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How has the Covid-19 Pandemic Affected Wales’ Rural Businesses?

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Few areas of the Welsh economy have escaped the effects of the coronavirus pandemic, and the rural economy is no exception.

Farms have experienced a turbulent period as the food services sector – pubs, restaurants and cafes – have closed down. Farmgate prices for livestock crashed in March, and some dairy farms had to pour their milk down the drain as contracts were cancelled.

While supermarket sales of some types of meat such as mince and diced beef have gone up, the sale of steaks and roasting joints to the restaurant trade has collapsed, leaving producers unable to shift large parts of the animals' carcases. Wales' meat promotion body Hybu Cig Cymru (HCC) has responded by launching a campaign aimed at getting consumers to buy other cuts of meat to rebalance sales.

The problems are compounded by the fact that farms are unable to access some of the business support schemes set up by the Welsh and UK Governments. With livestock needing daily attention, for example, they cannot furlough staff. NFU Cymru has asked the Welsh Government to extend the Economic Resilience Fund to farms, and the Welsh Government has set up a group involving dairy industry stakeholders to work out solutions for the sector.

Business involved in tourism – and that includes many farms as well as bed and breakfasts, camp sites, rural attractions, pubs and shops – have seen their incomes fall or been forced to close as non-essential travel has been curbed. People have been discouraged from visiting the countryside except in small household groups – and many farmers, themselves often elderly, have added to the discouragement for fear of having coronavirus-carrying walkers stray close to their farmhouses.

Many rural communities were struggling to get over the effects of the winter floods when the coronavirus struck. Those involved in tourism should have been looking forward to an income boost from the Easter holiday – especially the with good weather it brought with it.

Organisations that represent rural businesses, from the farming unions, NFU Cymru and FUW, to the Country Land and Business Association (CLA), have been keen to make sure that the Welsh and UK governments’ support measures for business cover everyone in the rural economy too. Rural businesses are overwhelmingly small and medium sized enterprises or sole traders.

At least farms and food producers can continue working, their vital role in feeding the nation recognised. The CLA successfully lobbied for farmers and food producers to be classified as key workers, entitling them to additional support such as childcare.

Livestock auctions have also remained open, but only for the sale of cull and store animals; dairy and breeding stock cannot be sold. The numbers attending has been restricted to ensure proper social distancing is maintained.

So it’s a mixed picture across the rural economy, with some businesses suffering harshly from effects of the lockdown, while others are working almost as normal.

FUW President Glyn Roberts said:

The pandemic has seen a seismic shift in supply chains and consumer buying patterns.  The closure of the food service sector has had a significant impact on both the red meat and dairy sectors. The increased demand for mince, rather than cuts such as roasting joints, has caused a loss of the carcase balance, while many dairy farmers have had their price cut, some are facing delayed payments and others had no choice but to dispose of their milk.

As a union we have been encouraging consumers to bring the restaurant experience home; with afternoon teas and family roasts. As part of our work in this area we have written to UK Secretary of State George Eustice, Welsh Government Minister Lesley Griffiths and to major supermarkets highlighting particular concerns regarding the need to protect UK food security and primary producers.

Other concerns include the impact of the coronavirus on TB testing, livestock markets and medicine availability.  Whilst the FUW has welcomed a range of emergency measures announced by the Welsh Government in relation to the Basic Payment and Glastir Schemes, the industry is in urgent need of a wider-range of interventions, including forms of direct support for those suffering significant price drops, tax concessions and other possible measures that protect the viability of those businesses that feed our nation.

NFU Cymru President John Davies said:

There can be no doubt that recent weeks have highlighted the central role that food producers play in the everyday lives of each and every one of us. The complexity and vulnerability of our food supply chains has also been brought into sharp focus. NFU Cymru is doing everything possible to ensure primary producers are able to continue producing food and that supermarket shelves remain stocked.

However, with the severe disruptions in the supply chain which have followed a very difficult winter, we are starting to see impacts to cashflow across a range of farming sectors, with the resilience of many farm businesses now being challenged.  Farm diversification activities have also been hard hit by COVID-19 impacts.

There is significant price volatility being experienced in a number of agricultural markets, which is putting businesses at risk. Sectors such as dairy, red meat, poultry and potatoes have been particularly affected by the sudden, massive drop in demand from the food service/hospitality sector, which has left supply chains now struggling to re-align themselves to retail-led demand.  There are a number of other business concerns facing farmers due to the coronavirus pandemic, including public rights of way and access to labour to name a few.

The farming sector stands ready to do all it can to keep the nation fed during this time of crisis.