Ahead of the UK Government’s Autumn Budget, the Farmers’ Union of Wales (FUW) has welcomed a new report from the UK Parliament’s Welsh Affairs Committee, which criticises the UK Government for its “complacency” in overlooking the long-term impact of its policies on the sustainability of Welsh agriculture.

In March 2025, the Committee launched an inquiry into the future of farming in Wales, seeking evidence from the FUW and other Welsh farming organisations on the challenges and opportunities facing Welsh agriculture, alongside the impact of UK Government policy on the sector.

In its final report, published this week, the Committee points to the unique context of agriculture in Wales, which occupies over 90% of Wales’ land area, and which employs 11% of the UK’s total agricultural workforce despite containing less than 5% of its total population. However, despite contributing to a food and drink sector worth over £9.3 billion to the Welsh economy, Welsh farming has been suffering from a declining workforce, declining livestock numbers, and lower incomes than elsewhere in the UK. The Committee identifies a sector that“is resilient but under heavy strain” , in a UK policy context that“too often overlooks the distinct nature of farming in Wales.”

The report pays particular attention to the UK Government’s proposed inheritance tax (IHT) reforms, expressing concern over the lack of clarity regarding their potential impact on Welsh farming. Committee members warn that the changes could disproportionately affect elderly farmers and those with terminal illnesses who have structured their affairs in line with existing tax advice. Without further guidance, these individuals risk leaving their families facing unexpected and significant tax burdens upon their death.

The Committee accuses UK Ministers of complacency in failing to conduct any assessment of the impact the changes would have on Welsh farming, creating“an unnecessary climate of uncertainty and confusion… in an industry central to the cultural, environmental and economic fabric of rural Wales”, and calls on the Government to delay implementation of IHT reforms until a Wales-specific Impact Assessment has been conducted.

The Committee also took evidence from the FUW regarding the UK Government’s decision to ‘Barnettise’ Welsh agricultural funding; a move that removes the multiannual ring-fence around farm support and merges it into the broader Welsh Government Block Grant. In its oral evidence, the FUW warned that this approach fails to reflect the specific needs of Welsh agriculture and effectively amounts to a real-terms funding cut for the sector. The Committee’s report urges the Treasury and the Wales Office to work closely with the Welsh Government to ensure that this change does not lead to a reduction or deprioritisation of support for Welsh farmers.

The report also highlights the disproportionate impact of liberalised free trade agreements with Australia and New Zealand on Welsh farming, and raises concerns about potential effects from ongoing trade negotiations with other countries. It emphasises the need for a long-term vision for Welsh agriculture that creates clear pathways for young farmers and new entrants, reflecting the recommendations set out in the FUW’sMandate for Future Farmersreport. The report also calls for greater focus on food security and the promotion of economically sustainable farming practices across Wales.

Committee-members urge the UK Government to“take specific account of the unique cultural, environmental and economic circumstances of farming in Wales when making future policy decisions which have direct implications for the agricultural sector in Wales .” They recommend that any future policy decisions affecting Welsh agriculture“be accompanied by a Wales-specific impact assessment led by the Wales Office”.

Commenting on the Committee’s findings, FUW President, Ian Rickman said: “This report sends a clear and timely message to the UK Government that Welsh farming cannot continue to be treated as an afterthought in Whitehall. The Committee has rightly recognised the unique nature of agriculture in Wales; its scale, its contribution to our economy, and its vital role in sustaining our rural communities. Yet too often, UK policy fails to take those distinct circumstances into account.

"The proposed inheritance tax changes and the ‘Barnettisation’ of agricultural funding both risk undermining the long-term sustainability of Welsh family farms at a time when the industry is already under a perfect storm of rising costs, volatile markets and future uncertainty.

"As we approach the Autumn Budget, the Chancellor must take these findings seriously and ensure that future decisions genuinely protect our family farms, strengthen food security, and secure a sustainable future for Welsh agriculture.

“We thank Members of the Welsh Affairs Committee for providing an accurate and well-balanced report on the current situation of Welsh farming, and for highlighting the urgent need for the unique characteristics of rural Wales to receive certain consideration when policy decisions are made.”