industry is facing real challenges.
For several years there has been volatility in the farmgate milk price and a general increase in the cost of production, such that the margin on milk has been small and variable. This situation has led to a lack of confidence, resulting in low investment in farm infrastructure and in business expansion.
That said, the long-term future for dairy remains positive. Welsh dairy farmers are efficient, they are able to grow high yields of good quality forage. They keep cows of high genetic merit and with good health, and have access to land, milking facilities and capital. International demand for dairy products is strong, and we are well-placed in Wales with our climate and geography to help meet the needs of a growing world population – but we have to get better at adding value to our milk, and be less dependent on the half of what we produce that goes into the liquid market.
Alongside my Dairy Task Force I am exploring how resilience can be increased in the Welsh dairy supply chain. At the Welsh Dairy Show in Carmarthen I announced an independent review of the dairy sector in Wales. The review, which will report at the end of this month, will set out a long-term strategy for the sector, and detail how we can best use the next Rural Development Programme – the largest in Wales’ history – to increase professionalism and profitability in the dairy sector in Wales.
I am also considering how we may increase processing capacity in Wales, alongside a range of other measures relating to product development and marketing, which will be of benefit to our dairy farmers.
Elsewhere, I have published an action plan to help new entrants into agriculture, and I have set out actions to support the development and retention of skills in the sector.
The prices our dairy farmers are able to secure for their milk is subject to the pressures of international markets. The Russian ban on imports from EU Member States, for example, has had a knock-on effect on Welsh farmers, despite the fact that we do not export dairy products to Russia. For that reason, it is important that Welsh farmers have a strong voice in international discussions. I have recently returned from a meeting of the EU Council of Ministers in Brussels where I was part of the UK delegation, ensuring that Welsh farmers’ interests are promoted and protected.
The farming industry in Wales faces challenges, but there are also huge opportunities. I am convinced that the industry is ready and willing to face those challenges and embrace the opportunities – and it does so in partnership and with the full support of this Government.
Rebecca Evans AM is Deputy Minister for Farming and Food and Assembly Member for Mid and West Wales