Economy, Trade, and Rural Affairs Committee

If you're ready, then, Minister, I'll start the questions. Each Member around the table has a set of questions they wish to ask you through the course of the hour and a half that we have you before us.

Bluetongue, Cabinet Secretary: there's been an announcement overnight that there's been another two cases of bluetongue. Can you give us an update on the current status of the control measures that you've put in place and the challenges that Wales is facing at the moment?

Yes. I think this is a major challenge for Wales, but it's also a challenge for England as well. We've seen that the snapping out to the border in England has had real implications across those two counties that we had previously seen as a buffer, but also in places now like the south-west of England as well. And I realise, by the way, that there are some out there who are saying that this disease will be mild, will have a minor impact. That has not been the case universally, particularly where there is high density of livestock or sheep and, in fact, where there is also low vaccination levels.

So, our approach has been, right from the offset, based on very good, intense stakeholder engagement, where there have been different opinions, and based on the most sound evidence, veterinary advice, animal welfare advice, that we are trying to hold as long as possible this disease out of Wales. And it is for the good of farmers, Chair, because what we're trying to do is buy time here for farmers to vaccinate. And I think if there's one message to come out of my appearance in front of this committee today, it is, 'Speak to your vet and talk about vaccination', because in those countries and those regions, including in England, where farmers have been slow to actually vaccinate, have hesitated and the disease has got a hold, the impact has been severe—severe on animal productivity, on animal welfare, on the livelihoods of the farms as well. So, to those who are seeking, at the moment, to put a message out there of, 'Don't worry about this. Let it rip', if we let it rip and there is no vaccination out there, the 'let it rip' could have very severe consequences on farm welfare, farmers' welfare, their mental health and well-being, and the livelihoods of their farm.

So, our approach has been, all the way through, to work with industry, to work through a staged approach. And we have managed, by the way, to hold this disease out until right now. What we're doing now—and I'll ask Richard to come in, as the chief veterinary officer, in a moment—is that we are trying to contain the incidents that we have, lock them down and stop it. We're also moving into that part of the season, by the way, where the Pirbright Institute will say at some point that we are in the low vector season, where the weather changes, and the weather will be on our side.

I will ask you to speak to that, because I hope you'll be able to say about the restrictions and what that might mean for the restrictions. But if the chief vet would like to address the issue of, obviously, the two new cases, and could you confirm whether there are any others still under investigation that might come through in the next day or so, to confirm even wider spread movement of the disease?

Thank you, Chair. Diolch. Bore da, bawb. Good morning, everybody. So, as you rightly say, Chair, overnight, I confirmed two new BTV-3 cases, one near Llangammarch Wells, in Powys, and one near Gladestry. These were in beef suckler herds. In those individual farms, there was a single animal who was BTV-3 positive. All four—as we have four cases in Wales as we sit here this morning—farms are under movement restriction. As I say, the BTV-3-positive animals, where there are single animals, and these two most recent cases, will be culled today. We will have two suspect cases being investigated today and tomorrow because, as we expected, with the arrival, if you will, of BTV-3 in Wales, vigilance is crucial. So, it's knowing what to look for with bluetongue disease: reddening of the muzzle, crusting of the muzzle and erosions on the muzzle and mouth, along the coronary band, above the hoof, again, looking for redness and ulcerations, lameness, and often the animal will be off-colour, maybe a bit dribbly and has a high temperature. So, it's knowing what to look for as a farmer, working with your vet, talking to your vet, as the Deputy First Minister said. Because we have got the disease in Wales, we're raising that awareness, encouraging, emphasising vigilance and reporting of suspect cases, and we're naturally seeing also an increase in those suspect report cases coming through. So, we have those under investigation.

Similarly, the Animal and Plant Health Agency and Pirbright colleagues, as the Deputy First Minister rightly stated, are working incredibly hard since Friday night, day in, day out, with regard to investigations, with regard to source and spread, with regard to these bluetongue farms. So, that work continues. We have an evolving situation and we are gathering the evidence on which to make our disease control decisions. For those farms who I recognise are affected, and I recognise the impact that that brings to those farmers and their families that are affected, as well as concerns that there are in the broader livestock sector, but for those individual farms where BTV-3 has been detected, those animals will be culled, or have been culled already for the Friday cases. Those farms are locked down under movement restrictions. I encourage that vigilance, that discussion with your vet. If you see suspect signs, report it immediately to APHA. Consider also the time of year that we're in: on the one hand, the temperature, over time, will reduce risk, but we're not there yet. Reducing risk does not mean no risk.

If you're thinking about the sheep sector, for example, going into the tupping season, as I say, protecting flocks through vaccination—there is still time to vaccinate. So, again, talk to your vet about that, because we know the long-term impacts of bluetongue virus can be on fertility, can be on reproductive loss, abortions, and perhaps, in the spring, as we saw in England this spring, the birth of calves and lambs that did not survive because they had been infected in pregnancy. So, those long-term impacts we need to be really clear about to enable farmers to make those decisions about vaccination and what's best for their business. As I say, I recognise the concern, but it's the importance of vigilance and that reporting of any suspect case, and APHA will then investigate. If BTV-3 is detected, as we saw in those two cases that I confirmed last night, then action is immediately taken and the work to investigate is continuing, and we will therefore see what comes from those suspect cases that are currently under investigation as well, Chair.

So, there are two cases currently under investigation and four cases confirmed.

Indeed. So, there are two suspect cases under investigation and four cases of BTV-3 that have been confirmed in Wales to date. And as I said, APHA are continuing their epidemiological investigations with regard to the four cases that have been confirmed.

It must be a very distressing time for the families involved, and I'm sure the committee extends their regards to them and that we're thinking of them at this time, especially with the movement restrictions as well. With that in mind, Cabinet Secretary, you introduced the point about the vector season and, obviously, we're moving into a cooler part of the year. With the restrictions that are in place at the moment, and Scotland have made changes as well, do you envisage yourself making changes to the restrictions that are in place, or, in light of what's been confirmed by the chief vet, would you see those restrictions staying in place for longer?

We've always said we'll keep it under review and, in fact, through the whole of the summer, since we introduced the controls, we've made adjustments, and those adjustments are based on feedback from industry, and also that balance between trying to protect the livelihoods and the animal welfare of the animals, and avoiding the significant potential negative economic impacts and the welfare impacts on farmers themselves by letting this disease rip, but also the trading impacts, which are real, and we're very aware of. So, we keep this under review. So, what we've done, as you know, over the course of this year already is we've changed our approach, based on risk assessment, to low-risk moves from restricted zones to slaughter in designated Welsh abattoirs. We did that earlier this year to maintain abattoir throughput and viability in Wales. That was very much based, by the way, on representations that were made in our stakeholder discussions with things such as the processing sector as well.

We also then subsequently introduced the ability for animal movements with negative pre or post-movement tests following risk assessments, so that we could source critical livestock into those farms who were saying, 'We need to have some movements.' And then—and there is a point that I come to on this—at industry request, we've agreed that moving vaccinated or pre-movement-tested animals during the cooler months, which we are now into—this is very recent—when disease transmission by midges and midge activity is, hopefully, decreasing, could be licensed to facilitate autumn breeding. But every time we've made one of these decisions, we've been very, very clear with stakeholders that the cumulative impact of this in increasing risk increases each time we do it. But we're trying to respond.

Now, where do we go from here? Well, we're coming in, as we say—. The Pirbright Institute is the one who declares when we're into low-vector season. So, we wait for them—they determine. And bear in mind that, even when we go into the low-vector season, there will be different climatological conditions in different parts of Wales. Powys will be different from the south Wales seaboard. We could have microclimates within certain areas of farms as well. So, we will keep the vigilance, in terms of the immense investment we are doing with APHA and on-farm analysis as well. But as we move into the low-disease-transmission period and the low-vector period, which, realistically, we could be talking about here the December or January period, we will, again, reconsider the animal movement restrictions, in line with my commitment to keep the policy under review. And we'll do it based on evidence as well. We'll also be basing this on what we pick up from the experience right across the wider parts of these islands and by industry feedback as well.

I appreciate Pirbright will be the ones who will make the call when the vector period will be changed, but you don't envisage that period starting before December. And so the current restrictions, unless something dramatically changes, would stay in place till December, and you're not minded to view what Scotland have done in relation to store stock for finishing purposes.

I might bring Richard in on this because we've had a stakeholder engagement, which Richard was present at, even this week. So, he might have an idea what the requests are from industry, wider, and where the evidence is taking us.

Thank you, Deputy First Minister. Diolch. So, just to be really clear about the seasonal low-vector period, from analysis of past data, past years, that seasonal low-vector period typically is around the turn of the calendar year, December/January. That's when we enter what we would consider the low-vector season, and that massively reduces risk, because, as we all know, midge activity in the depths of winter is barely seen. The principle, as the Deputy First Minister outlined, is that we're keeping the bluetongue situation under regular review based on emerging evidence. We have several months—as you are, I think, alluding to, Chair—between now and the turn of the year, so we are obviously keeping, as I said, the situation under regular review, because we have an evolving situation on the one hand, and, as I say, we have to keep a close track on the evidence as it presents itself, which may inform a change to policy. But we do not have that set out as a specific, 'X will happen on Y date', other than the expectation of the low-vector period being around December/January. We must keep the situation, as we have all through the year, under regular review, and assess based upon the evidence as it presents itself over the coming weeks and months, as we come towards that seasonal low-vector period that the Pirbright Institute will advise upon.

Sam.

Thank you very much. Just very briefly on vaccination, have you considered making it compulsory in Wales for livestock holders?

We haven’t, and this isn’t an approach that’s been taken in other parts of the UK. We prefer, Sam, to do this on a strong steer, on a voluntary basis, and for farmers to actually speak to their vets, as we’ve said, and commit to doing it. If you were around one of these areas, if you were a farmer in that area, that is the first thing I’d be doing. I would be speaking to my vet and saying, 'Should I be vaccinating? What is the balance in cost between my investment—?' For cattle—. You need to pay for the vaccination, but in terms of the value of that beast that you are eventually going to take to market, if you can protect it against bluetongue, surely that is outweighed by the cost of a vaccination to protect your herd. So, we haven’t considered making it compulsory, and it hasn’t been an approach that’s been tried across the rest of UK. We prefer to work with the unions, with all of the stakeholders out there to get the message out, 'For goodness sake, speak now—now—to your vet, and talk about whether vaccination is appropriate for you.'

If you look at the speed at which this has now entered parts of England, where they’ve snapped it out, including the south-west of England—and this is not midge-borne—the speed at which it’s transferred hundreds of miles is very rapid. On that basis, for our farmers in west Wales, away from some of these incidents that we’re seeing that we’re trying to control at the moment, the message is not just for those around this, the message is, 'Before we get to next season, when we go into the low-vector season now, this is absolutely the time to have those discussions with your vet and talk about vaccination.'

The Chinese proverb is that the best time to plant a tree is 100 years ago, the second-best time is now.

Absolutely.

Do you regret, maybe, not pushing vaccinations earlier, when we knew, last year, that there were bluetongue incidents occurring, given what would happen on the continent? Have we left it a little bit late to advocate and push for vaccination in Wales, in comparison to some other areas?

I'll bring Richard in, but, no, I don't think we have. We've always been very clear on saying, even when we had the two-county buffer, 'You need to consider vaccination', because there were transfers of cattle at that time, even when you had that two-county buffer. Now that it's gone, we've absolutely upped the ante in saying, 'This will—.' We anticipated that once it was snapped out to an all-England border, this disease, based on what it's done previously, would rapidly move into those areas of England. It has. It's doing it now. In which case, our success in holding this back, at this moment, albeit with the incidents that we're now trying to control and contain—. This is absolutely the moment where all of us—this committee, I'd welcome as well—need to send a very clear signal out, saying, 'Speak to your vets. Talk about vaccination. Get on with it.'

You are right, farmers could have been—and some of them were—looking at vaccination some time ago, but not enough. Now, they absolutely need to do it, because, clearly, the evidence would suggest that some of the transmission now into areas of England that have not had it before is not being carried by midges, it's being carried by cattle movements. Well, that is what is now facing us in Wales, and now is the time—

I don't mean to cut you off, Cabinet Secretary. The chief vet—. I'm conscious of time, and we've got several sets of questions to get through—

Sorry, yes.

So, on this final point, the chief vet, please.

Yes, diolch. So, the Deputy First Minister has described the situation very eloquently. Just to put a bit of colour onto that picture, with regard to the experiences in England, we're seeing cases in what was the free area. If you take the west country as an example, in the recent four to six weeks, there's been an escalation to 30 to 40 cases in that short period of time. So, the disease has travelled down to the west country, and is now becoming embedded in the west country, likely with local midge circulation.

If we look at the statistics, during July, once the England RZ had moved, maybe three per week suspected cases were then being confirmed; now, in England, 20 plus suspected cases are being confirmed a week. We're seeing an epidemic curve. It starts flat and it rises rapidly. I hope that that does not transpire to such a great extent from the point of view of the impact on farmers and livelihoods in England and the risk that that also poses to Wales, but we're seeing that evolution, if you will, of the epidemic in England. Vaccination is the best protection and decision that farmers can take with their vets, and also, as I said, we have minimised the risk through controlling livestock movements, because it is those livestock movements that can also introduce disease.

If we reflect on Wales a year ago, it was long-distance livestock movement, infected livestock coming from the east of England before the zone got in place, that brought bluetongue to the Llŷn peninsula in Wales exactly this time last year, where we had two farms affected. We eradicated the disease last year and we were back to being without bluetongue in Wales, having lasted for almost the whole of 2024. We've got to this stage in 2025 without seeing bluetongue in Wales. We've got vets reporting vaccination of nigh on 230,000 animals. But, as you'll appreciate, and as I think your question is alluding to, Sam, that is a small fraction of the livestock population. We know where we are in terms of detecting the disease, but as I say, it is through these different measures that we're keeping bluetongue out of Wales to minimise that risk that we all recognise and the impact on farmers, their businesses, their livestock and the long-term trends that we see in other countries.

So, as the Deputy First Minister has rightly said, we have our control measures. We've kept bluetongue out of Wales for as long as possible. We are acting immediately to control the disease where we have detected it in Wales. Now is the time to talk to your vet if you haven't already and understand the risk, understand the choices, understand that it's really important to source stock responsibly, to vaccinate, to be vigilant. Those vaccines have been available since March of this year, when the authorisation was provided. Those vaccines are freely available and the stock supplies are reported to be sound. So, talk to your vet, source stock responsibly, and be vigilant. Diolch.

Thank you, chief vet. Hannah.

Diolch, Cadeirydd. I'm going to turn from one challenge to another now. Cabinet Secretary, if I can ask first for an update on the situation with regard to avian flu.

Thanks, Hannah. These are the conversations that Richard and I have late in the evening here, what the updates are. We've had two cases of highly pathogenic avian influenza confirmed in Wales during the current outbreak period, which runs from October 2024 to 30 September 2025. The first case was on 23 June. It was on a smallholding near Haverfordwest. The second was in Wrexham, in a game bird holding on 24 June. We've also had, Hannah, a case of low-pathogenic avian influenza confirmed near Dulas on Ynys Môn on 9 August. In all of these cases, we put in place disease control measures in line with the strategy that we have in place for avian influenza. All of the restriction zones in relation to these cases have now been lifted. So, we went in, we put the control measures in place, we took the action, they've been lifted.

But I just want to say as well, Hannah, that the risk of HPAI in wild birds in Great Britain is still currently assessed as high, and the risk of poultry exposure to HPAI is assessed as medium where there is suboptimal or poor biosecurity, and low where there's good biosecurity in place. We've still got an avian influenza prevention zone remaining in place in Wales, and, by the way, in England and Scotland as well, not least because we're coming into that season where migratory bird patterns now will increase as well. Gatherings of poultry are currently prohibited because of the risk of disease spreading, which does have an impact on those who want to see poultry gatherings and so on, but it's a necessary measure.

And just a bit of data for you, Hannah. The total number of cases in Great Britain for the current outbreak, in the current outbreak season, is 78 confirmed. One of these was HPAI H5N5, 76 are H5N1, one was LPAI H5N3; 71 of these were in England, three are in Scotland, three are in Wales. So, again, the call here to everybody involved in poultry or game birds or anything else is vigilance, biosecurity, and then we can, through our good offices, work to control this within Wales. But we are coming into the migratory bird season.

Thank you, Deputy First Minister. You've touched a little bit on where I wanted to go next in terms of my questioning around preparedness as we go into the winter season. I don't know if you could share with the committee any projections or preparation in terms of that. But you also talked about some of the incidents in Wales and the one near Wrexham in respect of game birds. My understanding is that at present, there's no requirement for shoots to report sick or dead released pheasants or wild birds. Do you think this is something that perhaps the licensing of game birds might be able to help in terms of tackling the risk of the threat to wildlife?

Thanks, Hannah. First of all, you're right in highlighting the continuing risk as we go into the migratory season ahead. The risk level is still high, so that avian influenza protection zone remains in place. This means that we have mandated strict biosecurity measures for all bird keepers, including myself, by the way. I have six hens. They're all very well and laying their eggs on a daily basis—productivity is high. And I have, by the way, followed my CVO's advice, so I actually have a checklist of things to do with biosecurity in my place as well. So, my birds are being well looked after at the moment and are productive.

But we have mandatory strict security measures for all bird keepers within Wales to keep them free from disease. All those keepers need to complete their self-assessment biosecurity checklist, which is on the Welsh Government website, and we're going to keep that in place—that avian influenza protection zone—until risk levels indicate that it is no longer required.

On the game birds, we are currently reviewing the avian influenza prevention zone declaration. We're considering introducing a game-bird-specific schedule with new biosecurity measures for game bird keepers. As part of that, we need now to engage, and we are engaging, with stakeholders to develop the schedule, along with something that is specific—a mandatory but sector-specific biosecurity checklist, similar to those used by poultry keepers and those who are involved with captive birds as well. So, we see the necessity now to move into this space with much more clear direction for game birds as well.

Thanks, Chair.

Luke.

Diolch, Cadeirydd. If I could turn to fisheries—a couple of questions on that. I'd appreciate a better understanding on the impact of the common understanding on the development and implementation of fisheries management plans, if the Deputy First Minister could give us some clarity on that.

Our fisheries management plans are on course. During the period I've been in office, we have worked extensively with stakeholders. We've brought forward a good schedule of fisheries management plans and they're still on course. We note some of the concerns about whether these will be knocked off course. I can give you the assurance they will not be knocked off course.

The UK has preserved regulatory autonomy in this space, and we as the Welsh Government are committed to developing those fisheries management plans, because that's all to do with our trajectory towards sustainable fisheries in Wales. So, fisheries management plans, Luke, is one of our top priorities. It's in line with our strategic approach. The new agreement will not impact the development and implementation of those FMPs.

Just to give you a brief update, the Welsh crabs and lobsters FMP, which is one of the latest in our schedule of FMPs, is progressing very well. There's a first draft that's being developed with stakeholders. We're aiming for consultation on that early in the new year, and then we will see further consultations on other FMPs as well. So, I just want to give that assurance to you, committee and stakeholders out there—we're not being knocked off track, because the FMPs are core to our business within Wales.

Thinking about the number of consultations that are going on, when we look at the extension of the existing UK-EU fishing arrangements to 2038, has the industry in Wales been consulted on that or have discussions happened with the industry around that extension?

We're fortunate in Wales that we have very good engagement with stakeholders on a regular basis. We have a ministerial advisory group for Welsh fisheries that meets quarterly. The recent announcement was discussed with them back in the June meeting. We went through the implications of that. We recognised their concerns, and I think some of the concerns, by the way, are coloured by the wider UK issues, particularly within Scottish fisheries. I think the mood music gets picked up, but actually, Welsh fisheries are significantly different in character and scale, and also the fisheries that we have here are quite different.

We're engaging through the Welsh fisheries ministerial advisory group on this. The next meeting will be in two weeks, I think it is, or thereabouts. We don't believe that the extension to 2038 has any significant impact on us. In fact, there is this mutual assurance of the guaranteed access to fisheries so we can get on with pursuing our sustainable fisheries policies. We remain outside the EU's fisheries rules for that, we get on with doing that, but we'll keep on engaging with stakeholders on this.

The other aspect that's pertinent to this, of course, is the announcement by the UK Government on the coastal and fisheries plan [Correction: 'coastal and fisheries fund']. We're engaging with the UK Government on this, because we want to make sure that we as a devolved Government and also our stakeholders are involved in how that is used within Wales for the benefit of those coastal communities and also for fisheries in Wales. So, we just want to make sure that our voice is heard on that as well.

Jenny's got a supplementary.

I'll come in later. I wanted to talk about—[Interruption.] Okay. I wanted to just ask what consideration you've given to banning bottom trawling, particularly in marine protected areas, because a huge number of environmental organisations are concerned that the destruction is universal whenever these large trawlers go in; they just pick up everything.

I'm very aware of the debate on this, not least on the back of the well-publicised documentary on this as well. We actually debated this on the floor of the Senedd very recently.

Similar to my response to Luke now, one of the things I would say is that for 'Welsh fisheries', don't read 'England fisheries'. The work that we've been doing over many, many years in terms of scallop fisheries in Wales—work that we've done with, for example, Bangor University and others—on an evidence-based approach, showed that the scallop fisheries that we have, in the areas that they are doing, in the boxes that they are doing, very well geographically defined, are not impacting in the way that we've seen in that documentary.

There's a different fishery going on off parts of England from what we have. It's also fairly limited in the fisheries that we have. We're very live to these discussions, but I'll give you the same reassurance that I gave when we debated this on the floor of the Senedd: we will always work on the evidence.

There is a parallel discussion on where we go next with marine protected areas in Wales, and this is a piece of work that we're carrying on within the Welsh Government, within our small teams as well, development of where we go next with marine protected areas and how does that affect fishery activity within those areas. But again, let's do it on the evidence, as opposed to simply saying, with a blanket approach, 'We cannot do any dredging anywhere'. If there is not the reefs, the seagrass, the measures that we really need to protect, that's what we need to be looking at. Work with the evidence, not do damage, but where there can be sustainable scallop fisheries, then we also need to look at that; not least, as well, the balance with the livelihoods.

The other thing is I think there's stuff that we can do, by the way, in our scallop fisheries even right now, and this does go back to the fisheries management plans. I'm hopeful we might be able to bring something forward shortly. Even with our existing scallop fisheries, we can move the sustainability of them up a level. There are types of scallop fisheries that we'd like to look at piloting that are even more sustainable in the way that they do their fisheries, so I think Wales can pioneer in this area. But, look, I'm very aware of the wider debate on outright bans on dredging; I just don't think that the Welsh fisheries are what you see described in its entirety within that documentary. We need to work with the evidence.

Okay, so what discussions have you had with the UK and the Irish Governments to improve their practices?

I'm always open for those discussions, and we could certainly share our experience with them on the evidence-based approach that we've done. I wouldn't want to teach them what to do with what are quite significantly different fisheries within their areas, on a different scale and with different characteristics of the marine environment as well, but I would be more than willing, if there was an appetite from Scotland and England, to say, 'Here's what we do, based on a real evidence approach to how we do sustainable fisheries within scallop fisheries and so on.'

Okay. Thanks.

Luke.

Just one final question from me then, Chair, specifically on shellfish exports. Has the Welsh Government been involved in any negotiations around including shellfish exports in any future sanitary and phytosanitary agreement?

Thanks, Luke. Yes, we have, but they're not concluded yet. We've always seen real potential here, if we can land this right, for bivalve molluscs and so on of reopening some of the barriers that came down when we had EU withdrawal. We're very actively engaged with the UK Government on this. We've had good engagement so far on the SPS agreement, which this is part of. We're hopeful that this will continue. So, I'm saying this quite publicly, in case any Westminster Ministers are listening, because there's been a reshuffle with some as well there. We've had really good engagement to date.

They are trade negotiations, but we've made it clear that these are trade negotiations that have significant devolved impact. They've listened to that. They have worked with us, and we're in that good space. So, I'm looking forward now to my next discussions with new Ministers to say, 'Let's build on this now.' We've previously agreed, Luke, a pattern of ministerial engagement that would happen during negotiations, part of which is us as the, if you like, the Welsh Government fisheries, food et cetera team, part of it is Rebecca in her role as economic Minister as well, and some co-ordination with that. We just want to make sure that, as we move into the detailed negotiations now, Welsh Government is involved. We're not the top table. We're not the one at the negotiating table, but I remember, from my days as a UK Minister at the Council of Europe, we always engaged really deeply with Welsh, Scottish and Northern Ireland colleagues to make sure their priorities were reflected at that top table. So, if we can't be right in the room, what I've described to UK Ministers is, 'We'd like to be in the room next door and you to come out to us and speak to us before you agree anything.' I think we're getting to a good position on that. But I do need to speak now to the new batch of ministerial colleagues in Westminster to say, 'We're doing well, we've been engaging well—let's keep this going.'

From that, Cabinet Secretary, I take it you haven't met any of them yet.

I have.

You have.

Yes, I have.

So, this will be a further discussion now on—.

Yes. Yes, we've already—. I'm pleased to say we've already met, both formally and informally. We also have an inter-ministerial group that I think is scheduled either for the end of October or November—we're trying to tie the date together—which will be the first meeting with the new Cabinet Secretary. We've stressed to them the importance of those regular meetings, because it hasn't always been the case that they happened. They have been more recently now, but we need to have those. But, no, we've already met, but we need to get into now laying out formally some of our continuing priorities.

Thank you. Sam.

Thank you very much, Chair. Bovine TB: there's been a change in bovine TB policy to restrict, quote, 'resolved standard Inconclusive Reactor (IR)' animals. Can you explain the rationale behind this and how it will be communicated to farmers?

Yes, indeed, and this is in response, by the way, Sam, again, to industry asks that we've made this change. So, this will be permitted reasons for these animals to be moved under licence. The way it'll work is that all the standard interpretation IRs in Wales that have a negative result under the standard interpretation at the retest read on or after 1 January 2026—so, there's the date, okay, and I can talk to you, if you want, about communication strategies, because it's important we get this clear for people—will remain restricted for the rest of their lives to the holding in which they are found, and the only permitted off-movements for animals are to a slaughterhouse or an approved finishing unit, and the cattle can then move directly or via an approved slaughter gathering or TB dedicated sale, what are known, as you know, as orange markets. Now, this is based on really good evidence again. So, there have been multiple peer-reviewed scientific studies that have demonstrated that those resolved standard IR animals—IR animals for short—have a significantly higher likelihood of becoming reactors than clear tested animals, so they have that higher risk of spreading TB. So, if we restrict those resolved IRs for life to the holding, it prevents the transfer of that risk to other herds. I'm sure Richard can wax lyrical about the various academic papers and scientific and applied papers that have shown this.

I was just going to come back on that. Is this some of the work that's been done around the Pembrokeshire project, where there are similar elements to this where farmers are understanding the red, amber, green rating of their animals, the risk element, and therefore taking a proactive—? Is this now broadening some of that knowledge learned from the Pembrokeshire project, or was this from a different stream of academia that this—?

It's a different stream of academia, but it's the same approach, which is using and sharing the data. So, it's not held by Government or Richard or whatever, it's with the farmers and enabling those decisions to be had.

That was really hard to get, as well.

Yes, indeed, indeed. But I think we're genuinely leading the way on this in Wales in this approach—if we've got the information, share it, make decisions, and farmers making decisions as well. This has come up from a different stream of evidence, but it's the same approach and, of course, this was recommended by the TB programme board—that's where this has come from. And I can't overemphasise too much the importance of the TB programme board and the TAG group underpinning it, which is the expert advisory group.

I'll come to the TAG group, but in terms of the communication to farmers now for 1 January—1 January is a busy date, as well, with the sustainable farming scheme launching—how are you communicating this change?

Really critical, because, if you work back from 1 January, we've got a raft of things that we're doing and that includes—. If it's helpful, I might write to you with some of the detail and the dates—

Yes, if you could write to the committee, that would be great.

—but let me summarise, briefly. So, we have, starting in October, the announcement, the press releases, the social media channels, including stuff from Richard here, as the CVO, stuff from myself as well, and also industry messages on this, which are critical. There'll be published guidance on the Welsh Government website, including links to the general licences, including links to things such as the evidence underpinning this and the support for the policy change, and also links, by the way, to make this wider in the understanding, to Government UK and the TB hub as well, which a lot of people now use. There'll be a stakeholder bulletin going out, we will have the Gwlad newsletter, we will have articles going in the Gwlad winter updates, we'll be at the winter fair as well, which I think will be critical to explain this as well. And then, as we approach the date itself, we'll be ramping this up as well. But, Richard, you've been closely involved in pulling all of this together; I don't think we're going to leave any stone unturned in the way to get the messaging out on this.

Thank you. Diolch, Deputy First Minister. Certainly, that's our endeavour and the crucial thing I think to emphasise here, Sam, and for the benefit of the committee, is that this policy change has been an industry ask because of the high-risk nature of inconclusive reactor animals. Restricting them to farm for life means that they are then not traded on the open market, where you could have that disease going with the animal to other farms.

The evidence is absolutely clear through peer-reviewed published literature and data analysis, and the technical advisory group have scrutinised those data at the behest of the programme board as an industry ask, and made that recommendation; we're making this policy change. The final thing to say on that, before I come briefly to the comms point as well, is that this comes to the heart of one of the things I say regularly—forgive the technical nature, Chair—a bovine lump is a red flag. So, when you've got a TB test, a bovine lump is a red flag. So, using the test data, as you rightly say, the principles that we have in the Pembrokeshire project—we also have now the sister project in north Wales, but that's a by-the-by for your question—that bovine lump as a red flag is crucial from the point of view of identifying and managing these risky animals.

On the comms specifically, through the programme board, looking at the evidence of the TAG, we have a programme board task and finish group, who have worked to develop the comms and the different messages and channels that the Deputy First Minister just described. This is true partnership working—an industry ask, co-designed, evidence-led, and then the programme board and the task and finish group bringing forward a comms plan. Everybody has a role to play in the eradication of bovine TB. Everybody has a role to play in ensuring the accurate communication of the new policy, what it means and how it will come into being, so to speak, for farmers on the ground. And this is where the programme board are providing real leadership, bringing that task and finish group together to design the comms that then brings together the unions, vets, other stakeholders, farming charities, so that it is holistic and hopefully far-reaching. And I hope the committee will also be able to provide amplification of the comms and messaging when it does come forward, so that we can ensure that that information is also being shared through as many channels and networks as possible.

So, just to double-check, the restriction will solely rest on the IR, rather than the whole herd?

So, where you've got a standard inclusive reactor animal—sorry, I'm tripping over the words—a standard IR animal, that animal will be restricted to farm for life, with regard to that animal.

The wider herd isn't under a movement restriction, unless—

Go on, Sam.

—there are other issues, wider issues. But, if that's a sole IR on a farm, the rest of the herd has free movement regardless of the—

I'm not going to comment on individual case management, because no two herds are the same, and no two herd TB breakdowns are the same. It would be inappropriate of me to individually pick out case management for individual herds. But the policy change is absolutely clear: a standard IR animal will be restricted to farm for life, and so we'll be announcing that through comms from the end of October, through that programme of communication that Deputy First Minister described, and then the implementation, if you will, in terms of when it will actually be reflected in animals that are detected as standard IRs, will be from 1 January. But we're providing the comms from the end of this month to make sure, through all the channels, through all the networks, through all the stakeholders, that the awareness of this new policy is brought forward.

Okay.

Sam, it may be worth also pointing out some of the detail that's gone into this has also looked at very rare—very rare—exceptions as well, where you could make an exceptional movement. But it is rare. So, for example—and we've been aware of this very recently—if you have something like an extreme flooding event, where there's a danger, literally, to the animal welfare, then there is ability within this, in exceptions, then to move those animals. But the standard approach now for the standard IR reactors will be what we've described from 1 January. But we've thought—. Sorry, the TAG group have thought through, 'What if you have an extreme circumstance?'

So, coming on to the TAG group, how's their work getting on, how's their remit? Are you content with everything, knowing that it's likely that some of the conclusions that they draw will be potentially for the next Government to implement? Are you content with how the TAG is working?

Yes, I really am. I think the TAG group and the programme advisory group have been one of the signal successes of an evidence-based style of working. You will know that some of the recommendations they brought forward, when I first came into post, within weeks we were implementing those recommendations. They were bringing the advice up and we were implementing them. And they've kept that pattern going, so there have been some real short-term wins. But they're working on some more fundamental thinking as well, to bring forward suggestions that will indeed be, I think, of use to this Government, but also to future Governments as well. And they're doing it, again, based on evidence, analysis and so on. They're going great guns, I have to say—excuse my colloquialism, but I have real confidence in the work that they are doing, the advice they're lifting up in the programme board and the advice that then comes forward to Ministers as well. And so—

And just to confirm, Deputy First Minister, the role of wildlife in respect to TB is within the remit of the TAG?

Yes, indeed, they're looking at the role of wildlife as well. Look, I'll come back to the point, which is: there is strong scientific consensus that the primary vector of TB transmission is cattle to cattle. However, what they are looking at is the overall evidence base. And just to say, of interest as well, if the committee hasn't looked at it yet, it's worth reflecting on—and I was saying to Richard, we're hoping to try and get a meeting with the author—

Sir Charles Godfray.

—Professor Sir Charles Godfray, on his report, because that's been interesting in this space as well, because some of the conclusions that he came to in his report—which he presented, by the way, at the TB conference in our TB centre of excellence in Aberystwyth—are really interesting and they do touch on the wildlife aspect, but they do make the conclusion that the UK approach to the overall TB strategy tends to overestimate the wildlife control element, and actually downplay the issue of things like biosecurity, cattle movements, and all those. So, there's some interesting stuff going on over the border, analysing what's going on over there, and I think one of the lessons is not just what we're bringing forward in the technical advisory group and the position paper they're going to bring forward, but how we learn lessons both ways across the border as well about the way forward.

Okay. Thank you. Moving on to the sustainable farming scheme, can I firstly thank Gian Marco and his team for offering the briefing to Members yesterday, as well as the chief veterinary officer’s team for the briefing on bluetongue that was held yesterday as well? The economic impact assessment was released yesterday, the last day of September: a 5 per cent reduction in livestock, a 4 per cent reduction in jobs, and a 16 per cent reduction in farm business income on the universal tier. Are you content with that, Cabinet Secretary?

I'm very content that we've released, as we said we would, the full information and business case and economic analysis in the round, in context, and in September. I appreciate it's the last day of September, but it's in September, as we said.

It was in September.

And there's a good reason why we've properly brought it forward all together, bearing in mind that we actually launched the scheme a week before the Royal Welsh, and farmers have had a good chance to look at what it means for them individually as well, which I've been quite reassured by. The reason we brought it all together—. There was work to do over the summer, by the way, as well, because there was some update to some of the ADAS work that had been done to make sure it was all up to date. I'm glad we brought it together, but can I just make clear, because some people have leapt to assumptions that this automatically means job losses, automatically means displacement or lots of livestock numbers—just to be crystal clear, this is good economic modelling, good business case analysis, whatever, but these are scenarios, not predictions. It is modelling, not actual, not real-life decisions that real farmers will make on their farms, Chair. Because farmers will—

If they're led down that way and incentivised down that way by the package that's available, then obviously that incentivises those decisions to be made, does it not? I accept that farmers would make the decisions themselves, because they're individual businessmen and women, they are. But if the incentive is pushing them in that direction, a bit like retailers have nudge products, then obviously that's what the impact assessment is dictating—that there will be a loss of livestock, there will be a loss of jobs, and there'll be a loss of economic output.

There's nothing in this, in what we released yesterday, that says, or a line that says, 'There will be a loss of this many jobs.' We've had people leaping, extrapolating, pulling out individual parts of the analysis and then multiplying that up to, 'This means so many jobs lost or so many cattle displaced.' The real-life, real-time decisions by real farmers could be different, because there is flexibility within this scheme. This is not a lockdown rigid scheme; there is real flexibility, and I'll bring Gian Marco in in a moment. I've heard figures of 1,000 jobs, 2,000 jobs bandied about in the last 12 hours. None of these figures appear in the information we published yesterday. It's trying to turn what is quite a complex presentation of modelling into something that is simplistic and soundbites, and it's not really helpful, I've got to say, to really serious debate.

From what I've seen over the summer, when the ready reckoner was launched at the Royal Welsh Show, and the conversations I've had over the summer where people have put their own farm data in, I've been really reassured, with people saying, ‘We think we can make this work. It's not perfect, it's not ideal. They're asking us to do a bit more here for the taxpayer money going into it. But we think we can make this work.' I've heard that conversation again and again and again. So, actually, what we shouldn't be doing here, as my appeal to people is—. We've still got work to do, by the way, on the optional and collaborative. So, what we produced yesterday is based on assumptions that go into modelling—these are assumptions, not predictions. We have not yet done all the work, which we're doing at this moment, on the optional and collaborative, which is additional funding of many millions of pounds that can be brought into those farms' incomes. So, people who are leaping to figures of 1,000 jobs losses or 2,000 are ignoring the flexibility in the scheme, ignoring the work that we're currently doing on the additional quantum of funding with the optional and collaborative, and some people are leaping to some fantastical conclusions here and ignoring the reality.

I'd challenge that, Deputy First Minister, because the unions have raised concerns around these figures as well. If you cast your mind back to the 5,500 wellies that were on the footsteps of the Senedd, those were the 5,500 jobs represented to be lost in the previous iteration. So, it's a clear conclusion that, if it's an approximate halving of the impact, then that's approximately 2,000 jobs. This is working off the basis of £238 million in the universal tier. We know from your statements that you wish to see that £238 million in the universal tier decrease in years two, three, four, et cetera, with an investment into the co-operative and the optional tier. So, the assessment could be, in year two, these figures could be worse on the universal tier, could they not?

No. I disagree entirely. Let me just say, under the BPS scheme, the existing scheme, which some people are advocating we go back to and we start again, there have been 3,000 jobs lost in agriculture between 2020 and 2024. The status quo is untenable. It is a disservice to farming in Wales. So, those who are advocating we do not move forward with this sustainable farming scheme—which is designed to actually improve the viability and productivity of Welsh agriculture, as well as, unashamedly, actually dealing with issues of climate resilience, for the good of farming, as well as wider Welsh priorities, to actually improve animal welfare, peer-to-peer learning, mentoring, to actually improve the quality of our soil, our rivers, and so on—if people think we are going to step backwards into BPS and a previous form of agricultural funding that didn't have this holistic approach, it is a disservice to farming. This is designed to actually improve the viability of businesses and the wider sustainability of farming. We've lost 3,000 jobs, Sam, under the old BPS.

But, to be clear, no-one in this committee has advocated for a return to BPS this morning, or, from my understanding, ever. You mentioned the job losses that have occurred under BPS because there's been no increase in post-European Union BPS payments from the Welsh Government in that time. So, you're advocating for a policy that sees job losses—with these statistics—but just slightly fewer job losses than have been seen from a BPS model.

I'm going to bring in Gian Marco in a moment, because some of the assumptions in this model are assumptions that lead us to conclusions. We could have put different assumptions in there. We could have put assumptions in there that would have come out with very different information. I think it's right that we produce the modelling. It's modelling on scenarios. We do not accept at all the case that's being made that there is an inevitability of job losses. What we will do, absolutely—and this is the call from the farming unions—is to continue the work that we are doing and the work that we've done on the ministerial round-table, and to keep that engagement going.

But can I also say there is an argument we haven't heard from this committee today, which is being put forward by the environmental non-governmental organisations, which is that we need to get the balance right here? If this is a sustainable farming scheme, which is to do with viabilities and good food production, and so on, which I've always made clear it is—but it is also to do with farmers playing the role that the best farmer in Wales already does, which is clearing up our rivers, improving the soil quality, avoiding run-off, helping with flood alleviation, helping with climate resilience for the good of the farm as well as this—then we need to do this in the round. So, bear in mind there are other voices out there who are also saying we need to progress on this, we need to get it right. And I haven't seen, by the way, any of the farming unions saying, 'Scrap this scheme'. What they've said is, 'Keep on working with us, adjust it, tailor it'.

One of the things we have built into the scheme—and I've been clear with this committee and others all the way along—is we haven't put a scheme that is cast in aspic, can never flex. We've built a scheme of which the fundamental pillars are absolutely right. It hasn't satisfied everybody, but the fundamental pillars are right. We're now working on the optional and collaborative, which will bring additional value into farms, and for biodiversity, and for wider climate resilience. That's the bit that we need to work on now as we get to the launch on 1 January. So, be under no misapprehensions: we'll keep on working with all of the stakeholders out there. We hear some of the concerns that have been reflected, based on the presentation of the business case, and the economic impact, and whatever. That is modelling. I do not accept the argument that says this automatically leads to x number of job losses, because I think real farmers, in real fields, will make very different decisions. I've had farmers say to me, Sam, 'We've got parts of our farm where the biodiversity is pitiful, where the nature is not happening', and, actually, that needs some grazing animals, of the right type, on that patch of field. We've never—

And I've had farmers convince me that they will not be joining this scheme; it does not work for them. They will increase productivity, they will look to not do everything that this Welsh Government wishes to do, because the scheme doesn't work for them.

Well, I've heard the opposite, and I'll tell you where we have real overlap in the aims between us and the farming unions. Faming unions have a real focus on productivity—I agree entirely. And that productivity comes from doing the right measures that are good for the animals and the type of grazing that we have, and it also comes from things like soil testing and soil improvement. That's where the productivity comes.

So, what I want to avoid is anybody doing a disservice—I'm not saying this to you Sam, right, directly—anybody doing a disservice to the farming community. I am utterly convinced, as are, when we launched this in July, the wide range of stakeholders, that this is the basis for the future of sustainable farming in Wales, and we need to move ahead. We need to keep on working on it, keep it live, keep the discussions going, because of the way of working underpinning it. But this is absolutely the right model. It is not a piecemeal model, like is happening in other parts of the UK. It is a whole-farm approach, and it is a social contract between the people of Wales and the farming community, to say, 'We will do the the whole of this', but we'll keep on working at it.

In fairness, Deputy First Minister, you've given a passionate defence of it. I know you want to bring Gian Marco in, but I've also got two supplementaries, one from Luke, one from Jenny. Do either of you want to make a point before Gian Marco comes in, or do you want to listen to what Gian Marco has to say and then contribute?

I'm happy to put my question in now, and Gian Marco can reflect on it. We can't force people to do regenerative farming, and there may be job losses, in one aspect, if mechanisation is a more efficient way of doing things. But there are also many other things that we're not doing at the moment that we need people to do. We need to be able to feed our nation, not just export, and I just wondered if optional and collaborative were sufficiently attractive to excite farmers to diversify and start growing food for their local schools, for example.

Yes, I think in the SFS, alongside some of our specific interventions, such as the two levels of funding within horticultural support—the small grants funding, but also the higher level investment, which go into things such as processing, splicing and dicing, storage and so on—we've got real opportunities. But it does align with the SFS, because the SFS is designed to actually increase diversity within our livestock, but also our wider food production as well, including horticulture. So, I think there is real scope.

But you rightly flag that this scheme is trying to do really good food production in its wider sense, and it's also trying to do a lot of other whole-farm approaches that are good for that productivity and food production, which we should be proud of in Welsh food, as it's a success story, but also those wider environmental gains as well. And I keep coming back to this point: we're not trying to bolster the environment and climate resilience just for the sake of it, although we need to, heaven knows; it's also for the good of farmers. Because, if we get that piece right, then there is less input, less high-cost, oil-based inputs, and more, actually, farming that is in a circular place within the farm itself. And there are also things like the right shelter belts, the right trees in the right place for shelter belts for cattle, that increase the productivity of them and enhance their animal welfare, so when that animal goes to market, you get more money.

You don't have to persuade me, but the point is how we overcome the naysayers to ensure that people are hearing the needs to do other things as well as what we currently do.

I think that's been a big advantage of not just the ministerial advisory group, but also the officials group as well. We started from the basis of, 'Are we all agreed we need to take this approach?', and including the optional and collaborative. I recognise, Sam, what you're saying, that there are some at the moment who are pushing back, who are saying, 'Well, the optional and collaborative need to be entirely into a line of thinking that is to do with'—. I'm not saying, 'Make it almost like the universal layer', but there is a strand of thinking from some out there who are saying, 'Just give us the money for food production.'

Actually, there is a wider piece within this that I think this committee is also interested in, which is to do with—. If you look at the collaborative level, for example, at the stuff that we've already piloted in this—so, the integrated natural resources scheme, the farmers working together on a landscape scale, or the Ffermio Bro, which is going great guns as well, where the national parks and designated landscapes work in their areas with farmers on a spatial basis to get those wider improvements that are also good for productivity on the farm, but are also good for nature and biodiversity—that's where the gains come. That's why, Sam, many of the environmental groups are saying, 'Well, okay, we understand why you've protected £238 million in the universal layer, which gives the continuity.' Future Governments will have to do what future Governments can commit within their budgets. And everybody will make promises at the moment, but it will be for future budgets for now. But there is a real expectation within those optional and collaboratives that that's where the wider gains come as well.

So, that's the discussion, and that's the tension in the policy, but that's the discussion as we go into the autumn. There are a lot of people in the wider nature and environmental space who are saying, 'Okay, we can see why you've protected that universal layer, 70 per cent of the funding going into that, but what happens going forward? Where's the bang for the buck for nature and climate?' Sorry, Gian Marco.

No, not at all.

Luke, did you want to come in?

Yes. I've got two areas I'm going to ask, but if I ask one area, because perhaps that's probably, then, for Gian Marco—

We will bring you in, Gian Marco.

Your list of things to reflect on is growing massively. But if I just go for the first point I wanted to make, at least, anyway. We focus a lot on those job-loss figures that Sam points to, but one of the things that I picked up on were the figures around farm income as well, and one of those figures is an 11 per cent drop in farm income.

I've reflected a lot on what the Deputy First Minister said and, of course, what the farming unions have said. I don't think anybody is really wanting to start from scratch on the sustainable farming scheme. I think, actually, that fills a lot of people with dread, that you go back for another few years of negotiations and discussions. But he's right in what he's saying, that there a number of people who are looking at this and saying, 'Right, okay, we can make this work.' Sam is equally right as well in saying that there are a lot of people who don't think they can make this work. I think what people are looking for is assurances that the Government is at least willing to look at, 'Okay, how do we, for example, address that income gap that's coming, potentially, down the line for some people?'

So, on that point, I'll pass back over to Gian Marco, so he can finally come in, but I would like to come back on a second point afterwards, if that's okay, Chair.

Yes.

Yes. I mean, my—. The answer to why we've got confidence that this scheme is the right scheme and that some of the modelling is genuinely not predictive of what will happen, I think, is a complex one. And I was glad—. And thank you, Sam, for saying about the briefings that we gave. I think we can probably write to the committee with the a to z, if you like, of why some of the assumptions, some of the workings out, will not translate into actuality in individual farms, but also across the piece. But, Gian Marco, please, pick up on this—

The floor is yours.

—and sum it up.

I feel like the expectations are high. [Laughter.] Diolch, Cadeirydd. To be honest, the Deputy First Minister has covered a lot of the bases. I think one of the things I just wanted to emphasise was coming back to a point that you made, Chair, about the incentives. And I think, when looking at this information, what you'll see is that a lot of the drivers of the modelling outcome—or, you know, the possible outcomes that result from the modelling—come from the habitat management assumptions.

So, for simplicity and the ability to run the model, the modellers have had to assume that every farmer will follow the guidance on the different types of habitat. Now, we have deliberately moved away from prescriptive stocking rates for habitat types to guidance. So, we do exactly what the Deputy First Minister has said: we allow farmers the ability to manage those habitats and to manage the stocking levels and the grazing based on outcomes we want to see achieved, rather than prescriptive levels. Unfortunately, you can't take that flexibility into account in the modelling. But if you did, then it would almost certainly mean that some of the estimates around standard labour requirements and some of the estimates around farm business income are overestimates, because farmers will take those decisions based on those outcomes, rather than on prescriptive stocking rates.

So, I think it's really important to just emphasise that the scheme, through the collaboration that we've taken forward over the last 18 months or so, has really moved into that space that allows farmers as much flexibility as possible to meet the requirements, recognises as much as possible some of the benefits of actions they've already taken, and allows farmers to look at the scheme in the context of those wider benefits that you mentioned, so the links, potentially, to some of their commercial contracts. There may well be benefits in being in the scheme because that might assist farmers with their commercial contracts. That's why we're very keen just to stress some of those limitations.

And just very specifically on the jobs, none of the ADAS reports talk about job losses. They deliberately talk about standard labour hours or standard labour requirements, and those are based, again, on assumptions about the number of hours that somebody might work on a farm. If you actually look deeply into some of the latest modelling, what it basically suggests is that, because it doesn't take into account some of the other actions that will be required because of SFS—so, soil testing, some of these things—what you're likely to see is that those labour requirements will, basically, even out across the farm. So, that's why you can't say 'standard labour requirement equals job losses'. So, those extrapolations to those numbers just aren't in the reports. That's why the reports don't talk about job losses. They didn't a year and a half ago, to be honest. So, it's just to make that point.

That's roughly 3,500 farms already.

Sorry to cut across, Gian Marco. What's the value of this? If we're making assumptions on the worst-case scenarios, but we know the Habitat Wales scheme is having farmers do some of this management, what's the value of this?

The value of this, the importance of this: one is transparency. I think we should put out where the modelling shows, what the modelling shows. But the other aspect is that some of the work that was done in the run-up to this, before we published the whole thing, some of this actually helped inform the design of the SFS. So, how do we put in place flexibility for farmers to make their decisions on the farms? How do we take account of things such as 3,500 farms already within Habitat Wales? So, they're already doing some of the actions. So, some of the work that's been done on the modelling in the run-up to this, before the presentation, has helped inform the design of the SFS. That was always the intention. So, that's the value of this, but it is not a prediction. It never was, never will be. There's real subtlety and nuance within this, on some of the assumptions, on some of the—

Just to give you an example, the example I gave on habitat, part of the reason we've moved away from the prescriptive stocking rates that we had, for instance, under Glastir, is because, to a certain extent, we recognise that that would have, potentially, a negative impact on livestock numbers, and the right thing to do is to provide the outcomes that we want farmers to meet and allow them the flexibility. And that came out through the discussions at the round-table as well, so I won't say that the economic modelling was the sole driver, but it was part of that thinking.

The only other point I would make comes a little bit to the point you were making earlier. What this has allowed is the development of a business case that has given Ministers the confidence to take that investment decision.

Absolutely.

So, it's given Ministers the confidence to say or to make the commitments that they have made on budgets for 2026. So, the business case, in a way, is the document that tries to bring all this together and says, 'Overall, there is enough information to suggest that the SFS will be better value for money than BPS', which is the counterfactual, 'and will deliver more societal outcomes', and therefore has given the confidence to Ministers to be able to make that commitment.

But, again, if you look at the business case—and this takes us a little bit into the 'future years' discussion—it does justify a high level of social value payment in the universal partly as a way to get more farmers in, so that they can take up those optional and collaborative actions, because the business case is clear that that's where you get your biggest return on investment. So, there is absolutely a focus, as there has been for the last few months, but certainly going forward with the round-table, to look at those optional and collaborative actions to make sure they cover, not just environment and climate, but also productivity, those things that farmers want to do to improve economic efficiency.

As is ever the case, the clock is nearly beating us on this. Luke wanted to come back. But just for clarification, the impact assessment that was released yesterday is a partial impact assessment, and it doesn't capture downstream jobs in the processing sector, for example. Because, obviously, if you've got less livestock, then there's a smaller processing capacity, and added-value capacity potentially takes a knock because it hasn't got the product to develop into foods that would sit on the shelves and the tables of the consumer. That's correct, isn't it?

That's correct, based on the assumptions extrapolated from what we produced yesterday. But I come back to that point: the estimated reduction in livestock units within what we've brought forward will not necessarily happen. In fact, it's likely to be an overestimate, Chair, because the model is based, for example, on 100 per cent uptake. That's probably not realistic. The report assumes that habitat management stock rates are mandatory, which they are not in most instances. It doesn't take into account the flexibility for farmers to actually adapt different ways of grazing and use of their livestock. The modelling is based on a 2019 baseline, which was for consistency with what had come before, but people have asked me, 'Why did you use the 2019?' Well, it's for that consistency, so that people can genuinely see the through line.

I take the point—

And all those farms already delivering this—the 3,500 within the Habitat Wales scheme—. So, the leap of taking something from within modelling to saying that this has all those downstream effects, well, first, we have to counter that and say, 'Well, that is not a prediction.' But, secondly, all the other work we're doing, which we've talked about previously at this committee, in supporting the value added within the production chain—including with primary producers as well, but all the way through—counters that, because if we can actually maintain not only the throughput, but the productivity of the animals, and the value added, then we increase money going into farms, and post-gate production of that as well.

Thank you, Deputy First Minister. Luke.

Diolch, Cadeirydd. The elephant in the room in all this is funding, isn't it? And I'm just thinking now about back when we were told, 'Not a penny less from the UK Government', around the funding we'd have post Brexit.

Oh gosh, yes.

We were all part of that debate and disagreement with the UK Government, as it was then under the Conservatives.

So, my question, really, is about that funding element. We know that the funding has been Barnettised from the UK Government. What sorts of discussions has the Welsh Government had with the UK Government around returning to, or at least trying to replicate some of those traditional funding models around agriculture, so that we then get back to the place where the funding is proportionate to the size of industry within Wales, rather than that Barnettised formula? Because, for me, that seems to be the elephant in the room, I think we can all agree. So, how do we get back to that position?

Look, genuinely now, I know you and I will share views on—what's the way of putting this—the misinformation that circulated around that time, when we were told, 'Not a penny less', and so on, but I think that ship, in some ways, has sailed. It really has now. So, what I've been trying hard to do within Welsh Government, over the last 18 months or whatever that I've been in post, is make the argument strongly, in this transition period, for a continuation of the BPS over the last couple of years, often at risk, and arguing hard within Cabinet. And then, for the period that we can see going ahead, making sure that we have the quantum of funding that will allow this transition, as we roll out the SFS in January.

I know some people have said, 'Well, can we argue for longer?' But I can't argue for longer, because we are going into a period where we'll have new budgets—. Well, the UK Government will set out its budget in November, maybe we'll have some great news in that, I genuinely do not know; nobody knows what the Treasury is going to do. But also we will have to set our own budget then, going forward into the new year, on which we'll be looking for support across the Chamber to actually take forward. This is integral to it, by the way. This is integral to it, because if we don't have a budget, we don't have that money for the farming community. I just want to make that crystal clear.

But I've argued often at risk within Cabinet that we need this. It's for the sustainable farming scheme, and it's for it in its entirety, including those optional and collaborative layers. So, it's not just the £238 million; it's the £102 million on top of that, and then where we go from there. Future budgets will be for those future Governments to determine. I would love to get to the point—I've always made clear to this committee—where we can have multi-year settlements. We're not quite at that point at the moment. But I would love to get that point, because then that really does give certainty to farmers.

I've given as much as I can, but we need to get to the point where we can say, 'Don't worry; for the length of this Parliament, we can give you certainty.' Beyond that, we're just not quite there yet. But I don't think we're going to get back to that situation where a UK Government suddenly says, 'Let's go to the old EU approach', or whatever, or, 'We're going to make good on Boris Johnson's commitments.'

I think it's fair to say that the Barnettised nature of the funding coming down from Westminster is always going to have us on the back foot, isn't it? We won't be able to have that multi-year commitment on budgets so long as that funding is Barnettised.

And rest assured, we've made those very strong arguments. We agree that decisions on agricultural and environmental support in Wales should be made here in Wales. We do not think that the Barnett approach to it is the right way to do it. So, we keep on making those arguments. I just don't want to give you an inflated optimism that we will win that, but we keep making those arguments, as do, by the way, other colleagues from the devolved Governments.

Jenny.

I want to talk about agricultural pollution regulations. We published Susannah Bolton's recommendations at the end of March. Why are some of these recommendations being identified as taking over three years to implement? The public are not there; they want the clean-up of their rivers and seas now.

Yes, and they don't all need to take three years. I just want to make that clear. What Dr Susannah Bolton made very clear was that some of the ways forward, some of the more, let's say, innovative, subtle ways forward—. So, for example, some are arguing that there are some things that we can do rapidly, and she identified those, and actually we've set in place a task group now to take these recommendations forward—short, medium and long term. The longer term ones were the ones that had more complexity. For example, some people are quite interested in alternative approaches to dealing on a catchment basis with water quality, where you have all the stakeholders bound into an approach that says, 'We will not just deal with riparian management'—so, the planting of zones that avoid run-off into the water, stuff within the SFS, curiously. So, we've prohibited now at the universal layer where a slope is over 10 per cent gradient—

Twelve per cent.

Twelve per cent gradient, sorry. There will be no bare maize planting, and so on, on those slopes. But if you were to take a catchment approach—this is one of the longer term ones—that use new technology, the sort of technology that they've been pioneering in places like Gelli Aur, where you have monitors that not only test ground moisture but atmospheric conditions, content within the soil as well, so you don't have to, for example—. Theoretically, but it could work. Then if you had a catchment approach with all the farms brought into this, you could actually do it by real science, live-time science, rather than a closed season on slurry. But that will not happen overnight. That sort of approach requires buy-in, investment, partnership and—

But also regulation.

Regulation. Yes, indeed.

Could you not have river protected areas as well as marine protected areas?

Yes. Very much.

So that anywhere near a river, you can't do a whole list of things.

Yes.

Okay. So, £158 million has been given to NRW to date to clamp down on people who are polluting our rivers. The worst polluters are the ones who have got large businesses, and they surely should have already, in their business plan, worked out how they weren't going to pollute the waters. How many prosecutions have there been to date?

I can't give you that off the top of my head, but I can come back to you on that.

Okay, but it's important because it sends a flag to people that they can't go on doing the wrong thing.

Yes, and one of the things that Susannah Bolton's work made clear—. Last week, I think it was, we had a river summit in Pembroke, and as you know, we've got major issues on the Cleddau, but it's not alone; many of our special areas of conservation are being most significantly impacted by agricultural pollution. This is not a blame game. We are improving the quality of our SACs. I think that we're up to 47 per cent in 'good' or 'satisfactory', but that means 53 per cent are not—let me make that clear.

The challenge that we laid down at that river summit is how do we take forward the work of Susannah Bolton but also the wider buy-in from all stakeholders, and that means the supply chain, some possible solutions that are to do with the capture of nitrates and phosphates and their use for commercial purposes away from where they're doing damage, but also regulation as well. Susannah Bolton was at that and took part in the discussions. We're clear that regulation—and she made it clear in her report—has a part to play, but it doesn't need to be blunt regulation and that you beat everybody with the same stick.

Where there are clear offences being done on a regular basis by something none of us would want to see, but businesses that are regularly causing damage, Susannah Bolton makes clear that there should be a targeted approach, where you target those areas where the risk is higher and where the offences are greater. That may mean that you can also then—. She doesn't use this phrase, but on a—. This is the wrong phrase to use, but where you know the impact and the risk is less, and it has earned recognition by farmers who are doing the right thing, then you can target your focus on those areas where the impact is greater and actually say to those other farmers, 'We can work with you in partnership on different ways'.

So, regulation needs to be really targeted is what Susannah Bolton is saying. We're keen to take that forward with gusto. In order to do that, we need all the stakeholders on side; we also need the farming unions to be with us. And, genuinely, I think there's good engagement with them on this. They've been very supportive of Susannah Bolton's work in its entirety, which means that there will be challenge for the farming community.

Okay, but realistically you've got seven months to clamp down on industrial-sized dairy and livestock farmers from doing the wrong things. When are we going to see the detail of the programme of works under development that will actually convince the public that action is happening to prevent this ecological disaster?

I'm pleased to say that we're already putting together a programme of work. In landing the SFS, we were very clear that we moved straight away on to agricultural pollution. My poor team here, Gian Marco and his band underneath him, are already working on it. We will do this collaboratively with stakeholders. It's not going to be a static programme—it'll change over time based on the work that we do with partners. We'll progress each and every recommendation.

Stakeholder engagement will include now the formation of a technical task and finish group, which was in line with recommendation 1 of Susannah Bolton's work. The task and finish group will be carried out, based on her recommendations, in a phased approach to the short, medium, long-term nature of the recommendation. I'll be issuing very shortly, Jenny, a letter, and that letter will set out the terms of reference, along with expressions of interest for people who want to be part of that task and finish group, and we need some real expertise within it.

There'll be a huge amount of technical work to cover, so we cannot do everything overnight, but there will be short-term things we can do. We need to manage this in a way that is cognisant of the burden upon stakeholders—so, thinking about how we do this lean and mean and whatever. Some of the technical work has already been initiated, by the way, in advance of the task and finish group, so we haven't waited. It can hit the ground running; we're already up and going.

I just wanted to squeeze in one last question. Perhaps you could write to us, just setting out what the strategy is for the next seven months—

I'm very happy to do that.

—and particularly how many people have been prosecuted and why haven't I read about it in the press.

In 2022, the UK Government announced that we were going to ban peat compost, because this is such a devastating thing. What is the Welsh Government doing and why aren't we going to do it in the next seven months? Because simply waiting for what the UK Government's going to do—. They were supposed to do something by 2024, they haven't done it, and now they're waiting on a private Member's Bill. It doesn't sound like the UK Government is taking this as seriously as it needs to. The public wants to see action this day. What is the Welsh Government going to do?

I can promise you that when we have that IMG, I'll be raising this with the Cabinet Secretary. We still believe that the best way to do this, the optimal way to do this, is on an England and Wales basis. We've repeatedly made clear and we've raised this in discussions and in letter that we want to see the most expedient way of bringing this forward. We're disappointed it hasn't come forward yet, because the Welsh Government is at a firm position.

I don't have a legislative slot, Jenny—I genuinely don't—to do this before the election here just in Wales. But I maintain that position, which is that it's best to do it in England and Wales. We're still working, at official level and ministerial level, to support the arm of the new Department for Environment, Food and Rural Affairs Minister to say that they need to pitch now, like I do, to the UK Government, with the Cabinet write-rounds in all of this, for that legislative slot to bring this forward. I don't know whether the private Member's Bill will be the mechanism to do this; I don't know how far down the pecking order it is.

Well, that was my next question—

I'm not sure that it's one of the ones—

Okay, but I don't understand why the UK Government isn't owning this problem and just getting on with it.

I think that's the solution. We know, by the way, from our discussions already, that UK Government is committed to doing this. What they've got to find, what they've got to persuade, if you like, No. 10 and everybody else, in the write-round in the Cabinet, is that they need an urgent legislative slot. We think this can be done and should be done very soon and it would have our full support. But I don't have a slot to do that. Amongst the other things we're doing, including—. Well, you know the heap of things we're doing on the environmental sphere at the moment here in Wales—that's taking our time. We're going to support the UK Government and DEFRA, in particular, in trying to secure that slot so they can bring forward the legislation. We want to see this happen; we want to see it happen as soon as possible, so I'll be raising this with Ministers, new Ministers now, building on the work we've done before with them and saying to them, 'You've got our support, we want to see this happening.'

Thank you.

Thank you. One final point, Minister, because the clock has beat us: at the end of the summer term you announced a task and finish group in response to a petition from the Monmouthshire and Brecon canal.

Yes.

There doesn't seem to be much information coming from that task and finish group; certainly, that's the information that's been relayed back to me. What is your expectation on that task and finish group reporting, and ultimately, its actions becoming a reality? Because I'm not sure whether you're aware, but some boat operators have already pulled 2026 bookings, in light of the fear that they won't be able to accommodate them because of the water levels on the canal, and that's an actual situation that's happening as we speak.

First of all, I would encourage those boat holders and commercial businesses to engage with the Mon and Brec canal and other stakeholders along there, because as you know, we've put £5 million of my stretched budget into capital investment in the pumping station. It's not an insignificant amount of money, but that gives certainty that that water supply can keep on going into the Mon and Brec. So, in the immediate future, that supply from that source is guaranteed.

What the task and finish group is set up to do now is to work through the very technical possible solutions to the longer term water supplies for the canal—none of which, by the way, are easy; none of which I suspect will come without massive price tags. But that's the work that they're engaged in, so it's no surprise that there's not going to be a sudden running commentary or reveal, because what we've tasked them to do is go away and do that work. And you've got all the relevant stakeholders on there, from the water companies, the Mon and Brec themselves, but also local authorities and others.

When they report, which we've asked them to do over the course of this autumn here to bring it forward, then we will have, hopefully, a set of proposals or options. The question then comes, Chair—and we come back to this and there's no hiding from it—if those options do identify solutions, and they're potentially costly solutions, then who steps up and does it? Because a lot of people, quite frankly, are pointing at the Welsh Government; can I just remind this committee and others that the Welsh Government is not responsible for canals? I say that as the former canals Minister in the UK Government.

There is a split of responsibilities here. I have responsibility for watercourses and waterways, but I'm not the Minister for canals. It doesn't appear anywhere in there. So, along that stretch, we have various partners. We have the Mon and Brec itself, we have local authorities, we have ourselves. I'm glad to say that the UK Government also is represented in the discussions that we are having. So, when the options are brought forward—and I want to be frank with people—the question is who amongst all of these then steps up.

Just finally, you're hoping those options will be with you by the end of the autumn, is it?

Yes. I don't have a specific date; I can come back to you when we write to you on other matters and say. But just to point out as well, you and I will have been looking at reports over the summer. The Mon and Brec has some significant characteristics within its canal that we need to address. There are several others. There's a handful of canals now in the drought situations over the summer in England that have shut significant sections of their canals. So, we're not alone in this either. I think they'll be facing the same situation of how do we deal with changes in climate, leakage issues, historical infrastructure, and who then has responsibility for it. That's the conundrum still in my mind, because a lot of people are saying, 'Why doesn't the Welsh Government, Welsh taxpayers step in from our budget and just solve the problem?' I think we need a slightly more nuanced approach than that, to say, 'Who around the table, if we can identify the options, wants to play a part in resolving this?', including, by the way, the Mon and Brec itself.

Thank you, Cabinet Secretary. Thank you, officials. The record, as I said in my opening remarks, will be sent to you. I don't think we've got Groundhog Day 3 next week; you've got a week off next week. [Laughter.] But thank you for last week and this week, in particular, coming in and engaging with the committee as you've done. Thank you.

Thank you very much.

Papers to note. Colleagues, everyone content? Yes.

Can I have a motion to move into private session, please? Okay. We'll go into private session.