Economy, Trade, and Rural Affairs Committee

Could I ask the two witnesses to introduce themselves formally, please?

Diolch, Cadeirydd. Lovely to be here with you. Huw Irranca-Davies, Deputy First Minister and Cabinet Secretary for Climate Change and Rural Affairs, and, of course, the sponsoring Minister for Hybu Cig Cymru. Gian Marco.

Diolch, Cadeirydd. Gian Marco Currado, rural affairs director, Welsh Government.

Thank you, both. The meeting will take about an hour of evidence from you. All Members will ask you various questions—I'm sure you're familiar with the format. I'll begin the ball rolling, if I may: has HCC delivered on its remit, Minister?

'Yes' would be my direct answer to that, because of the evidence that I've seen of their work on the ground and their performance against key performance indicators as well. Their focus has to be on delivering for the red meat sector in Wales. In all my meetings with them since I've come into post, which is now just over a year, and regular meetings—. I think, within the framework agreement, I am required to meet with them once a year—something like that—as a minimum. I probably meet with them at least on a quarterly, on a termly, basis, and as required. In all of those meetings, we discuss performance, we look at the KPIs. I also keep an eye on them when I work, when I attend their events as well, such as their annual conferences or their events in the Royal Welsh Show, or the winter show as well. And I look at how they're reporting to members on that, because that's a key part of their work as well—so, not just doing good work, but actually telling the members and engaging with the members as well. The other thing to say is, on top of all that, my officials at a senior level lead, on a quarterly basis, regular meetings with HCC as well. For those people who don't understand the nature of HCC and our relationship, they are, of course, a levy-funded board, but they work with the grain of Welsh policy framework as well. It's important, then, that my officials also meet with them. I don't know if you want some reflections from Gian Marco.

No. You've given us a taste of the comprehensive meetings, and I'm grateful for that, and that comes over in the evidence paper that you have submitted to the committee. But it's well documented that there have been turbulent times for the last 18 months, two years, with HCC and that's bound to have had an impact on its delivery. No-one can lose that number of staff and have that level of disruption without having an impact on performance. So, it's surprising to hear that you're confident and happy with the delivery over that period. So, what has the Government been doing to address those concerns and, ultimately, strengthen HCC, which is, obviously, a wholly owned Welsh Government company?

The point I definitely agree with you, Chair, is on the fact that they've been through quite disruptive times over the last 18 months, dealing with internal issues. That has to have an effect on an organisation in terms of the way the organisation works, and it has to then really focus laser-like on its performance, on its KPIs, on its outputs for the levy payers and for the red meat sector. But what I can tell you is—and that's the point of difference, I would say—when you said that cannot but have an effect on it, all the evidence that we have, all the engagement that we've had, all the meetings that I've had, where I've constantly pushed this, to say, 'With all of that going on, are you delivering against your KPIs? Are you delivering the performance that is needed?', there has been a relentless focus from the chair, and now with the new chief executive in post as well, on delivering on that. So, we haven't seen a dip in performance, we haven't seen them take their eye off the ball. They've been at the trade shows, they've been doing the promotion of Welsh upland hill lamb, and so on—and very successfully as well, I have to say.

So, you're telling me here today that they're delivering on their KPIs. But the evidence that we've taken from the farming unions and from the processors—. One processor submitting evidence to say that they'd never had a visit from HCC in this turbulent time, shall we call the last two years. So, why the disconnect between what we've heard as a committee from the processors, and the farming unions in particular, when the new levy rise was introduced, to the impression you're giving here today, that they are delivering on their KPIs and, actually, everything's quite rosy in the garden?

Oh, that's not what I'm saying, and please don't put—. I know you wouldn't want to, but don't put words directly into my mouth. What I'm saying is, from a sponsor and Minister's perspective, we've kept a relentless focus on are they delivering, is their performance there, are they doing the major streams of marketing, promotion on behalf of the levy payers, are they attending the events and so on. But if you're picking up, from stakeholders and levy payers, 'Well, they're not at this point or at that point', that has to be recognised by HCC, that they need to do more, then, within that space, responding to those things.

But I can tell you I've been at the events where they've been at—the Royal Welsh Show—where they've had not just levy payer events to engage with levy payers, in the breadth, including processors, but also the wider public as well, because that is part of it as well, explaining what they do to the public. But they've also been on those specific missions to promote, for example—. I could go through it. The involvement they've had with the Dubai embassy highlighting Welsh lamb, promoting Welsh lamb in the United Arab Emirates and Saudi Arabia—I can go through a whole list of them. But if you're saying to me, 'Is it absolutely perfect? Have they touched every base?', I don't think any organisation can genuinely say that. So, if there are areas the committee need to highlight with HCC—. And we'd be happy to take it back as well.

So, it is fair to say that the Government recognises that there has been a blow to morale, shall we say, then, in HCC, given the turbulence that's happened in the last 18 months, two years, but, looking forward, there is optimism. Because, in an ideal world, that's what this review is trying to look into, about what the future will hold, while learning the lessons from the past. And so you recognise that there has been an issue with morale, and certainly what's gone on in the last 18 months, but that situation is, in your opinion, rectified, and we can look with optimism to the future, and, obviously, the arrangements that you are trying to secure for the new mandate from 2025 to 2030.

Yes. Look, I think it would be absolutely daft to say of any organisation that has been through the high-profile issues over the last 18 months and so on, that that can't affect, internally, every member of staff. Because every member of staff looks at it. They want to have pride in HCC and the work that it's doing—and they should, absolutely—and the work that it's trying to do on behalf of levy payers and promoting our success, I have to say, in red meat within Wales. And when there is a constant underlying theme, then, of being in the press for various internal issues, that must have an effect. And this is something that we've raised regularly at every single meeting: what is morale like? How are you dealing—? But more than morale—can I just say, Chair—more than morale—. I've run organisations myself before I came into the sphere of politics. In any organisation, you also need the clear space where people can openly say things, where they can discuss things, and also where they feel, quite frankly, that the organisation is looking after them as individuals in terms of their mental health and well-being, and creating that space is where we've also focused in these meetings.

So, we've consistently said to HCC, in the midst of the turbulent times: what are you doing to ensure that staff who have concerns have those opportunities? And they've given us how they are doing that. What are you doing to make sure that people who feel under pressure from a couple of things, either under pressure because they want to express a concern or a grievance, or under pressure because the organisation they're working for and which they feel real pride in, feels like it's being battered—? Those people also need to know that they have a space that they can talk to each other and so on. So, we've kept that focus in all of our meetings with HCC. They have responded—and it didn't take me to push them to do this, quite frankly; they were doing it—putting in place those mechanisms in order to enable that safe and well-being space to come. Is it looking better, going forward? I will not be complacent enough to say everything now is completely hunky-dory, but what I can say is, with the appointment of the new board members that are in place, the new chief executive as well, José Peralta, who is very well known and, I think, very well respected as well—. He himself has a track record and a pedigree and is known to the industry. I think that is really stabilising things now, and that will have an effect on morale as well. This has to be an organisation, Chair, where the people who work within it feel really proud that they're going into an organisation doing their best on behalf of levy payers, and love the job that they're doing. And it's been a tricky 18 months, but it feels like now that it's moving into a new phase, and I think that should be welcomed.

Sam wanted a supplementary, but I'll just put my final point if I may, Sam, because you're taking the next set of questions, and I'll ask you to come to your supplementary at that point, if that's all right.

My final point to you, Minister, is that one of the points that has come over in our inquiry is, obviously, income streams, and the income stream is paid per head that is processed, there's a diminishing number of livestock units in Wales for a whole host of reasons, there are, there isn't additional money coming in from third sector operations, or not to the volume that historically would have gone into HCC. How much of a concern is it for you, as a department and as a Minister, that HCC will have the revenue streams in the future to undertake, and I use the word 'meaningful', work rather than just existing as an organisation?

Oh, yes. We utterly cannot have an organisation that is simply surviving. HCC, for the Welsh red meat sector, has to deliver real bang for the buck. So, whatever funding it has available, through the levy funding or through coming to Welsh Government in future for other strains of funding—and maybe we'll get into this a little bit there—they need to really forensically, laser-like, target where their best interventions are. And we've seen some of that already. When I was saying about their performance over the last year, I can quote chapter and verse—you probably had some of this from them—of really well-targeted interventions with the money they currently have available to make a real difference, to drive up market share in export and domestically as well, and in England, if you look at things like lamb and what they've done on the promotion there.

So, there'll always be a discussion around how much funding can they have. There's definitely been a change in the balance between levy and grant funding, and I have to say, that is a hard—. I don't want to revisit the whole thing, but a significant amount of the previous non-levy funding was rural development plan funding. We know what's happened with that. RDP funding has—. 2023 was the final year of the big tranche of it, so that's why the balance is now changing. That doesn't mean it's the end of Government involvement within HCC, because, as we go forward into the sustainable farming scheme, as we go into other essential work that we need in the farming sector that affects red meat, who's to say that HCC aren't going to come to me and Gian Marco and say, 'Gian Marco, put some advice up to the Minister because we think we're doing some good work in this area and we ought to actually be recognised for that'? We're not quite there yet, by the way, but that is what's happening. The old RDP money is now ending, but the levy funding is still there. The question is: with the new vision, with the new framework, what does the future look like for HCC?

But what I would say to the committee is, in all the evidence that you've heard, which I've looked at as well, HCC is a model, despite the turbulence over the last 18 months, that has been effective on behalf of the levy payers and also works in the grain with Welsh Government policy as well. That is what we need. There might be alternative models out there, but the question is: now, with the new vision being brought forward, what does that look like and does that draw in additional funding from Welsh Government that replaces some of the stuff that's been lost through the European funding?

Thank you, Minister. Sam.

Thank you, Chair. Just to come back on something that you said there, Cabinet Secretary, previously, to the Chair, around staff morale, it's reported that, in the last couple of years, 13 staff members in total, including board members, have left. Is that an organisation that's working well? If you're talking about this open space to be able to discuss ideas, to be able to bring forward—. Thirteen staff members leaving—does that represent an organisation that's doing that well?

Sam, I think we have to acknowledge, as I've already done, it's been through really trying times in the last 18 months, and those have been well documented and they've been out there in the public domain. So, I think: how does an organisation then rebuild and get beyond that? And I think I've reflected in my comments today that we can't be complacent, but it feels like the—. Not only the personnel that are in place—and the existing good staff, by the way, who are still there; we can't forget about them—but also the mechanisms they've put in place—. And when I talk about those, just to put some flesh on the bone for you, Sam, some of the things that they've done that we've asked for detail on—. I can't give you the whole list today, but they do include, for example, specific measures like the employee assistance programme, which is confidential counselling, support on personal and work-related matters. It also includes the staff away days and space within those for staff to raise issues, to discuss not only with managers but with other peers as well. They're doing things such as—and I don't understand all this, because it's moved on since the days when I used to run organisations, but things such as—walk and talk sessions with staff members. There are opportunities being given for all colleagues to have direct updates with the chief executive officer and with senior team as well. There are myriad now health and well-being things being put in place to offer them as well. This is a relatively small team of people, but I think those sorts of inventions are seeking to turn around the challenges that we've seen in the last 18 months.

Okay, thank you. Moving on to levy payers and value for money, you've mentioned in a previous answer as well that you believe there is value for money for levy payers and you're monitoring the KPIs, but one of the parts that we've taken is that HCC's promotional work is measured by proxy measures. They're not direct sales; they don't sell product directly. So, how do the KPIs measure with these proxy measures to ensure that there is value for money, not just for the levy payers, but that there's success in the promotion of the red meat sector in Wales?

It's a really good point because, as you say, they're not directly selling. What they're trying to do is promote, improve marketing, get market access both domestically but internationally as well. But you can see this in the proxy measures. You need to look at what these proxy measures are. So, for example, in 2024-25, HCC worked—you may have heard this in evidence, I don't know if you have, but they worked—with a leading retailer to maximise their consumer targeting, which is part of their raison d’être. They did it via loyalty cards and Sky Adsmart, and the campaign was to target—here's the tangible outcomes—specific households who had not purchased Welsh lamb brand over the previous six months there. So, the growth secured from this directly was an increase in sales of 24 per cent in Wales, 21 per cent in England. Fifty per cent of that growth was secured from consumers that had previously been purchasing from rival competitive brands outside of Wales. So, I think it's those sorts of proxy indicators that give us the confidence that they're doing the right thing.

Okay. And then you mentioned as well, in questions through the Chair, around the engagement and that there may be things that HCC can learn from this committee's scrutiny sessions as to what they can do better. But in terms of setting the remit of HCC and you as the lead Minister in that—the responsible Minister, shall we say, for HCC—what role do you have then in setting direction for HCC on these points? Trade shows overseas are all well and good, but if local producers of these products aren't seeing HCC representatives at their local marts, aren't seeing HCC, what's the tangible benefit of levy payers paying in, that they feel that they're valued within that?

And the levy payers need to hear that feedback, Sam, and if there are parts of the ecosystem out there of the agricultural and red meat sector that levy payers feel that they're not getting to, then I'm more than happy to take that back in my regular meetings with them, as will Gian Marco and their team in the quarterly meetings as well.

So, just to— Is that an informal discussion or—

No.

Do you set a remit for HCC to operate?

Yes. So, we have a framework agreement that determines the relationship as a sponsored body with us. It's quite detailed, it's already in place, but there's actually a refresh of that, so we have a new framework. We're obliged to do updates on the framework. So, we'll be bringing that up to speed. Some of it, by the way, will reflect some of the discussions coming out of the committee as well, I'm sure.

So, the updated one may actually ask them to be more present at abattoirs, more present at local livestock markets?

Yes, that's a really interesting thing, because if that's some of the feedback coming through—abattoirs or individual marketplaces and so on—that is really valuable feedback for HCC. So, above and beyond the Royal Welsh, above and beyond the meetings we have, above and beyond the trade shows and the whatever, where else should they be out there, engaging and getting the feedback from levy payers? Sorry, Gian Marco.

No, what I was going to add is that a lot of that detail is actually in the operational plan that we agree with HCC, and in effect that contains a lot of the KPIs. Some of those KPIs are around engagement and around, I guess, that face-to-face presence. It is one of the things—. So, when we have the quarterly governance meetings, which are between officials and HCC, we look at the range of KPIs, including on engagement, and one of the discussion points that we've had very recently is around that feedback that's come through from some levy payers, that perhaps they've been less visible in places like markets, et cetera. So, that is one of the things that HCC are now looking at, about how they can increase some of that visibility. I think having the new chief executive in place is really helpful. I know he's done a lot, personally, out already, out and about. I think it's fair to say, and I think you might have heard it from HCC directly, that the interim chief executive was focused largely internally, a lot, for the reasons that you've been discussing this morning. So, I think having a bit of a step change with a new CEO, who is very visible himself, I think that is all part of increasing that engagement.

The purpose of the question is to see whether there's a formalisation of you, as the sponsoring Minister, telling HCC that they need to improve engagement in x area, or whether it's a sort of suggested nudge, 'I think you might need to be doing this a little bit more', and whether anything is concrete in that relationship.

No, it's within the KPIs, so it's much more tangible than that, but it's also in the formality of the meetings. So, the meetings aren't armchair meetings; they are meetings where we come with an agenda of things that we need to do, and it could be to do with issues like critical mass within the sector, it could be to do with the processing, it could be to do with morale, and how things go, a range of things, but it'll also be to do with engagement. So, it's much more formal, and really formal within the KPIs.

Thank you. Thank you, Chair.

Okay. Just briefly, on KPIs, is it really—given that there's no public money going into HCC now, and obviously it is all levy money that is going in there—right that the Government sets the KPIs, or should it be the levy payers who set the KPIs, because obviously they're the ones who are paying the bills?

Yes, well, the KPIs are set through the operational plan, but you're right in saying that there's a change in context now to the funding. But as I've made clear in the answer to the previous question, this doesn't mean that it will necessarily be the end of funding. We need to do a couple of pieces of work before we determine what the Government support is going forward, but it won't be based on RDP any more. But I think HCC could well have compelling cases to make to Government with the SFS, but also with other aspects. It could be aspects to do with innovation, research development, things like that, that they could make a case, saying, 'Actually, we're right in there with the grain of Welsh Government thinking.'

From our perspective, I have to say, whatever model HCC has now and going forward, it's really important that they will still need to work with the grain of the policy framework that this Senedd and Welsh Government set. So, that wider thing of, you know, all the imperatives around the red meat sector, plus what we're trying to do in terms of things like the wider nature and climate imperatives, all of that. Those become important as well. It's what we decide here within this institution. Sorry, it's a slightly roundabout way of answering the question.

I'm just thinking, as an organisation, if you're not in receipt of public money, why would you have to stick to KPIs that a department that isn't sponsoring you is setting, when in fact you should be maybe listening to your levy payers, and obviously they're the ones who are paying the bill? That's the point I'm trying to make to you and some of the evidence that we've taken.

Just to add, Chair, if it's helpful, the operational plan, which contains the KPIs, is agreed by the board of HCC and then it comes to the Minister. So, in effect, it is their responsibility as the board to set KPIs that reflect some of the points you've been making, that reflect what they're hearing from the levy payers, what the expectations are out there. So, whilst we have, during the Government's meeting, discussions on how HCC are delivering on the KPIs, they’re KPIs that their board have agreed and submitted to the Minister. So, we expect them, because they're an arm's-length body—

We're not driving them by setting KPIs that take them off course. They decide what the KPIs are.

The board sets them and brings them to you—

Yes, but we then can sit down with them and go, 'Right, how are you delivering against these?'

Thank you. Jenny. Sorry, Jenny. Alun, did you want to say something?

I get that, the board sets them, and you then have that iterative conversation. But I would hope as well that the Government says, 'Hang on, we want KPIs that are stretching this organisation.' You are the only shareholder, I understand. And what we’re looking at here is absolute value for money—

Absolutely.

—for the levy payer, and that means not being, perhaps I'm interpreting your work as being a little bit too passive, but saying, 'Actually, we want to drive this machine hard.'

Yes, entirely. José Peralta and the chair both recognise that we are not what’s happening over in England, or what’s happening in Ireland, and so on. This is, in the grand scheme of things, a relatively small organisation—it’s in the nature of Wales—but it’s vitally important and it has to deliver real bang for buck. So, every penny that goes into that from levy payers has to deliver on the outcomes that they’ve set, that they want to drive for the red meat sector.

Also, as part of the wider, as you said before, ecology of supporting the industry, and driving the industry forward, it plays a vital role in that. So, it isn’t just that narrow role of delivering levy payer value; it’s about its wider contribution to the industry and to the country.

Huge. Yes, the wider contribution. And we will have discussions, Alun and Chair, on things such as the sustainable farming scheme. So, the chair of HCC sits on the ministerial round-table. And, just to say, it’s very challenging. It’s very challenging because some of the tensions within the policy framework are inevitable and inherent, in that we’re trying to do multiple things within agriculture, the environment, and so on, that they will challenge.

But, yes, we also set the direction. We as Government, you as Senedd Members, set what we’re trying to do in rural affairs, in agricultural policy, in red meat, and they operate within that. And, do you know, even if they were a different model that had no connection with Government, they’d still have to operate within that. But what we do in this model is we have the ability to sit down with them. We have the framework agreement. We can sit down and say, 'Here are agenda items that we need to say to you. This is coming down the line. How are you going to take account of that?' They will also push back at us, and say, 'As part of that agenda, we’ve got issues we want to discuss.' It could be funding. It could be critical mass. It could be whatever. But, yes, it is an interplay, but it is not divorced entirely from Ministers saying, 'Here’s our Welsh Government agenda.' But it is a collaborative space as well. I’ve got to say this. This is not something where we’re banging six bells out of each other. This is to do with Hybu Cig Cymru saying, 'We think we can deliver for our levy payers, and also deliver on wider Welsh Government objectives by doing things this way.' Now, that’s the fruitful approach.

Thank you, Minister. Jenny.

Thank you. I want to look at the governance arrangements and, really, whether they’re fit for purpose for turning this organisation around. Because Dunbia told us that Hybu Cig Cymru appears rudderless, and that rebuilding is going to be a challenge. Now, we can agree that the new chief executive, José Peralta, comes with really interesting credentials from one of the most successful companies, Puffin Produce, but does he have a board that is going to enable him to exercise the change that’s going to be needed?

I believe he does. I believe some of the recent appointments have strengthened that as well, not just with José Peralta, but the other two board members that we’ve brought on board as well. The board needs to be properly diverse and reflective of the different parts of the sectors of red meat, but also other capabilities as well. So, those classic board scenarios of financial understanding, strategic understanding, all of those aspects as well, and I think there’s a good mix on this. The board has got a mix of skills.

It has skills on that board, including in marketing, which is critical to them—marketing and communication. There is environmental expertise on that, to come back to Alun’s point. We need to make sure that, as well as delivering specifically on red meat, and promotion and growth and whatever, it’s sustainable as well, in terms of sustainability in the wider context of the environmental imperatives that we have. So, those are on the board as well. And they all have to have excellent governance experience as well. So, at the moment, there are farmers; there are levy payers; there are knowledge exchange people; marketing, finance, environmental sustainability, academics. Animal health and research people are on there. It’s a strong board.

Okay. The discourse, though, that we’ve heard from witnesses has felt like something from another era. Some of the witnesses have said, 'We want more levy payers on the board.' I believe there are five already. So, what’s going on there? And I didn’t really hear from any of them the understanding that we've got the Well-being of Future Generations (Wales) Act 2015, we've got a climate emergency, we've got instructions from the Climate Change Committee that we've got to eat less and better meat, and we've got to reduce our carbon emissions from food. So, convince me that this board really does have the capacity to rebuild an organisation that has clearly been through some really difficult times in the last 18 months. And we've seen other organisations falter and we're not out of the woods on them yet, either.

Yes, indeed. Well, in reflecting on the earlier discussion we've had, an organisation that has been through the last 18 months, it's been challenging for staff, but it's also been challenging for the board as well. But the additional two new members that we brought on board add in to the diverse expertise, which does include, Jenny, environmental expertise on there as well, as well as animal health knowledge. It's a very good, strong, diverse board. There are, I think, seven men and three women who are on the board. It brings in—

That's not diverse, though, is it?

Well, they need to keep working on it, as do all of our sponsored bodies—to keep working on that aspect of diversity as well. But the diversity of experience and knowledge on there is significant, and every time that new appointments are put forward, the important thing is to find where does it fill the knowledge gaps and the experience gaps within that board. I think that it is in a good place now, actually, to move forward, but I do acknowledge that some people will reflect on it having been through turbulent times in the last 18 months, and there have been gaps on the board as well.

There are also, by the way, others who will come up for appointment or reappointment, as happens, and in those opportunities the board needs to actually have, again, a good mix of skills to come through and bolster those areas you mentioned.

Okay. So, processors are not represented on the board, exporters are not represented on the board—

Sorry, second—?

Exporters. And I don't think that there's any representative of public procurement, which is obviously an important space in terms of feeding our nation.

One thing I do understand is that anybody looking from outside into a board will say—this is the wrong way to put it—not 'Why am I not on it?', but 'Why is somebody like me not on it?' However, Gian Marco, in terms of the export focus and the processors, because that is a vital part of the red meat sector.

So, I think there are two things I would say. One, they have—. HCC, through the appointments that the Deputy First Minister has made, we've tried to give them as much diversity, both in terms of knowledge and experience and diversity in other ways. There are always going to be areas that are not covered. It's not a big board.

No, I understand that.

But there are people on there who understand the food industry, who understand the pressures of the food sector, including the chair. That is part of their overall knowledge. But I take your point that, at the moment, there isn't a processor represented—there was until last year—and there isn't somebody specifically from the export side. But we do believe that, if you look at their overall diversity of knowledge and experience, it is a strong board. You've got former CEOs of big companies. There are some really strong CVs on that board, and they've—. My observation is that, as the Deputy First Minister said, it's been a difficult period for the board as well, and they've absolutely, I think, tried to act as a unified board to use that diversity of experience, to lead the organisation through a difficult period. So, yes, the proof of the pudding is in the eating, obviously, they're turning a corner and we'll see where the organisation goes, but I think that the board has demonstrated its value over the last—

Okay—

Is it fair to say that the board is weaker by not having a processor on it? Obviously, they are levy payers as well. So, obviously, you say there's diversity in the make-up of the board, but do you accept that that's a fair observation, that as a levy-paying part of the financial equation and a critical component of the red meat sector, not having a processor on that board is an anomaly?

Well, first of all to say that there is an opportunity to bolster the diversity and experience of the board coming up in the year ahead as well, because there will be two that are coming up for reappointment or a new appointment, and so on. So, that aspect can be looked at, both processors and exporters. But I think that Gian Marco's point is right: there is great diversity and strength within the knowledge and experience of the red meat sector on that board already. As the appointments come up, we can take the opportunity, or HCC can take the opportunity as well, to bolster where it would be better to strengthen particular areas, so things like processing and exporting. So, those opportunities are in front of us in the year ahead.

I think this links into the engagement point as well that you were discussing earlier as a committee. I think there are clearly two elements to this: there's representation from inside the organisation, if I can call it that, and the board is that vehicle, but there's also then the engagement—the work that HCC do to understand what's happening out there in the world of the levy payers and to make sure that that's reflected internally. So, I think, for me, there are two elements to an organisation like HCC in making sure that they truly understand the operating environment, including for their levy payers, and then reflect that back in the decisions that they take and in the discussions that they have with the Deputy First Minister.

The only reason I was focusing on processors is because, looking at it in terms of the foundational economy, the abattoirs are key to the whole business of it being badged as Welsh. I know that if they go to England to be processed, we still get the levy back now. But, nevertheless, if the animals have got to travel a considerable distance before they get to be slaughtered, they're clearly more distressed and less valuable in terms of meat consumption.

One of the arguments that was put to us was that we've got to increase the amount of livestock, we've got to build back up the numbers, and that has huge implications for restorative agriculture. If we start piling more animals onto a smaller piece of land, there are clearly impacts on the sustainable farming scheme.

It seems to me that there need to be other ways of looking at it. We have to take into consideration that there are all sorts of other pressures as well. We still seem to have very old thinking, certainly in the way the union representatives were putting things. And so, I hear what you're saying, there are going to be opportunities as people naturally come up for—

There'll be two posts with members who have served three consecutive terms coming up within the next 12 months—it's less than 12 months, within the year ahead. And that will give the opportunity then to reflect on some of the comments that you've heard and to think, 'Well, what is the new breadth of experience and knowledge that we want?' And if processing and export—.

But curiously, one of the things you mentioned, Jenny, in your remarks as well was the environmental and sustainability aspect as well. Well, there is that representation on there, but the challenge is that this is quite a small board and we don't want to grow it to an astronomical number. So, it's about getting the right balance where people can speak not only for a sector and a part, but speak as part of a board. Anybody who's been on a board will understand that you don't just represent sectoral interests, you represent what is the interest of HCC, how do we reflect into that.

But it is important that all sectors have a way into that. Part of that is with the membership—and we have opportunities coming up in the year ahead—of the board itself, but part of it is the wider engagement. And the points that the committee has made about where are the pieces where HCC is not currently engaging on the ground, beyond the big shows and so on—that's a pertinent point on this as well.

Clearly there are a lot of people watching this. A lot of people have left because they didn't feel that they could get the change that was needed because of the disruption that's been going on in the last 18 months. And we've recently heard that the main disruptor is still working for the organisation. So, clearly, there's a lot of work to do for this board to really change the culture of the organisation.

One of the things that it would be interesting to explore is, given that we have left the European Union, we're no longer getting rural development programme money, whether they could be more sustainable by widening the remit. Bord Bia, the Irish food board, is obviously a model that's been suggested that might be one to follow, and I just wondered what consideration you've given to that in your conversations with the chair and the chief executive.

First of all, I welcome the fact that the committee is looking at what models are out there and so on. One thing I would say, as a note of caution, is that these models don't act in isolation. The point that Alun was making previously is that there is a wider ecosystem of bodies who are out there within any nation's agricultural sphere.

Within Wales, you have Farming Connect, you have the work we do with the Food and Drink Wales board. It's interesting that the much larger organisation you refer to there as one of the possible models are much bigger, their remit is much more extensive, and they are much more costly in terms of their funding, but they do aspects of what our Food and Drink Wales does now. They probably do aspects as well of what our Farming Connect does as well.

So, the only note of caution I would say is, in looking at other models—which is always welcome, you should always think innovatively—there's a wider ecosystem. If that model, for example, was to be imposed on Wales, what does that then mean for the other organisations that are out there and what they don't do, and so on?

But having said that, I would say again that I don't think this is necessarily the end of all Government funding into HCC as part of the relationship. It's just we need a bit of rethinking and remodelling of this around the vision statement they're bringing forward, what they're trying to do, and the new framework. I suspect that HCC will come to us and say, 'We think we can deliver on your wider Government objectives, and for that, we need some funding.'

The biggest challenge we've got in terms of feeding our nation is fruit and vegetables, which are almost exclusively imported. What evidence is there that the board is thinking holistically about its conversations with people who are currently primarily meat producers about the way in which all farming has to change, because otherwise we simply won't be able to feed our nation, which is one of the primary objectives of Government?

Indeed, but there's the rub in terms of your initial question on this: that's exactly the work that we're doing within the SFS and Farming Connect, and some of our other partners are helping to steer farming towards that diversification into other areas. For Hybu Cig Cymru, their focus is much more targeted around red meat marketing, promotion, intelligence gathering, and so on. So, I don't think under their current format they would say they're going to do what others do in other international models—those with a much wider remit. Hybu Cig Cymru is red meat.

There's no problem with having something that's targeted on specific issues, but they've got to be aware of the wider ecosystem and the discourse that's going on elsewhere.

Yes, absolutely.

Are you satisfied that the board is now getting to grips with some of the huge challenges we all face?

Yes, entirely, but focused on the contribution of red meat to sustainability, and that does include the way forward for sustainable, viable, productive red meat businesses, but also in the wider sustainability context. I'm very confident that they are focused on that, without a doubt. But what they don't do—and some of the other models do, such as Bord Bia and so on—is go wider. And those are much more expensive to fund for the levy payer, just out of interest.

Thank you.

Thank you, Jenny. Sam, you indicated you wanted a supplementary. Have we moved through it? Okay, thank you. Luke.

Diolch, Cadeirydd. One of the things that keeps coming up within this inquiry, or with the previous evidence sessions, is the funding around HCC. When we had the chief executive in, he told us that HCC would need double the amount of money it receives to even have a chance to be relevant in tackling the scope that it has. Do you agree?

I love the challenge that the new chief executive has laid down for me as the Minister—that we've got to double the funding. If we double the funding, let's be quite frank: that's coming out of somewhere inside my budget, and that might be some of the other rural or agricultural initiatives that we fund, or the bodies that we do. I think what that does demonstrate is HCC are not afraid to speak up on a range of issues. But I mentioned earlier that even though the RDP funding is gone, that is not the end, I don't think.

I can't pre-empt this, by the way, but I don't think this is the end of funding from Government into HCC, and the reason is very clear. It's exactly what Jenny just touched on. There is a wider context in terms of the Welsh Government policy framework that we want HCC to deliver against with the red meat sector. We want those farmers not only to be producing really good domestically and exporting red meat products, but we want it to be in that context of wider sustainability and the challenges we're facing from climate and all of that as well.

I suspect they'll come back at us and say, 'We think we've got good work to do in that space. Help us out.' Can we double the funding in it? Well, if the committee wants to tell me which bit of my budget they'd like me to slice in order to achieve that, please do tell me, because there are no easy decisions on this one.

What they have to do, and the discussion we are having with them—. In fact, I met with them a week last Monday, I think—I can't remember. Within the last couple of weeks, I met with them. That vision piece is more than some fluffy cloud idea of, 'Here's a vision for the future.' It's a detailed piece that will lead into their business plan and their operational planning. It points out what they intend to do on behalf of their levy payers, how they're going to market, promote and get real bang for buck. I keep coming back to this. It is small, but it's got to be really damn efficient and effective on behalf of the levy payers. I think we've probably got a role to play in that as well, that they'll come to us on.

I get the push from the chief executive on this. I think he probably understands in the discussions we've had with them what our budgetary constraints are as well, but we're really keen to engage with them, both myself and my officials, in the regular meetings that we have on what that vision statement looks like. Because if we shape that in the right way, then we shape a future partnership for the Welsh Government with HCC.

It's also important in that piece to think about the framework that's being evolved—so, the old framework, which is a good framework, but we're updating that as well. That will help on that relationship.

So, part of that would be potentially looking at the funding model and how we might be able to change that, if there's a need to rebalance how they're currently funded. It's largely being funded by levy payers at the moment. That, I think, is one of the contentions around whether or not that funding is there for them to do the remit they have, because they do have quite a wide-ranging remit, to be fair.

The levy payer funding is always going to be critical, because that gives the responsiveness and the direct line of accountability through to the levy payers. It's a levy payer organisation. But I think HCC will feel, on the back of getting the vision statement right and getting the framework of operation between us and Government, compelled to come back to us and to say, 'Part of those wider imperatives around sustainability in the red meat sector, that's your role, Welsh Government. We need to be working with you on it and to come back in terms of funding.' But I don't want to pre-empt that because I think that work needs to be done now in the months ahead. Sorry, Gian Marco, I can see you want to come in.

The only thing I was going to add to all of that is that the space that I think is the most interesting is what is that network of support and delivery that's going to be needed for the sustainable farming scheme. We know that there's going to be a lot of advice and guidance that's going to be needed for the farming industry. We know that there's going to be work that's going to be needed that links up the sustainable farming practices with the Welsh food and drink brand. It's those sorts of areas that we'd be very interested to hear from HCC about as part of the engagement they do for developing the new vision, if they get to a point where they can come to us and say, 'Okay, well, we know you're trying to achieve these things, here's a potential role for HCC in helping Welsh Government to achieve those.' Those are the sorts of discussions that we will be having with them come the next few months as they develop that vision.

I'm not suggesting that the remit should be narrowed to fit the pot of funding. What I'm suggesting is get the remit right and then the levy payers and, potentially, Welsh Government funding coming into that remit. The remit has stood us well so far, I have to say, because we've got a levy payer body that is also very aligned with the grain of the policy that we set here in the Senedd.

I take from that that if the funding doesn't increase, that shouldn't mean that the remit should be narrowed.

No, I think we need to get the two together. Get the vision set out of what they're going to do in the years up to 2030, define that in what their operational approach will be with that, and then that allows us to get into a discussion with them to ask, 'What role does Welsh Government have within this?' And there are ways in which they can do this. We mentioned, in terms of the SFS, what role will HCC play within that? They’re engaged intimately, at the moment, in helping shape the proposals in terms of the officials group and sitting on the ministerial board and so on. But, there is also the wider—. I always forget the name of this process, the one that's to do with procurement of service: the dynamic—

The dynamic purchasing framework.

—the dynamic purchasing framework, where they can say, 'Well, we are going to deliver these on your behalf. As part of our role representing red meat, we've got a role to play in this specifically.' So, I think that's the space we need to be in.

Okay. Where do you see the Welsh Government slotting in when it comes to research and development and the funding of that?

Well, I think that plays into this, because if HCC want to make the case for us, going forward, that they have a clearly definable role within research—and this probably is a case that they can put forward—and then they say to us, 'Well, we think we're the organisation that can help you on that'—. There's an enormous amount of evidence and data gathering and research currently going on. We commissioned this out of various organisations. HCC plays a part in this already, by the way. So, that could be part of this case that is put forward, to say, 'We think this is part of our role now, aligning with your Welsh Government priorities'. Am I overspeaking there, Gian Marco?

No, not at all.

I look to Gian Marco to rein me back.

No, I think you're absolutely right, Deputy First Minister. There's work that they're involved in at the moment around things like carbon baselining, carbon footprinting, if you want to call it that. Those are really important evidence areas for us, going forward, to demonstrate the sustainability credentials of Welsh agriculture. So, that could well be an area where—. Again, within the context of what we're trying to do with the sustainable farming scheme, where we might look to an organisation like HCC to say, ‘Okay, well, can you help us deliver in this space?’, the dynamic purchasing framework that the Deputy First Minister alluded to is one that allows us basically to procure services from the likes of HCC—but not only; there are others on there—along those lines. So, I think there's probably a slightly different conversation that we're starting to have with HCC, going forward. They had a big block of RDP funding through the red meat development programme, which has now come to an end. Now that that's come to an end, there's a slightly different conversation that we're having with HCC about what their role could be in support of what we're trying to deliver, which might then lead, potentially, to additional funding streams.

And I do think the fact that their vision for 2026-30 is being developed now is actually incredibly timely, because what they can reflect back to us is on those conversations that they're having with their stakeholders and the levy payers, to say, ‘Well, this is where they're coming from. These are things that would be helpful to them, and how does that align with the Welsh Government?' So, I think there's a confluence of things happening at the moment, which should allow us, over the course of the next six to nine months, to have some of those difficult conversations within, as the DFM said, the context of public finances, which you're all aware of. But I think that's the sort of space that we'll be increasingly talking to HCC about.

So, if you wanted a shorthand version of where the Government's base is in terms of funding, potentially, going forward and so on, it's actually building on what the red meat sector has done really successfully over recent years. The reputation is built on strong sustainability. So, it's somewhere within that space, within SFS, within wider decarbonisation. Where's the ask from HCC, to say, 'We can actually deliver for you, not just the productivity and the valuable businesses and the processing sector and so on, but the strong sustainability piece around the red meat sector'? That has real potential. I understand that—. This is where that vision becomes really important—looking to 2030 and thinking then, 'Well, where do we go beyond that?', as well, but 2030 particularly. Because if they fashion that right—. And I understand that they're engaged, they've undertaken their first iteration, now, of stakeholder meetings, but we're also engaged with them as well, because we're trying to explain to them that this is the space we're in and we want to be a partner in this work, going forward—we are the sponsoring Minister. But it's within the context of that focus—sustainability.

Just looking at the time now, I'll come to my final question. I think, actually, this short exchange on funding crystallises what the challenge is here for the Government and HCC when it comes to getting HCC to deliver what it needs to within the funding package it has. So, I suppose then, the question I would have then is there a way of exploring potential alternative funding sources. Is it just simply a matter of saying, 'We're going to have levy payers and Government funding', or are there other areas that the Government could explore to get that alternative funding?

Well, we're genuinely open to ideas that the committee might come forward on, but I come back to that point: think about how that fits within the wider ecosystem of organisations within the food production, agricultural, sustainability field within Wales, how we are moving on that journey into SFS now as well. But we'd be really open to ideas that you came forward with, that would say, 'Well, there are other ways that HCC can draw funding into itself'. I'm sure there are.

One of the challenges that we've put to HCC, which I think they'll explore as part of the vision, is are they able to provide a service to others, are there other sources of funding out there that isn't the levy, isn't anything Government is trying to achieve, that they are in a good position to help deliver. And that's a question that we've put to them, and I hope that that would be part of the conversations and the thinking that they have on the vision.

Grêt. Diolch, Gadeirydd .

Just before I ask Alun to ask the final set of questions, the point I would make is that we've taken evidence that there hasn't been a healthy relationship, certainly in recent years, with Farming Connect, for example, and HCC, and, actually, instead of working collaboratively, they very often seem to be competitors. And there is a role and a risk that you end up double funding, is there not, if you end up doing what Farming Connect are doing via what you want HCC to do, going forward? And, really, HCC should be sticking to its principles of marketing, promotion and, obviously, being out there promoting what's good about the red meat sector here in Wales and internationally.

So, it's 'yes', but with a 'but' added to it. I think there's a genuine role for HCC to be engaged with and, sometimes, collaborating with people like Farming Connect and others, and also, to be honest, with other comparative boards in England and elsewhere as well, where it works for those HCC objectives. So, some of the stuff that it's been doing with Farming Connect—and it's got quite a deal of engagement with Farming Connect—have been things such as the college roadshows through May 2025, highlighting red meat research and development projects, as well as giving market updates on red meat, as part of Farming Connect collaborative spaces. HCC have had a presence at the red meat Our Farms farm walks as well. So, where they see the opportunity to get the red meat priorities in there, in a space, with Farming Connect or with others, I think that probably adds value, rather than duplicates. They're arguing HCC objectives, HCC imperatives, but they're doing it, they're looking for the opportunities there with Farming Connect and with others to make their voice heard.

Thank you, Minister. Alun.

Thank you. I was comforted, satisfied, with your earlier answer on the relationship with Government. I thought that was good to hear. I'm afraid I wasn't reassured by your arguments over the composition of the board. I didn't think that the arguments you made, I'm afraid, were very convincing there. My concern is, and I echo the concerns that were outlined by Jenny and others, that without any producer, any processor representative, then it does feel weak, and it also feels like very much a producer-focused organisation, if you look at the board. The gaping gulf for me is that of retail. If you're an organisation that's focused on the market, you need to have experience of that market on that board, and I don't understand how it can perform its role without a retailer, perhaps, leading that work, so I think the Government needs to do some more thinking on that. But in terms of where we are now, the points that have been made by Jenny, Sam and Luke around the role, space, purpose, shape and structure of HCC in terms of the wider support for agriculture I think were well made. I wonder if you can reassure me, first of all, that you will consider again the structure and the nature of the board, but also, when it comes to you looking at this vision, that you will create, perhaps, a more holistic approach to how the purpose of Government is delivered in terms of the agricultural industry and the creation of agricultural produce. The lesson from Bord Bia in Ireland isn't simply what it does and its budget and the rest of it, but the fact that it does take a far more holistic, from-the-farmyard-to-the-consumer approach, and it does bring things together. I think that the danger at the moment in Wales is that we're developing some very good initiatives—I don't disagree with any of the initiatives that you've delivered—but it feels a bit bitty. It feels a bit unstructured. It feels a bit chaotic sometimes, and I think that a more holistic approach and a greater coherence can actually deliver better value for the marketplace, but also better support for individual producers and for the industry as a whole.

Thanks, Alun. Look, there are two good points. One is, just to remind the committee, that, last year, we set out in 'Food Matters' how these pieces join together.

I know. I understand that.

Yes. Curiously, the success of our food and drink sector—of which red meat is a major part of that success—has been driven by laser-like expertise. I've got to say that it is probably UK beating, and probably leading internationally, for a small nation. Our drive into export markets and domestic procurement as well has been phenomenal—the value added in the supply chains, which includes the red meat sector. But that's not actually delivered by HCC. We've we found a way to do it that has drawn in a level of expertise that is the envy of other nations. So, that really works. So, I would just say again, look at the wider aspect of what we're doing. But I agree with you that we need to explain to people how this all fits together. So 'Food Matters' was important in that, but we need to keep reminding. If we do expand—

Sorry, can I just say, if you need to explain to people, do you think that, perhaps, it's a bit too complex?

Well, let me put it this way: it's a bit like the political sphere. There are people who really are anoraks on this and love the arcane minutiae of it. The question is what's been delivered on the outcomes. Now, if the current structures that we have are really delivering on the outcomes, that, for me, as a Minister is, 'Okay. Maybe you don't want to see inside the sausage machine—.' Sorry, that is particularly poignant and relevant, but if the sausage machine turns out brilliant sausages, it's working really well, and we are having success on it.

Look, I think that the Bord Bia example is really interesting because its remit is much bigger, and it takes on board some of the other aspects of what other parts of our current ecosystem in Wales does. So, I'm slightly cautious about throwing it all up in the air and saying, 'Let's impose a model', or that HCC could be a bigger remit, which will draw in more funding from some of those when they're being successful. So, I'm just slightly cautious on that, but I'm keen to focus on the outcomes. I agree with the idea of a holistic vision and way forward for HCC, but it probably won't look like Bord Bia because the starting point is different, but it does need to reflect those wider imperatives and those things that we've talked about with sustainability—of market access, of how it will work with those other organisations to drive forward red meat.

On the board membership, look, I've taken a strong message away, and HCC will have heard this as well, in terms of the opportunities that are coming up in the next 12 months, in terms of new appointments to the board, to make sure that some of those points around processing and other parts are reflected. But you will know as well, as a former agri Minister, that the processing sector is extremely diverse. Jenny was mentioning earlier on the small abattoirs. I'm a lover of small abattoirs—well, when they are really good, and we are very fortunate to have, in my own patch, Maddock Kembery in Maesteg. It's a real focus for many, many livestock producers. It's in the heart of the town. It was there before the town was built.

I was there on Friday.

Oh, cracking, and I'm regularly down there as well, getting supplies.

But there's that, and then there are the big processors, with hundreds of people in their processing chains. So, the question is who do you put on that reflects the whole of that?

That's a minor point.

So, I simply say, as we look to strengthen the diversity and the breadth of it, that there are some real nuanced decisions to be made. Who, on the retailers, would it be? Would it be—? But I get your point, and it has been well made.

There's a bigger point, I think, to be made here, rather than this.

But we will definitely reflect on this, as I think HCC should in the appointments that are coming up in the year ahead. But the board, as it is, has got really good, relevant expertise and experience, and it has been strengthened by the recent appointments and the new chief executive, so I wouldn't want you to think it's a weak board, because it is not a weak board. But if we can strengthen it—

There's a difference between the individual strengths of individual members and the board as a whole, and I think the board as a whole has weaknesses. I think that's quite clear.

Yes, certainly.

I'm finished.

Thank you, Minister. My one final point is that evidence we have taken looks back at when the Measure that brought HCC into existence was put together in 2010, and it was all about the principle of the ability to fund public money in, because that's how the Welsh Government, becoming the owner of the organisation, could do that, via the rural development plan. Obviously, we know the rural development plan doesn't exist any more. Some of the evidence we've taken says that the current ownership model isn't fit for purpose, and actually the Government should consider, as they're looking forward, returning it back to levy payers, the ownership of the organisation, and that would give it greater focus and reinvigorate it. Do you accept that there's a debate to be had about the ultimate ownership, which was fit for purpose in 2010 but maybe is not necessarily fit for purpose now in 2025, and that Government does need to consider if it should remain the sole owner of the company, HCC?

Look, it's a good discussion to have. It's the right discussion to have, because the context has changed significantly. But I would say, as we've reflected in our earlier discussion on detailed points, I don't think this is the end of the game for Welsh Government involvement in HCC. I think it would be a different type of involvement. So, that would be my first point. And the second point is just to be aware of that wider context of that, as I've described it, ecosystem of bodies that operate within it, and the success that HCC has had over years of promoting, very effectively, as a small body, the red meat sector.

I'm really keen to hear what the committee thinks about models going forward, but I would say the model that we currently have can be evolved and can mutate to the changed circumstance of the end of RDP, because it doesn't mean the end of Government involvement. And, do you know, if it was a totally floated-off, purely levy-funded body that was divorced from Government, in effect, we'd still be having to have meetings with them and saying, 'So, tell me, how are you contributing to the SFS then? How are you contributing to sustainability and decarbonisation? How are you doing x, y and z?', so what's the benefit of a floated-off organisation that might feel one step divorced from Government, when I suspect this organisation will be coming back to me and saying, 'Minister, we think you've got a role to play and we think you might need to put some funding in'?

Thank you, Minister. As you are aware, a transcript will be sent to you of today's proceedings, and I'm sure you both, and your officials, will look at that. If there are any issues or matters that you want to draw to the committee's attention, please do so through the normal channels. Thank you for your evidence today and going over time and being so concise in those answers as well. Thank you very much.

Thank you very much. Thanks, everybody. Thank you.

I'll just invite Members on papers to note—. There's one paper in particular, which is the—I did have it on my list of things—Employment Rights Bill, which I know Jenny had raised before, the point about the Senedd Commission. Are we content with the response that we've had from the Minister and the explanation why the Commission has been captured by this particular legislation? Okay. Papers to note are taken.

I'll now ask for a motion to move into private session, please. Thank you. We'll move into private session.