Coronavirus is Another Blow to Wales’ Rural Economy

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CLA Director, Nigel Hollett reflects on the impact of the pandemic on the Welsh rural economy, recovering from flooding and undergoing transformation to the post-Brexit reality.

 

The hospitality sector’s primary food producers are struggling. Hotels, restaurants and café-chains – a stable and previously underestimated market – have ceased trading. The retail food and drink supply-chain is seeing dramatic market fluctuations. The supermarkets may be open – shoppers may be queuing in the car-parks, but processors, distributors and other vital service-providers are in-turn affected by the lockdown.

Other rural businesses are being severely challenged. Today many farms have carefully-nurtured additional income-streams from small-scale holiday-lets to stabling and other amenities, to cafés, restaurants and larger-scale processing and retail subsidiaries. They were developed to assist an increasingly marginal farming industry. Many farm families today are supported by a partner bringing home another income. That income may have ceased. Some are furloughed.

Supported by the Welsh Government, our rural economy has grown a dynamic tourism and hospitality trade – now closed. Many core farm businesses are now supporting new enterprises which may have commanded high commitment. The Government must reach out to ensure these businesses do not slip through the support net.

The farming and rural business sector is intensely fragmented into thousands of farms and other businesses spread throughout Wales. But the impact of the coronavirus is placed into sharp focus by the closure of one major event – iconic to the Welsh rural economy. Events at the Royal Welsh Agricultural Showground generate some £40 million for the Mid Wales economy alone.

Some £700 million has been made available to support the Welsh economy.

We, at the CLA, have been urging rural businesses to make sure they’re accessing this vital lifeline. Farming may be open for business. But the Welsh Government was quick to introduce Emergency Measures. Welsh dairy and meat producers have experienced alarming market-fluctuations. In the absence of the hospitality trade, the supply chain – itself impaired by lockdown- is squeezed into an unpredictable retail market. And for many the damage of the February and March floods is yet to be repaired.

It’s easy to think of the crisis as an urban phenomenon. Many farms and rural businesses may be self-isolating by nature, but in Wales many are run by older people, or family units, in a close-knit business network. There’s no HR department here to mobilise substitute workers, and vital service-providers: the vet, TB-tester, farrier, feed-merchant – they’re all vulnerable to communicable disease and the Welsh Government has taken action to restrict public access to popular footpaths.

True-enough, bolstered by broadband and mobile-phone technology, the Welsh rural economy has  become diversified and sophisticated. But a critical lesson delivered by the crisis has been to demonstrate the importance of food-security – at higher levels of self-sufficiency. Since 2016 Welsh farming’s been gearing-up for the greatest structural change for nearly three generations and there is no doubt the Covid 19 crisis will have a massive bearing on the Brexit 20 solution.