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Millions lost to local economy as a result of poor farm gate prices

Nestled in the Ceredigion countryside are Blaenglowon Fach farm and Pantswllt farm, just outside of Talgarreg.


(l-r) Father and son team – Arwel Davies and Hywel Dafis

Nestled in the Ceredigion countryside are Blaenglowon Fach farm and Pantswllt farm, just outside of Talgarreg. The area was once thriving with milk producing Welsh farming families but due to dwindling farm gate prices and the economic downturn many have stopped farming over the years.

Still producing around 6 thousand litres of milk a day is the 320 Friesian cow milking enterprise, which stretches over 500 acres, run by father and son team Hywel Dafis (correct spelling) and Arwel Davies.

Over the last 2 years, they have seen their milk cheque being reduced by 50 percent, paying them now just 14.5 pence per litre compared to the almost 35 pence per litre their milk was fetching in 2014.

With just 8 producers left in the immediate area and each of them facing significant cuts to what they get paid for their milk, Arwel Davies estimates the loss to the local economy to be over £1 million in revenue.

“In the late 1960s there were around 50 milk producers here in the area. That has dropped down to just 8 now. Between the dairy farms here we produce approximately 12 to 13 million litres of milk each year and the money we make gets spent here in our local economy.

“The significant drop in milk price has resulted in all of us suffering financially. And with that I don’t mean just dairy farmers, but all of those local businesses who are involved in the rural economy.

“We rely on approximately 350 different companies to run our business here but we are not immune to the rollercoaster ride of the dairy market, so we have to strap

our belts tighter and get on with it.

“Of course that means spending less and will naturally filter down to all the allied industries. Overall the reduction in farm gate price means that our local economy has felt the effect of the lost income.

“So this is not just about farming; it is about the wider recognition of how #FarmingMatters, where supply chains are involved, how money circulates in the local economy, where people survive, where profits are made, communities are sustained and our culture continues to thrive,” he added.

Working on average 80 hours every week, 36-year-old Hywel said: “ I do this out of choice for the welfare of the stock and care of the land is the most important aspect for us as farmers. However, I feel at the moment the returns we get for the work is not at a sustainable level.

“We need to invest in our business but the way things are at the moment that is just not possible. Family farms across Wales know how to tighten their belt but I am sure you will not find anybody else who takes a paycut like this in many other sectors. No spare money means no investment and if you stand still you actually go backwards.

“And of course, you take the rise with the fall. I am confident better times will come and that we can compete with any region worldwide in terms of cost of production with excellent produce from grass based systems.”

The average 2015-16 net Welsh farm income was just £13,000, putting farmers around £2,000 below the approximate annual minimum wage.

“We cannot underestimate the importance of recognising that farming matters and how much of an impact it has on the rural economy. We need to nurture our farming sector to ensure that money keeps flowing through the rural economy and through that we protect and improve domestic food security. Look at these farming incomes, the hours our farmers put in every day, every week; they are producing wonderful food that we all enjoy and their input to the local rural economy can not be underestimated,” said FUW President Glyn Roberts.

“This is why we are reminding those in power that in the absence of moves which ensure markets provide sufficient income for farm businesses, that it is essential that support is maintained for sectors at levels which do not compromise either family farms or rural economies.

“Agriculture and domestic food production has to be given priority during all trade negotiations with other countries and trading blocks so that we can ensure food security for our home markets.

“Therefore we repeatedly insist that the procurement of Welsh and British produce is the default position for all public sector bodies amongst other measures.

“In addition, robust steps must be taken to ensure supermarkets and other private sector bodies support domestic producers and do not act in a way which undermines UK food production or the viability of our agricultural sectors,” he added.

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