Economy, Trade, and Rural Affairs Committee

With that, I'll go straight into questions, if I may. All Members will have questions to ask you, David. I'm very grateful for you for coming in to give us your opinion on our inquiry. I will ask you first of all, though, to introduce yourself formally and the organisation that, obviously, you represent, please.

Yes, I'm the executive director for UKHospitality in Wales. That's the trade body for all hospitality outlets, from cafes right the way through to the top hotels, and attractions and activities as well. And I'm also the chair of Food 7 Cymru, which is a relatively newly formed network of seven trade associations, in which we try to help farm-to-fork policy. And those trade associations are, besides our own UKHospitality, the Food and Drink Federation, the Welsh Retail Consortium, the Farmers Union of Wales, the National Farmers Union, the Association of Convenience Stores and Logistics UK.

Thank you, David. You're one of the key outlets for, obviously, Welsh produce reaching the market and the consumer. We're looking at trying to add as much value as possible to that Welsh produce. How do you think the Welsh Government has managed its initiatives since, obviously, the first initiative of this current Government came into existence in 2021? And do your members benefit from the supply of Welsh produce to support their businesses?

I think the growth of particularly the independent food production area has been tremendous in Wales, and I think that's testimony to the work that is carried out by Welsh Government's food and drink division. We work very closely—hand in glove, really—with key officials like David Morris and Richard Bond from Total Food Marketing and also Mark Grant from the sustainability side, and look at ways that we can help to showcase Welsh products. I see from a recent statement made by the Deputy First Minister that the programme is on course for achieving its goals, which, given that it slid through the COVID period, is quite an accomplishment.

But I think that is all relative according to the budget that is available to those people, who are doing, I think, really good work. That's an obvious consideration across the board with Welsh Government spending. We all understand the restrictions that exist on a Government, but it also has to be then applied to success and opportunity. It's almost a trite statement to make that, if a lot more money was made available, then we could do a lot more. I think that's a type of growth line that would be evident if more money was available. The more that was made available, the more that could be done.

Can you give us an example of where that money might make a difference then, if it was made available? Because, as you said, as a committee, we get people coming in here all the time asking for more money—it's almost a given. But where would that make a difference?

I think you've got to look at several components. The obvious one is marketing, and that applies directly to the visitor economy work as well, with attracting visitors to Wales. Where you have more money on marketing, you have more opportunities to demonstrate the benefits of the work that's being carried out underneath that on day-to-day work. But I think also that there are areas where businesses could be assisted further, where growth could be gained, if grants were able to be extended, for instance, further into those areas. There are a number of success stories already in Wales. You can think of instances like the yoghurt manufacturers that became a national name, and others. But to transition from smaller businesses into substantial businesses is quite a big jump, and that's where financial support, and other support—advice support—could be useful in that area. But, overall, the goals, according to the statistics—and we rely on those—seem to have been achieved. In terms of our industry, we do strive to be able to use as many of the local products as we can. There are clear restrictions on that, and I think we'll probably come into why there are restrictions on that in further questioning. So, I'll end that—

So, from the strategy point of view, from your organisation's view, it has been a success, and it has delivered on its objectives. However, more money would be required to, obviously, up the marketing offer. That's self-evident in any marketing operation, because, obviously, the more resource you have, the greater presence you have in the marketplace, then.

That's clearly the case. We are up against quite considerable opposition. I haven't got the detailed figures, but my estimation would be that the Welsh food and drink initiatives have got probably a twentieth, for instance, of Ireland's resource, and we are fairly close neighbours, with reputational similarities, if you like, about food production. In fact, I think we've got a lot more going for us here because of the nature of the type of products that we've got and the great farming industry that we have in Wales, which has earned geographical indication status and is renowned throughout the world now as the premium producers. So, when you put that together, it's a shame that we haven't got quite the same firepower. I do understand—I'm fully aware of the needs of things like health and education, other areas of the budget. But that would be my first port of call, really, and I think the same would apply for the visitor economy support as well.

Jenny, a supplementary.

Given that many of the members in Food 7 Cymru have had record profits this year, why wouldn't they want to be investing in improving the availability of local produce that they put on the shelves, given that they know that consumers want to buy local where possible?

Well, I'm not convinced that the members of Food 7 Cymru have made such substantial profits—

Some of them.

I mean, we do have two farming unions involved. They are also not necessarily directly related into the Welsh economy. There would be some bigger employers that would be making profits, but they would be on a much wider, UK basis, and so we'd be looking at percentage increases into Wales, I would guess. But, overall, we certainly have a lot of people within that food production system, and people who the system relies on, like my own industry, which is going through an absolutely diabolical economic time. There's no scope at all within our industry for being able to do that, and I feel that some of the opportunities are missed as a result of that position.

Jenny, do you want to—

No, no. I'm fine.

Do you want to lead the questions, then?

Oh, okay. Fine. Yes. So, just going back to the hospitality industry—we rather grazed over the landscape—to what extent does the hospitality industry require Welsh or local produce, and what are the potential areas for growth?

Well, it's sort of a strange question, really, because we—. 'Require' is a difficult word. What we obviously need is food and drink for customers. Now, where we get that from is dependent upon two things, really: it's on supply and on cost. Now, with the best will in the world—. We all recognise that there is an added-value benefit to using local produce; I think the whole of the industry in Wales is hugely supportive of local food producers—really supportive—and works as closely as they can with them, and, in many places, does some fantastic work, and there are some that pride themselves on it, and, if you like, it's a niche area that they're able to attract customers by. But there's an awful lot of other providers that are in the competitive marketplace, and, as a result, they have—. You know, they're competing against other people who are price sensitive, and, particularly in Wales, we've got price-sensitivity issues. So, there would be a need for them to go to the marketplace and to find a food equivalent, if you like, that would be cheaper and maybe available on better supply, to be able to match that for their customers. So, what we need is the ability to be able to spread the word further and to see what areas we can do, to both supply and to look at the cost base for Welsh products to make them competitive with every outlet in Wales.

So, last weekend at the Abergavenny Food Festival, obviously we had the rock stars of the food industry there.

And me.

Sorry?

The rock stars of the food industry, and me; I was there as well. [Laughter.]

And me, and the First Minister, and a lot of other people. But I was astonished that a niche Abergavenny restaurant were talking about where they got their produce—and they were very much all about sustainability—and they talked about getting their fish from Devon and Cornwall. So, I asked the question: why aren't you sourcing your fish from Wales and the Chesapeake Bay, which David Melding always talked about, of Europe, which is on our doorstep? So, what needs to be done, and by whom, to start to see Wales and Welsh industry, including your members, from benefiting from this resource?

That's a really tricky question. I'll tell you why it is. If I could ask the committee: when was the last time, or—? Have you had a whelk this year to eat, for instance? And I could also ask you how many prawns you've eaten in the last month. And that is exactly the problem with the Welsh seafood industry, that we produce a lot of a type of seafood that local people don't want, particularly, to buy and eat, and the things that they do want to buy and eat we don't produce, because the waters around Wales are colder, in the main. Sea bass is available for those that want it, but, then, if anybody wants to buy other fish, that becomes imported as well. So, there's an exchange here, and our industry—and I'm talking about the hospitality industry—is customer-led all of the time. We can try and change those perceptions and attitudes by looking at some menu changes—and many people do that in order to heighten use of local product—but in the main, there is always a demand from customers. And that's exactly what we have in the same issues to do with things like diet, food, health, nutrition; when they occur on menus, we're still led by people wanting to have certain sorts of foods when they go out. So, I think that's one of the things.

The other thing is that there was a session, which I was involved in at Abergavenny on Saturday, in which restaurants that pride themselves—I mean, Owen Morgan was on the panel from Bar 44—pride themselves on using local produce, and do it really well, and they have a fantastic offer, and they're absolutely hammered at the moment on cost basis and it's a hand-to-mouth existence. So, if you want there to be more leeway for restaurants to be able to push the boundaries of local food supply, then there has to be assistance somewhere about how those imposed cost areas are actually dealt with, where Government are doing that. There are a number of those that our industry is receiving this year that are causing compression of not only profitability, but actually it's about survival. And that's something that I'd very much like to mention as we go on to some of the other questions that you've got.

Okay. I just want to focus on vegetables before we move on, which is—. Clearly, restaurants want to be able to have the whole plate sourced from Wales as part of the offer to visitors, tourists, as well as local people, but how are your members—? What do they report that the barriers are to actually getting local vegetables and fruit, and what do we need to do to big up the processing industry to make sure these are available?

Some of that, I would suggest, is part of an answer from people like the Food and Drink Federation; I think you've already—. Because they'll be knowing the ins and outs of their manufacturing areas, but it's back to the simple area of supply. We can only grow certain things here, and—

In polytunnels, we can grow 12 months of the year.

But you can't do alternatives, and I think that's what—. Our people are very creative and that's what they do and they try to do, and they try to use local food where they can and to replace food with other alternatives, but it still leaves gaps in the menu. You can't supply everything from local sourcing.

Okay. So, do your members discuss this with local producers and say—

All the time. All the time, they're talking to local producers and suppliers. And the inventiveness of the people who create the menus and the different recipes is tremendous, but there still would be gaps that have to be filled in other ways.

Okay. Sam.

Thank you very much, Chair. Just coming back to the point around encouraging the use of Welsh and local produce, and you've mentioned some of the issues there. Where's the room for improvement on it? Is it labelling? Is it in menus in hospitality? Is it the knowledge of the customer? Where do you think there's room for improvement to ensure that there is better access, not just for the businesses purchasing the produce, but the consumer purchasing it through hospitality businesses?

There is some scope, I would imagine, for the providers, the producers, to be able to make more potential outlets aware of what their product is and what it can do. And in the same way, from the other way around, I would guess that some of our businesses could possibly do more in terms of searching out maybe new opportunities that occur locally. But I think they're pretty good at that and I think they're very strong at putting Welsh products first on menus. We do understand—. And, in fact, it's one of my particular passions that I think we are a great food and drink nation, and I don't think we promote that strongly enough internally and externally, and encourage customers to search down those different tastes. But there are, no doubt about it, more and more people who are searching out, visitors who are searching out that experience.

So, in terms of some of the wholesalers we've got in Wales, where a lot of your hospitality businesses will be purchasing their products from, are they doing a good job in advertising Welsh-specific produce? I'm thinking of your Castell Howells, for example.

Yes, yes. I think they're doing a great job, and their expansion has been a signpost of the symbiotic relationship between our two sectors, if you like, although they're really part of it. And it didn't go amiss that they lost something like, I think it was 80 per cent or 85 per cent of their business when COVID happened and we were closed. So, it's very much interdependent on that. And I think Castell Howell is a good example of people who are innovative and trying to introduce as much local product as they can into different outlets. So, it's about a growth of that type of local business involvement, I think, and probably developing the appropriate, stronger network of commercial opportunities to be able to deliver that, really, as we go along.

A lot of the producers are small, let's face it, and it is quite a quantum leap for many to go from the kitchen industry, if you want to call it that, into a much bigger production area. And maybe there is a reluctance to do that on many occasions, because that involves quite a commitment, and often it could mean that you have to put your property on the line, or you have to borrow heavily. In uncertain times, people may not want to do that. And maybe it's going away from their original intention of doing some of the work. But the encouragement and the advice and the resource to be able to help them to do that is something that, I think, would be valuable on a bigger scale, if we're looking at genuinely trying to put their products into as many outlets across Wales as possible.

And then just a final point, in terms of matching demand for a product that is wholly Welsh, are there any pinch-points? Is there anything that we could increase supply of, or as an industry need to look at getting more of, because it's incredibly popular? You mentioned the whelks. That's not hugely popular in the food industry in Wales. But is there something that is very popular and we just can't quite match it in our hospitality sector?

I don't think so. I think, to give an example, it's Atlantic Edge Oysters—

In my constituency.

—down in your neck of the woods. Jake and the team, they're fantastic people. I've used them in showcases. I did a showcase at the House of Commons, in fact, in March on St David's Day with Welsh products there. And we took those. Now, that was a clear gap that has been filled, for the moment. Hopefully, that will grow. That gives us a high-quality, premium product into areas where we can sell that type of thing. That's a fantastic initiative. Hopefully, commercially, that will work out. And that's been done in association with the food and drink programme and others. So, that is a clear example. We need more of that. We need more of those all over Wales, and we need more of that type of entrepreneurship, plus investment, plus support to be able to take it wider.

I think, when you talk about the hospitality industry, and I'm guilty, probably, as much as anybody, of not conveying the huge nature of the industry. It is an absolutely enormous industry. Across the UK, we employ 3.5 million people. And in Wales, it's 165,000, and there's a big supply chain into that. And there are many different outlets of different sizes, different shapes, different business models, so you won't find a product that will satisfy all of that, because they're all different types of things. But there will be opportunities, particularly with things like the lack of indication of that, where it's a higher premium product. If you can get the supply right, then there's obviously great opportunity.

Okay, thank you. Thank you, Chair.

Just before I ask Hannah to ask the final set of questions, David, you touched on that you believed that there was an opportunity to exploit and promote the food culinary delights of Wales and what Wales has to offer, and you didn't think that was being maximised at the moment. How big an opportunity is that? Because, obviously, there's been a big expansion in recent years. As someone who's got a lot of grey hair on his head, or not so much on the top, but on the side, at one time it was pie and mash and a bit of pub grub, and that's about it. But the different pubs and restaurants and eateries that are available now are a credit to your hospitality sector. So, what opportunities are we missing?

Pie and mash is good, mind you. That's an essential part of our offer as well. My vision, and the reason why I was keen to help put together the Food 7 Cymru group, is that England is a fairly busy place; it's got a box of motorways and a lot of tired people who spend a lot of time in traffic. In just moving, let's say, 20 or 30 miles across to the west, you enter a haven of peace and tranquillity, where you have fantastic landscapes, a great visitor offer and wonderful food and drink opportunities, and it could be the case that you should be saying that when you cross the border, you're now entering a sort of food and drink heaven of some type or other, and trying to promote the whole of the national identity around it.

One rural affairs Minister a few years back described Welsh lamb as 'emblematic', I think, of the nation; I completely agree. It's the one thing that we can clearly indicate across the world as being the best premium product, and we can stand on that. That, on its own, is an amazing opportunity to promote, in the same way I feel that Scotch whisky is for Scotland, and around that there are plenty of other food and drink producers that are really pushing the boundaries and can offer great experiences, and our people can help produce that by showcasing them inside our great hospitality outlets, as you say, in many places.

There's been talk about the team Wales approach for many years, and about how we promote Wales. I think we should be promoting it around this fantastic food and drink offer, and pulling people in to enjoy not only the wonderful circumstances that they can enjoy food and drink in, which is the degree of tranquillity and fantastic vistas, but you also have this great experience wherever you hit a table.

Okay. Thank you, David. Hannah.

Thanks, Chair. You touched on the very real economic challenges facing the hospitality sector, and I think you used the words that it's not a focus on profitability, but survivability for many, and that has an impact not only on the businesses themselves that you represent, but the workforce that keeps them going, essentially. So, I wonder if you'd be able to share your views with the committee about how you would perhaps characterise the skills and labour situation within hospitality as things stand.

Okay. It would be good to share with you, if I can in a few minutes, a sort of global position of where we are. You're all familiar—very, very much so—with the implications of the COVID pandemic. Moving on from that, we've had the war in Ukraine and we've had budgets and all the other things impacting on the cost of living and energy prices, and our industry is very susceptible to that.

So, it's been reeling in that period and trying hard to match up the national living wage in many of my outlets, and I consider UKHospitality to have a lot of the higher end hospitality businesses. The national living wage has been met and surpassed by most of those outlets. The increase in wages is approximately 60 per cent since 2020. Because of the nature of the national living wage, that has put a lot of the resource into the younger people who join us, which is fantastic. That's caused differential difficulties with people further up the chain, who are not getting the same benefits of livelihood, because so much resource is going into that front end.

The cost side of things has gone mad. We've had national insurance contributions this year. One hotel in north Wales employs 80 people, and its NI bill has gone up £2,500 a week since April. So, there's an indication of that. What that does is if you imagine running a business being like a sandwich, then the bottom half of that sandwich has grown much bigger than the top half of the sandwich, which is the price return from the customer, and the middle bit of the sandwich would be the profitability. That's now become virtually non-existent in many businesses and it's become a way of making a living rather than being able to reinvest in the product and to take it up to the levels of quality that we would want against other competitors, whereas the bottom bit keeps getting bigger and bigger and putting more pressure on.

I would ask here for your help. The consultation has just closed on business rates. We are an integral part of town centres and city centres. That consultation is looking at particularly helping retail areas, which we're not against, but it's excluding our businesses. The impact of that is that, if we don't get a fair readjustment for our properties through business rates, we'll end up with us seeing rises in rates from next April that are worth nearly £7,000 to a pub, £15,000 to a big restaurant and about £50,000 to a hotel. That, on top of all of the other circumstances, will compress and possibly reduce our ability to carry on.

Some 89,000 jobs in hospitality have gone in the last 10 months across the UK, of 160,000 in the ONS figures. We've taken a hit of about seven times more than most other sectors. My estimation, because we can only extrapolate those figures into a 3 per cent percentage, is that if it was 3 per cent of that national hit, it would be more than the impact that has been seen in Port Talbot, for instance, and that's happening in places right across Wales and is continuing to happen every month. That figure of 89,000 will go up to 111,000 in October, when it's a year.

Thanks. I've raised the business rates issue in the Chamber with respect to the consultation, because I know from my own experiences in my own community, the reason why people go to those town centres now is because of the hospitality offer there, as opposed to the retail offer. But it might be something for the committee to think about as well.

Just going back what you said about—. I think that one of the things with, perhaps, traditionally—. Hospitality is quite a broad thing, really, when you think about everything within it. I think that one of the challenges traditionally is that it has been seen as perhaps a transient sector, something that’s seasonal, that people don’t go into for the longer term. So, I guess my second question to you is: how do we counter that balance? What can Government do more of to support the sector so then the sector is able to invest in the workforce to sustain it?

I didn't really answer the first part of your question because I got carried away on the cost side there, but seven or eight years ago we had really quite a messy arrangement around skills provision, and I helped to set up the Wales hospitality and tourism skills partnership, which we didn't have before, and that now exists. The Welsh Government sits on that, Visit Wales is the secretariat, and over the last seven years we've had a number of really good interventions, including really helpful support to enable us to do some recruitment promotional work, which was successful, and it relied on showing people within the industry, what they were doing and how well they did that.

We've also done some good work on the flexible skills programme through that vehicle. I'd ask for more resource, again, into that, but that would be a way of helping us. We're going through a period now clearly where we are losing labour, and that's because of the cost base. But there is always the need to retain good staff, and the skills programme that we're talking about has got capacity within that to help businesses to work harder to retain staff.

But also, we need to encourage more people to come into the industry as a longer term prospect than as a shorter term prospect. But I would say that most of the hospitality businesses that I work with are 12 months of the year round anyway, and they rely on your support every day as individual customers. In Cardiff city centre, for instance, many hospitality businesses open 12 months of the year and they're all part of that great city centre experience.

But while I'm talking about that, very quickly, if you go up Westgate Street, all one side of Westgate Street is hospitality. So, if you're really looking at how you can promote new city centres and develop city centres, you've got to incorporate, somehow or other, hospitality businesses into that system and the rating system, or there will be gaps. Again, it's another symbiotic relationship. I'm sure I'm not the only man that spends a fair bit of time in a pub waiting for some shopping to be completed, and that happens with my domestic arrangements, but if you go into a town centre, you're looking to encourage people to spend longer there, to go to more places in the city centre, to have a bigger, wider offer, and food and drink and hospitality is a major player in achieving that.

Just one final question from me, Chair—I'm aware of time. Moving to a different topic, we're focused within Wales, but have you got any reflections on how perhaps Welsh food and drink is viewed in the hospitality industry outside Wales? And is there potential, do you think, for growth throughout the UK?

I think there's a great potential for it. I think that goes back to branding. Again, I think Welsh lamb or Welsh beef have been very well branded and they are clear examples of, if you are interested in finding those products, they are in front of you when you go to appropriate outlets. So, I think branding is something that we can offer many producers assistance with.

We could combine more. From my experience of working with different organisations, it's quite often the case that there'll be outward-looking efforts, say, on the export market or on the wider promotional market, and that will come about from, say, a singular body doing singular activities. But we could often do more, I think, if we combine those up. Where people are going to international trade fairs, they could be incorporating other aspects of the food and drink industry or the hospitality industry with them. We could be looking at Visit Wales being part of food and drink expos to encourage people to visit, as well as to buy those types of foods.

We could use the private sector, where ICC Wales is doing great work in trying to promote both Wales and its own outlets. Maybe we could piggyback some other things on that that give a wider taste and a bigger experience of what Wales can provide. Because I think we've got great products. In one case, we've got a world-beating product. In many others, we've got products that are competitive or better than similar products there. And with the right assistance, whether it's resource, helping, training, branding or combining, we can do a lot more to realise that ambition that I raised earlier, which I'm sure you all would share. But I don't think it's so far removed that we can't be seen to be an international food and drink destination and encourage visitors on that basis.

Thank you. Thank you, David, for your evidence this morning. A record will be sent of the proceedings this morning. If you would like to have a look at that, and any observations, obviously, make to the clerks; otherwise, that will be entered into the official record as your evidence for our inquiry and that will greatly assist the completion of the report that we'll put together at the end of this inquiry. Thank you very much.

We'll now move back into private session, before we have the Minister in at 10:40.

Welcome back, everyone. It's now the final session of our evidence gathering into the food processing and added value sector that we've been undertaking over recent weeks. We have the Cabinet Secretary in and his officials. Before we go into questions, Cabinet Secretary, I'll do the usual form of asking you to introduce yourself and your officials and the positions that you hold for the record, and then we'll go into questions that Members will ask over the next hour of you related to our inquiry. So, if I ask Keith to start and then we'll work down the line.

Keith Smyton, head of the food division for the Welsh Government.

Diolch yn fawr. Do I need to press the button on these things?

No, I think they're automated.

Thank you, Chair. Huw Irranca-Davies, Deputy First Minister, Cabinet Secretary for Climate Change and Rural Affairs.

Bore da, bawb. Gian Marco Currado, rural affairs director, Welsh Government.

Thank you all. We've taken evidence that the vision that the Welsh Government brought forward has delivered on many of its goals, and that was brought in in 2021, but we've also taken evidence that actually what's required is a wider food strategy that takes in the true nature of farm to fork and everything in between that the consumer needs and the producer needs to get product onto plates. Are you in agreement with such evidence that we've taken, or do you believe that the approach that the Welsh Government has taken to date is adequate, and no strategy is required?

Thank you, Chair, and it's good to hear that you've had that feedback, because certainly, that's the feedback we have on the ground from right across the supply chain, with a fair bit of hard work, I've got to say, over a number of years now, but the vision has translated into real success: practical, tangible, actionable, demonstrable success, and I can go through some of the details with that.

The question that you then link to is whether there needs to be a strategy. Our argument in terms of a strategy is that there are places for strategy to actually pull things together, but if you look at the evidence that you've had that you've just alluded to and that I could go through in some detail, the tangible outcome of the actions that we're delivering, the question is what would a document called a strategy add to the sum of those whole parts, when actually, whether it's in terms of our exports, whether it's in terms of the healthy action and healthy eating plan in terms of nutritional standards, whether it's the community food strategy, whether it's the 'Food Matters' document that brings a lot of this together, the strategy is already there, the actions are being delivered. So, I guess the question back to you as a committee is: what does another strategy add to that when we are demonstrating success?

Well, it's not another strategy, Cabinet Secretary, because a strategy doesn't exist. This sounds like a Sir Humphrey conversation, this does—'a vision', 'a strategy'. The Irish brought in a policy of Harvest 2020 some years ago, and that brought everyone round the table and agreed the key objectives for the producers, the processors, the retailers and the hospitality sector, so that the whole agri-food sector could grow and meet the ambition that the Government of the day and the sector wanted to achieve for the agri-food sector. So, it's about bringing everyone along with that in an organised way to hit a target that has been set by Government. Now, you've got targets in the vision, but, obviously, it's not an all-encapsulating strategy document that would bring everyone along with it.

I would take issue with that because—. This is not me arguing against strategies because I dislike strategies. There is a role for strategic thinking. Equally, there is a role, then, for planning and delivery on actions that flow from those. Now, my argument would be that they are already in place. You were alluding there to bringing people round the table. We already do that. So, within the community food strategy, we are in the final stages, actually, of bringing together the ministerial advisory group on that. Now, that brings together things such as local procurement, local food networks, more local food landing on our tables, that sort of farm-to-fork thing.

We already take advice and engage with the supply chain, because we use things such as the market insight programme, and we then engage directly with the whole of the supply chain from producers through distributors, through wholesalers, all the way through to the major retailers on the insight programme. So, we do all of that engagement.

If you look at what we have there in terms of strategic thinking that is written down already, we can refer you to things such as—. This is the question with the strategy: what's that strategy? Is it an Irish strategy that focuses on, if you like, the producer side of it, or is it to deal with, actually, food distribution, hunger and shortages and issues around food poverty and things like that? Is it one thing to bind them all? What we have got are things such as the 'Healthy Weight: Healthy Wales' initiative, the healthy eating in schools regulation, the 'Food Matters: Wales', which bring together a lot of the aspects that you were already talking about.

We're engaging, by the way, with the UK food strategy, but just to point out, the UK food strategy aligns with much of what we are already doing through actions. So, we commend what the UK food strategy is trying to do. We think it'll align with what we are already doing. But if you look at aspects as well, such as what we're doing on net zero, the net-zero future approach, it's the whole, if you like, farm-to-fork strategy of how you work with the processing sector, the distributors, the businesses in food processing to help them head towards and seize the opportunities on net zero. But it's also what we do with the sustainable farming scheme and with farmers to actually build that climate resilience and work towards net zero.

So, in that whole approach, the new technologies, we have strategies on that. The innovation in the market, we have strategies, actions and deliverables on it. So, I guess I come back to the point of: what are you asking for as a strategy? What is that strategy there to deliver? And what more does it add to what we're already doing, which I would argue is a strong success story? Strategies have a place, but—.

Clearly, the committee hasn't formed an opinion on it. We just base our questions to you today, Minister, on the evidence we've received—

Yes, I fully understand.

—and the second point I'd like to put to you is, obviously, you touched on the sustainable farming scheme. Any successful marketing, produce and consumer-focused marketing needs a product to promote and obviously have access to. The sustainable farming scheme, in a previous iteration, had pressure points of constraining that supply of product. I believe the previous iteration of the sustainable farming scheme indicated a reduction of cattle numbers of 130,000 and sheep of about 800,000. We haven't seen the impact assessment, but we are promised that, obviously. If you could, in your reply to me, confirm that that will be with us by the end of September, which I think you agreed was going to be made available—. So, do you see the conflict that Government policy has with curtailing the ability to produce the product to meet the market that, obviously, we’re trying to grow and add value to the Welsh food sector?

Well, let me first of all answer your point on the bringing forward of the modelling, the scenarios, the economic analysis. Yes, it’s imminent, we’re going to bring that forward by the end of September, like we said. I don't know how many days we’ve got left now, but—

Tuesday.

When is it?

Tuesday next week.

Okay. We're working hard to do that, okay, so—

Will it be with us by Tuesday next week?

We're working hard to do that, we are.

Bearing in mind you're with us on Thursday.

I know, I know. Listen, we will get there. But you'll appreciate that what we're bringing forward at that point is scenario modelling, it is not the actuality of what you or any other individual farmer will do. Because when you look at—I don't know if you've done it yet, Chair—but if you look at the ready reckoner that others have been looking at over the summer, and you look then at individual business decisions, you will decide what you do with your livestock, with your headage, you will decide what you will do with the environmental payments at the universal level or the optional collaborative there. You'll make business decisions. So, what we'll be bringing forward is helpful stuff that has helped us devise the scheme as it is, but it is scenario modelling, it is not actuality. And I think it's important to really stress that, because you, like every other farmer, will make individual business decisions. But, look, it's imminent and it'll be, then, for everybody to look over it. But I would say to you, 'Look at it in the whole as well.'

The—. Sorry, the—

Well, the constraint on supply, because, obviously, if you drive down supply, there's no product to drive up—.

Indeed. Well, let me reframe that entirely. The strength of our Welsh food processing, food production, whether it's in the red meat sector or whether it's dairy and so on, is actually not purely in the production, it's the value added, and that's a big success story of us now in Wales, so—

But you have to have the product to add the value.

Yes, indeed. You do have to have the product and it's also to do with sustainability. The massive drive that we've had in export markets, but also the success we've had in putting Welsh produce in front of Welsh consumers and increasingly now UK consumers, and the success we've had in the European market, despite the challenges of EU withdrawal, have been based on a brand and an image of Welsh produce, not just the protected geographical indication status, but the overall brand that it is not just agricultural produce, it is sustainable, it is green and pleasant land, with high standards of environmental protection and stewardship, of animal welfare. It is very much based on the idea that we do something special here in Wales, and we do. Now, that is what is selling.

So, I understand that there will be a focus on numbers and livestock numbers and so on, but the focus equally has to be on sustainable agriculture, because that is our USP, that is our unique selling point. It's why we are exporting to the UAE and to other countries far away from here, and it's why we're exporting into the European market increasingly as well. That's our success. That's our unique selling point.

Sam.

Just to come back to that point, Deputy First Minister, around the ready reckoner and businesses making business decisions. If the context of it, though, is that they need to reduce their livestock numbers because that is what the business modelling is showing, that, then, as the Chair has alluded to, will have a knock-on on the products that are reared in the green and pleasant land, as you put it. We'll have fewer of those going through fewer abattoirs, fewer processors. Yes, the product will be of a high standard, but there'll be less of the core element of that product to start with, so it's unsustainable, isn't it?

No, it's not unsustainable, but you raise a very important point and it's not one that we are just wrestling with here in Wales, or even the UK, it's Europe-wide as well. And if you look at the trends not just over the last 12 months, but over recent years, there has been a trend decline overall in red meat particularly. Now, this is affecting everybody. One of the things that we do, including with things like the market insight programme that we do, but also the support that we put into producers, including, by the way, farmers, to get that value added—. Because for a farmer, it will be to do with numbers and they will make individual business decisions, by the way; they won't look at a scenario modelling that has been done by our experts, whatever, they will say, ‘What does it look like on my farm in Pembrokeshire?', 'What does it look like on my farm in upland hill farming in Ogmore? What am I going to do? What's the support the Government is going to give to do it, and how do I get the most out of the value of the animals on my farm?' How are they going to be more productive? When they get to the abattoir, is the abattoir adding value as well, so not simply processing the meat, but actually processing, packaging, branding and selling? If you go to somewhere like Maddock Kembery Meats in my place, the changes within that abattoir, which is in my home town—. If you look at the changes in that abattoir over the years, if you look at their social media presence, it is based on locally sourced, value added, the way it's packaged, the way it's branded, and so on, and that's good for the farmer.

But that abattoir will need the product to go through it, won't it?

It will, yes.

So, if farmers are making business decisions on, 'What am I going to do with my livestock?, if the context is such that—. And I'll bring on the question as well around the Climate Change Committee's 19 per cent reduction. If you're signing up to that, and I've asked you this in the Chamber before and you've given no answer or no commitment to it, you will see less livestock in Wales. Therefore, that abattoir that you're describing in your constituency will have less throughput. It can have the best social media presence in the world, but if it hasn't got the raw produce to put into the system, it's unsustainable.

So, look, from a Welsh Government perspective, we recognise the challenges. We don't have all the answers ourselves, by the way, in Welsh Government. This is a question of working with the supply chain as well. We do think that Welsh pastureland is particularly suited to the sustainable raising of livestock on that land. It's also important, by the way, when it's done well in a sustainable way, for the environmental benefits as well, and the soil and everything else. So, we agree on that. But there is a market trend going on. Now, the question for us is: how do we work with—not just Welsh Government, it's not just a question of Welsh Government—how do we work with the processors, the farmers themselves, the wider supply chain, to make sure that we have that stability, so that we can have that throughput coming through, not just with the small abattoirs, which are very important—and we have support available that I can go through in terms of small abattoirs and so on, and the innovation around small abattoirs—but also with the larger processors as well? We cannot ignore the challenge.

You asked me about the Climate Change Committee. The Climate Change Committee have put forward what they consider their balanced pathway. We know that there are major changes coming down the line here, major challenges coming down the line for agriculture and for food processing. What we need to do is do the whole of this, and in that, if you like, farm-to-fork approach. So, there are challenges here for producers, for farmers, in all their great diversity. There are also challenges for that wider supply chain, the processors and so on, and the individual food businesses. So, our support as Welsh Government is to work with farmers through the sustainable farming scheme and other support we do through Farming Connect—mentoring, peer-to-peer support and so on—to get to that sustainability of farming that does actually have not just the numbers of livestock, but good livestock that gives value to farmers as well, but also to work with the wider supply chain. And the stuff we're doing with, for example, the sustainability clusters—the tailored one-to-one advice that comes through HELIX and so on—is designed to also decarbonise the wider sector.

If you look at it, as we go into carbon budget 4—. By the way, it's for us to determine what the pathway is. The CCC set out the direction that they set and what they think. It's for us then, on our reflections across Government, to say where the challenges are. The big challenge will be in agriculture, it'll be in transport, it'll be in housing. And the further we go down from carbon budget 3 to 4 and on, agriculture increasingly has to carry its element. But there are ways to do this, it isn't all to do with livestock numbers.

No, okay. And I take your point on board of the UK CCC's modelled pathway being its preferred point, but at no point have you said whether you agree with it or disagree with it. The Scottish Government have come out quite clearly and said, 'We do not agree with this, we think there is a better way of doing it.' You've not put on the record the Welsh Labour Government's position on that 19 per cent. Is it correct? Do you agree with it or not?

The only reason we haven't put it on record is we are working through what they have put forward only just earlier this year. We will bring forward, by the end of this year, our response to their carbon budget 4, but we also have to take forward our pathway for carbon budget 3 as well. And bear in mind, carbon budget 3 will be challenging enough; carbon budget 4 will be even more challenging. And I come back to that point, Sam, which is we can't ignore the fact that agriculture will need—sorry, not just agriculture, but in context of the discussion today, agriculture and the food sector will need to do its shift in helping us decarbonise. And it's also for the benefit of them as well, because there are opportunities that come with this. And if we can be at the front edge in Wales, both with farming and food production, but also the value added stuff that we do as well, then there are real opportunities to seize.

That brand that we have about Welsh produce not just being good produce, but having really good environmentally sustainable standards, we build on that by saying we can also decarbonise as well. But it is challenging, without a doubt. But, it isn't only to do with livestock numbers, it's to do with wider decarbonisation as well. We'll bring forward, by the end of the year, our response to carbon budget 4. We also will bring forward our approach on carbon budget 3 as well, which is right in front of us.

Thank you. Hannah.

Thanks, Chair. I'm going to turn to business support now, if I may. The evidence that we took, Deputy First Minister, and we've heard this quite a lot from various sectors, mentioned the missing middle in terms of the make-up of Welsh food and drink businesses. There's quite a plethora of small businesses, and there are a number of prominent, well-known large organisations, but there are few in that space in between. The evidence we've heard is there's a real challenge in getting those smaller businesses to take the next step. Why do you think this is the case? What is the Welsh Government doing to try and support these businesses to take that step?

First of all, I recognise the challenge, and it's not unique to food processing and food production. It's a wider challenge across the industrial sectors of how you step up from the small and medium and grow those businesses, and particularly grow indigenous businesses, which is one of the big success stories in food and drink in Wales. We actually have in place a good success story in this and a range of support activities, but you need to keep on working at it to grow and develop these businesses. The growth of the sector, actually, is testament to the support that we're already putting in place.

So, for example—and you will know very well about this, Hannah—the Social Partnership and Public Procurement (Wales) Act 2023 has given much more flexibility now within the procurement system to consider social value in addition to that more narrow, constrained thinking that we used to have. That is of a particular benefit to small and medium-sized enterprises, because within procurement now we can say, 'Right, how does this actually encourage and incentivise small and medium-sized businesses to be part of procurement?' The thinking behind that, from our food and drink sector, is the support that we are giving to those to come together in networks in order to get into that procurement space. But, there are other things we can do as well. Sorry, still on that, we have a social enterprise procurement engagement approach here, and it is successful. We are bringing small and medium-sized companies along with us.

The other aspect that we can do in growing those small and medium-sized businesses is what we do in export. We have a particular strand that is absolutely focused on small and medium-scale businesses with export. So, we take a cohort of small and medium-sized businesses from across Wales, we give them bespoke, tailored support designed to increase their export potential, and we embed exports as a core aspect of their overall business growth strategy. Very often, for a small and medium-scale business, they will not be focused on this; they're focused on domestic markets or day-to-day operations. What we do is we lift up their eyes and say, 'We can help you', and it is a massive success. Participants in the first three years of that new exports programme—it's a specific programme—have seen a real acceleration on their export trajectory, way beyond what they could have imagined, and revenues boosted across the people who have taken part by £62 million in total. That is huge. It's a great success.

So, whether it's in terms of domestically with procurement, whether it's in terms of the support we can give through programmes such as the HELIX programme in technical innovation and support, or whether it's export, we're right in that space, Hannah, and we are really focused on small and medium-sized businesses. There's always a challenge in every sector, but, in the food and drink area, we are right in there. Keith, have I missed anything? There's such a range of stuff that we're doing with small and medium-sized businesses.

There's also the Cywain programme, taking those smaller farms on a journey. So, basically, it's stepped out for them. That's really what makes Wales different. The Minister alluded to the HELIX programme—we might say more about that later—which is the whole technical innovation, putting that into companies, how they are going to commercialise that idea and bring it right the way through, and we're with them at every step of the journey.

I would also say the cluster programmes. We've got one of the largest cluster programmes in the UK here in Wales, and that covers a lot of the small companies, right up to larger companies—so, basically, that seesaw effect of micro-SMEs and corporate working together, coming to these meetings every month. So, that brings them all together, and that answers part of the other question as well.

You say there's plenty of support there, and your paper also refers to schemes such as the investor-ready programme, the scale-up programme and the business accelerator scheme. I think the committee would be keen to have a reflection of how those schemes are working. But just a more basic question first from me: how is this support communicated? How do people find out that it's there, because, often, I think some of the challenge is that people do not know what support is out there and what the possibilities are.

One of the great successes of what we've done over recent years is to build—I hate to use these phrases, sorry, because they sound like business school talk, but I'm going to use it for a moment—what you could call a food business ecosystem. There is a real connectedness now. Okay, Chair, I can see your quizzical look. That's the only time I'll use it, right? But we've built that network of people—people know each other—and we're not only building the connections between small businesses. And you will know, if you go now to the Royal Welsh Show, where we have a showcase of what we do, you will go from supplier to supplier, and they will say, 'It's not just us that have had support, we've been connected with that one over there, and we're using their products to add more value and branding and so on.' We're doing all that. We've built those networks.

But in terms of how we actually look at the effectiveness of this, beyond the pounds, shillings and pence, I was talking about things like the export programme, the £62 million added value, we can measure things like that. With things like the investor-ready and scale-up programmes, we can see the growth within those. We monitor and measure things like the gross value added, the return on capital employed through the food business accelerator scheme, the new jobs that are being generated as well, and the overall contribution to the Welsh economy, which we cannot underestimate, because these businesses are in every single constituency across the land. Keith, again, I'm going to miss stuff.

One of the messages I want to leave with the committee today is: there is no stone we're leaving unturned here. There is an immense amount of work going on, and those businesses are directly involved in helping us shape it. So, when they say, 'We've got a gap here. How can you help fill it?', we respond very dynamically. Keith.

Basically, the five areas that make Wales different—and it comes out of these programmes, and we can go into the programmes if there are other questions on that—are: the cluster network; the HELIX programme, which is one vision for the food scientists throughout Wales; the market insight programme to give that level of data to the companies to get them from A to B, because they can't afford to buy that data themselves at a small, micro level; the export journey from, 'I've got an idea, I now want to export'—well, there's a journey to take; and Blas Cymru, the one-nation food approach, which is happening in a few weeks' time. That's what makes Wales different. It brings all of these programmes together. We are refining these programmes every step of the way. If something doesn't work, we keep moving on; we don't just stick with it. And we do research and evaluation on every programme that we have.

I think we've got something that is quite envied by other nations at the moment, but, having said that, we can never be complacent. The success is built on not resting on our laurels. The success is built on, 'What do we do next? How we can do the next step to support the growth of our food and drink businesses?'

Could I just ask—? I appreciate it's a business decision that businesses take, on how they expand, but in some sectors in the Welsh economy, if you look at it generally—the building sector in particular—a lot of businesses are quite happy to stay at a certain level rather than grow to what the potential could be. Do you, with your cluster network and the information you collate, detect that in the agri-food sector, in that the potential is there, but, obviously, businesses are comfortable doing what they're doing with maybe one or two people involved in that business, and they, for numerous reasons—and I appreciate that's a personal decision—don't expand? And so, is there a piece of work that's required to offer that support, to grow those businesses, to maximise the potential and grow the agri-food sector that way?

I think the sector feels—. I'll bring Keith in a moment. But I can tell you, from my reflections as Cabinet Secretary, on the basis of the endless discussions that I have with individual businesses, but also when we meet with them collectively as well, there's an absolute hunger here—there's a feeling. When you go to the food and drink business events, you can sense the excitement and the hunger to do more. They feel part of a real thriving sector that is a showcase for what we do really well in Wales, and they want to do more. Now, there will always be businesses that say, 'Well, actually, for various reasons, we're content with what we do', and so on, but what we have put in place, working with the sector, is the infrastructure that says, 'We would encourage you to work with us to grow Wales plc, because we can, and we know we've got success on it', and we see people who really are keen to step into that and do that, because we put in place the export support, because we put in place the sustainability cluster, the HELIX innovation support, and all of that. We can provide the fertile territory for them to do this, and they are stepping in. But, Keith, I feel this is different from other areas where you would have that, 'Well, thanks very much, but not interested.' My experience would say people are chomping at the bit to work with our support to really grow the sector and the businesses.

I would add, Mr Chairman, on the squeezed middle, I'm very aware of that research, when it was done, et cetera. We've got the incubation programme in Wales. When you get to the second stage of growth, sometimes there's not a unit for you, or planning—you just can't get what you want done. We're aware of that, and that's why there's that food innovation Wales network from Grŵp Llandrillo Menai down to Ceredigion, AberInnovation down to Cardiff Metropolitan University. It's the second step of those incubator units of those larger spaces. We do battle against that every week, and that, to me, is the stoppage, but we are working at all levels to do what we can. But that is the stoppage for this, and I think that's what the squeezed middle refers to.

Thank you. Hannah.

Thanks, Chair. In one of our very early evidence sessions in this inquiry Huw Thomas of Puffin Produce told us that, to achieve the scale required by large retailers, the Welsh Government would need to identify those businesses with the potential to grow significantly and work with them to provide specific tailored support and access to finance in order to enable that growth. Is that something, Cabinet Secretary, that's covered perhaps by one of the schemes you've already touched on? Is that happening, or could more be done?

I think we'd agree with you that that's exactly what's required, and whilst we're always keen—. I'm stressing we're quite dynamic in the way we respond to this. It's not one scheme that addresses that issue. We've got several schemes that address that issue of the bespoke one-to-one support. Keith has already touched on some of them, but the cluster network is really important in this, because having that peer-to-peer involvement with our support is very, very important, and Cywain, the scale-up, the investor-ready initiative, the HELIX programme, but also that market insight programme as well. All of that is based on the idea, then, that we do give support to the sector, but we also do tailor-made, bespoke support. We work with, we work in partnership with individual businesses to actually give that tailored support.

So, we actually agree with Huw’s point. We're always keen to modify and adapt and be dynamic, as we've proved over the last few years, but we think we've got something that is commendable and in place already that would do that. I don't know, Keith, if you feel there's any—. You touched on one aspect where one of our limitations is literally modules for businesses to grow, but are there other areas that we're picking up?

I would say the scale-up programme—I don't know if there'll be questions about that—and the whole commercial side of it, the planning, the resource management, and, 'Can you grow from one level to another?' So, to have people actually looking at your business case, your budgeting, your cost management, your business change implementation, your governance, that is something that they need, because they're not at board levels—there could be one manager doing three jobs. So, it's kind of helping there, and the scale-up programme does that, but we do have a list of companies who are at a certain level and they're ready to break through that glass ceiling. So, it's where we put them, the support we give them, the job creation that will come out as the output, and we're always working on that. But I agree with that—there are about 15 to 20 companies in that group, and it's their next stage of development and where they set up. But we've got the programmes in place to help them at the moment.

And, in fact, if I can just say, from Huw, can I give you the three Hs that will give you the clear example of how we drive this forward? HELIX we've mentioned. HELIX is very, very important, and I think it is the envy of other nations because it is that tailored support for food and drink businesses. The hubs that Keith has alluded to—those four hubs in different parts of Wales—I think those are equally critical. And the thing that we haven't mentioned, by the way, which is absolutely critical and it's driven by the market insights programme, is the HFSS, which is the high in fat, sugar and salt reformulation. We know that businesses—led by consumers, led by where the retail supply chain is going as well, and legislation—need to look at reformulation of some of the products. If you were at—and I know you were, Chair, and I think others were; Jenny was as well—the Royal Welsh this year, you would have seen some of the work that we're doing, expert led, on reformulation. That is exactly where Welsh Government and our agency support comes in, because then you have the retailers saying, 'We need a product that looks like what you've been doing before, but reformulated in order to sit on the shelves in line with consumers and recent regulations.' We're doing that. So, all of that is tailored support. So, you take one producer somewhere in north-west Wales who needs to get that product to market in a new shape, our HFSS support also helps them do that—so, those critical parts of tailored support.

In an earlier answer to me, you touched on the importance of local supply chains and the opportunities that may come from new procurement legislation and guidance around that. In some of the additional evidence we've had, stakeholders have expressed concern, perhaps, around the lack of the infrastructure to underpin and support those local food supply chains, including things like small abattoirs, dairies, vegetable processing facilities. Does Welsh Government recognise that as a challenge? And what is being done and what more can be done to perhaps maintain and expand that infrastructure, which could make a wholesale difference to the sector?

Yes. Look, in everything that we've done in our public statements and in the actions we're doing, we're very focused on local supply chains. That goes right up to the most recent work that we've been doing on the community food strategy, as well as procurement and everything else. And there are things that we have done and that we can do to help with it. We can't make every commercial decision for every operator, but, again, we can put the ground that supports that infrastructure.

You mentioned particularly abattoirs. Well, abattoirs can apply—and we would encourage them to apply, by the way—to the current window of the food business accelerator scheme, the FBAS, which is running from last January up to March next year. So, that aims to give support—quantifiable benefits—to food and drink businesses in Wales. It's to do with competitiveness, sustainability of new and existing businesses, response to consumer demand, encouraging diversification as well, and identifying and exploiting new market opportunities. So, there are things like that that we can do.

I think it's also, I have to say, in terms of supporting that local infrastructure, doubling down on that brand that we have in Wales with sustainability, and that includes things like PGI Welsh lamb and beef. That will really support it, because that drives the desire of retailers and export markets to go, 'We want Welsh lamb and beef because it has that elevated status.' So, we've been doing a lot of work on that, and that strengthens the need, then, for things like local processing, local abattoirs as well. So, on a range of things, and procurement, we're really pushing hard on that.

I'm sure colleagues will correct me if I've got this wrong, but I think my take from some of the evidence we've had wasn't the need to perhaps scale up existing abattoirs; it was to have more local facilities and create that kind of local supply chain and those opportunities.

But I'm just going to take the opportunity to ask my final question, because I know that I'm running out of time for mine now, and those turn around the challenges for skills and the workforce. Stakeholders have told us that skilled employees—you know, not having the right skills—can often be a barrier to business growth, but employment is key throughout, whether that's processing, producing, the supply chains or service. We've just heard, before you, from UKHospitality in terms of the challenges they're facing as well, and they did touch on things like the Wales tourism hospitality skills partnership. What is Welsh Government doing to support skills development and promote careers in the food and drink industry? Because I think one of the things I said to an earlier witness was it's perhaps not seen as a sector where you could make a career. How can Welsh Government work with the sector to perhaps make it a more attractive option for people, to have those high-quality, decent employment opportunities and develop skills and stay in their community in Wales as well?

You're so right, because sometimes there's a perception that all of food production and food processing is low skilled, low wages. Now, there is an element of that, but actually there are careers here in food technology, in innovation, in design of products and so on—really well paid, highly paid jobs. You walk into some of these, including medium-scale businesses, and they have people working on that front with our support as well. So, there are really productive, lifelong careers to be made here where people can develop their skills. Now, we can help in that.

You mentioned what's going on in the hospitality sphere—I won't rehearse that, but, within the food and drinks sector, the food and drink skills Wales approach we have is now widely delivered throughout Wales. Back in March this year, the FDSW launched a jobs noticeboard to allow companies to advertise the various vacancies in the sector and lift the profile of those different skills and opportunities that were available, be that one-stop-shop resource for people interested in working in the food and drink industry. There are over 1,600 vacancies, in great diversity, that have now been lifted up onto that site—in great diversity—showing the career potential within it, with skills and training and so on.

That FDSW also supports then Welsh food and drink companies in accessing training and skills development, focused on things such as driving up productivity, improving the bottom-line returns, innovation, design and best practice within the industry as well. This is based on our previous discussion as well. We are gearing up the industry, not, Chair, simply to be low-value production, but actually to capture the value of the processing and the design and the ready-for-market stuff as well. So, this gives us the opportunity now to change the perception and the understanding of opportunities in the food and drink industry, making it that attractive sector for career satisfaction, progression and lifelong choices.

But that's not the only way we do it. It's also what we do through the support that we do with the HELIX programme, the food and drink Wales cluster network, which we've referred to, so that businesses are getting the right support then as well to develop their businesses, which will expand those opportunities. We don't want businesses to, as you were saying earlier, Chair, just to be satisfied and tread water. We want businesses to think innovation, productivity, and jobs and careers will come with that as well.

And just—

Sorry, Keith.

Just something else to add: we also work on the pathways. So, there are 47 different pathways for the food and drink people to come—. It doesn't all have to be working on a line. So, it's very important to get those infographics out there to tell graduates, to tell people who want to move jobs, what they could do. That also, as the Minister said, comes through the HELIX pathway, because quite a lot of these jobs are also technical, and it's very hard to fill them if you don't have the right background. So, they're trying to work with them, through the universities and the colleges and agricultural college to get the right skills that they need. But it does take time to get through the system.

Thank you. Sam.

Thank you, Chair. I'm going to ask about the community food strategy, Deputy First Minister, but I'm going to take a step back to when you were a backbencher and my colleague Peter Fox was bringing through his food Bill. I remember, in one of the stages, you stood up and said that, 'This is a Government Bill. It's a very good Bill, but it's a Government Bill. It's so broad, it should be brought through by a Government.'

Oh, heck. [Laughter.]

When you took on the position of climate change and rural affairs Minister, did you ever consider bringing in a similar Bill to Peter's food Bill?

A big food Bill? No. My comment at the time, I think, still holds full credence. It was such an all-encompassing Bill. It's a little bit like the discussion we had earlier on, on the strategy. It was so everything, it risked being nothing—less than the sum of the parts. Really good stuff within it, much of which we've taken forward, by the way, as well, including within the community food strategy, the setting up of the advisory group, and so on and so forth. But it doesn't need an all-singing, all-dancing compendium of a Bill to do that. So, my point was the right point at the time there. That felt like a Government Bill. It actually felt like, also, a big, unwieldy Government Bill that was trying to do 20 different things. What we've done is actually spliced and diced what we needed to take forward from that. I think there was some really good stuff in it. CFS is a good outcome, I think, from Peter's work. And the support he had on crossbenches as well. Because I said at the time there was good stuff within that.

Moving on then to the community food strategy, supported by £2 million—is that sufficient to achieve the aims?

Yes, I believe it is. Because, within that £2 million, there are two elements—we can go into a bit of the detail in a moment. But one is that we've got some well-established local food partnerships already. They are what you might term as mature. So, there is an element of this that is to do with building on the work that's already out there. But there's also an element of actually getting into those areas where the local food partnerships are not developed, where those networks are not developed, where the bringing of people around the table is not developed, where there isn't the strategic thinking. So, there are two elements. There's a tranche of funding, which Keith can expand on in a moment, which is to do with building on the work that's currently there.

The second one, for those who are more mature, is to develop things such as those networks working together. So, for example, on machinery or innovation, together, that works on, for example, procurement within those local areas. So, that becomes quite interesting, because, for the more mature ones, they can move to another level and apply for a tranche of this funding that we've set aside for those more complex areas to get into, where we know there are some. So, I think we've had, so far—is it 16 of the LPNs that we've—? Of the 22 available, 16 of the LPNs have actually already taken forward proposals. Some of the ones that we initially said aren't quite ready, we've worked with them on a 1:1. I think we've got half a dozen of those now that we are ready to bring forward, but, Keith, you've probably got more detail.

We've been working on the grant processes, so that's now been approved. So, the majority of the money is now moving out—and we've 16 plus; I think we're hitting closer to the 20 now—to local food partnerships, to give them support. The areas they're working on are everything from food security, local horticulture, resilient supply chains, joined-up training, procurement, cohesive food communities, hubs. So, it's quite a lot; it's grass roots, it's working with them collaboratively, which has taken the time, but we have to get it right. So, I'm pleased to say that the financial side of things is moving. The £2 million for this year—for what we see that they're going to do, I think it's sufficient for 2025-26. Where that goes then in future years we don't know yet; we're still at that stage, and it's a very collaborative process.

Okay.

So, in your mind, if you split it into two elements, it's, roughly speaking, across all the LFP areas. The small grant is roughly £22,500 in each area, building on the work that's currently done, consolidating that. But the interesting thing is in the large grants one, with these more complex areas, which can go into procurement, regional food security plans and all of that—that becomes very interesting. And it's certainly sufficient, in direct answer to your question, for now; where it goes in future is going to be interesting. Because, if we have these LPNs coming back saying, 'Hey, we want to do even more', well, that's an exciting challenge for a Minister sitting in this position.

So, I opened two community vending machines in my constituency, in Llanteg and in Whitland. Local suppliers feeding into a community vending machine—direct milk supply, meats, honey, all sorts of stuff like that. No local authority involvement with that; that's through PLANED, and great work by PLANED and Iwan and his team there. Is that what you're envisaging through some of this, or is that an offshoot? Because local authorities aren't involved in that, and you've said local authorities with LFPs will create new supply opportunities by connecting local food stakeholders. Local authorities are doing a lot. Are they needed in this?

Yes, yes, entirely. So, it's great where there are individual initiatives going on. That'll continue to happen. Things will—. There'll be innovators out there who say, 'We've got something to contribute to this.' But the LFPs, the benefit of them is actually bringing that—. Oh, god. Right, I'm going to avoid using that word again.

Go on—do it.

No, no; I'm not going to. It's bringing those people together, around a table, building those networks of people, because that's where the added value comes. Because when you can then get into, beyond that individual initiative, things such as developing that capacity to get those SMEs and local community growers into procurement that ends up on the table, when you build it so that we're dealing, Sam, with things like local not scarcity of food, but shortages of food that are to do with distribution and the availability of food—things such as food pantries, foodbanks and so on and so forth—. So, there's a range of things that these LFPs can assist with, and that does include bringing together local authorities and other partners, including third sector partners, who have a lot to add to this as well.

Okay. I understand. So, on the healthier foods new product development programme, can you tell us a little bit more about that, its successes, and what you envisage it actually doing?

Yes. It's probably worth starting by saying how this has been evidenced and informed, how we've got to this point. So, I mentioned previously, Sam and Chair, that we have this market insight programme; it's led by our food division. So, that brings us real in-depth evidence analysis, policy analysis and so on, so that we've got real evidence-based responses to public health goals as well as sustainability goals. We commissioned, in 2025, updated research as well, delivered by Brookdale Consulting Ltd and partners, to focus on how consumer diets will evolve out to 2035, and with a specific focus on the implications for Wales; this is really important. This research has helped us put together our thoughts on business support and innovation and regulations. This means that we need to align food production and consumption with public health and sustainability and have that road map going forward.

So, what have we done on the back of that analysis? So, we're actively—proactively—supporting Welsh food and drink businesses with a series of free online workshops; we've held six so far. Ninety-four attendees; two of those across all the major sub-sectors of food and drink. They worked with businesses to understand the future consumer trends and the insights that we have, to explore things such as product reformulation, which I've touched on—a key part, now, of where consumers are going—and also stimulating new product ideas as well. And, by the way, this does tailor back into the vision that we have for food and drink.

We've also, then, got linked to this, the food innovation centres we touched on earlier and the insight programme, giving practical support. So, we've got workshops, we've got one-on-one discussions with businesses to reformulate products, to respond to legislation, for example, on foods high in fat, salt and sugar as well. So, that healthier foods new product development programme is driven by evidence and insights—some of which we commissioned ourselves with a specific Welsh focus—and then we get into working with the supply chain to say, 'Right, how do we use this so you're ready for market for where the consumers are going and where the legislation is taking us?'

Okay.

Have you finished, Sam? Jenny, do you want to say something?

I just wanted to pick up that I think the healthier foods programme sounds very interesting, but, in August, the institutional investors in food companies asked the UK Government for much more transparent labelling. You know, none of us go shopping with a microscope in our pocket to read what's actually in the stuff. So, what conversations have you had, really, to get a UK-wide drilling down into what's really in products so that people can make informed choices?

This is a real challenge, Jenny. For all the years that you and I have been focusing on this area and we've expanded the amount of information on labels, in some ways, for the consumers, as you rightly say, they do not spend their time pouring through that detail—and to some extent, more becomes less because you literally overwhelm the consumer. So, there is a real challenge here. And, at the same time, we do get requests at a UK level, as well as a Welsh level, from some consumers for more information to be added, and you get to the point of saying, 'How do you do this?'

Keith, I wonder if I can turn to you for the engagement that we have with the UK on this as well. Because there is that UK market imperative as well, but with labelling. Because this is a real conundrum now. We have so much—

We're 14 months into a new Government and we've had no action on this when it's a driver of ill health and early death. And, you know—. It's great, what you're doing, but this is operating to a niche market of better-off consumers, when we have to clean up the whole system.

Although, having said that, what we're doing on the healthy foods actions is for all consumers. We need to recalibrate some of these products so that they're healthier.

Absolutely. We don't disagree on that.

And I would say that the trade development programme, which we have, we work very closely with the retailers, the independents, those who buy products, those who are in charge of the labels, what's on those labels. So, true HFSS—high fat, sugar, salt content—and the reformulation and the responsible business, we're always working on that.

The issue of working with the wider administrations and the Department for Environment, Food and Rural Affairs, et cetera, we do; we've got regular meetings, we've got a joined-up type of response, but these things don't move as quickly as you'd want. And, really, there's a lot on these labels and it's up to the decision makers to make decisions on what's on them.

They won't change unless they're instructed to, but institutional investors are clearly saying that this is impacting on productivity because poor diet equals poor health. So, you know, unless the UK Government moves on something that we don't have the powers to do, we're left with niche markets, which could include public procurement. But, you know, at the end of the day, we want to try and ensure that everybody in Wales is benefiting from this initiative.

Jenny, that's a really good point. And I think, just chatting with colleagues here, this is, undoubtedly, something that we can factor into discussions on the UK food strategy. It's the sort of thing that we should be engaging with UK Ministers on. I'm not clear that there is a straightforward solution to this, because we do have so much information now that we could add to the consumer. The question is the complexity on the labelling.

Yes, but other countries have really clear traffic lights.

Yes, indeed. And then what do you choose to traffic light and what do you choose not to traffic light? But, no, listen, I'm happy to take that away, because in terms of the development of the UK food strategy, which I mentioned earlier on, in some ways we're really keen on that, because some of it is trying to put into place stuff that we are doing now here in Wales, but we're keen to align with and work with the UK Government. And, if you're happy, I think we'll take that away and see how we can factor that into the discussions, both at official and ministerial level, because it's a really important point.

Jenny, your questions.

Oh, fine, okay. So, you are committed to having an increase in horticulture. You want to update 'Planning Policy Wales' to signal a strategic shift towards enabling horticulture as a viable land use and processing opportunity. How does that square with the decision last week to grant planning permission for a huge solar farm on Anglesey, which is 37 hectares of grade 2 land and 122 hectares of 3a good-quality land, in an area of Wales that is famous for its ability to grow vegetables, in terms of the quality of the land?

I'm going to try and avoid being drawn into commenting on one specific proposal in one area, but you are right in saying that our approach is that we want to grow, significantly, the horticultural sector in all its great diversity. And we are having some key success in this. And, yes, part of the work going forward that we are focused on is improved planning guidance, so that we can facilitate more development of horticulture-related processing and production on sites, both within edible horticulture and also within ornamental horticulture, which is also a key part of our economy there.

If we look back over the recent couple of years there, we've done now, just to show the importance that we're putting on this, because you and I, you know, we've been—. When I was on the committee, you were challenging on this, you've been consistent on this, and it's been good, because it has helped drive some of the focus that we have on it—you and others. We've had now 335 fully funded, one-on-one support sessions with horticultural businesses, on things, by the way, such as crop planning, pest management, soil health, diversification; that really tailored support there to those businesses.

We've had 841 course places for horticultural professionals in Wales, specialist workshops, training days, study visits, webinars. We're really putting the effort in here to grow that momentum behind it, and also that professional approach to horticultural development, so that we don't have businesses standing there thinking, 'We'll tread water.' We want to grow this sector. Some of the stuff we've been looking at is regenerative growing, how to scale up production, post-harvest storage and hygiene, direct marketing, and so on.

We've had 20 growers networks now created. This is a key part of it, so that those businesses don't think they're alone doing this. Building those networks. We've seen this in other aspects of the food and drink sector. Building those networks is important. That's supporting now over 450 active members. Now, that's since 2023, the push that we've been putting behind this. We know we've got to do more. We're not complacent about this.

So, the next stage becomes: what can we do on planning guidance? What can we do on access to finance for SMEs to modernise or expand their processing operations? And there is support in place. We have a couple of grant schemes, both for new enterprises, but also for existing enterprises. But we're looking at what more we could do. Also, the important thing here, which has come up, well, I don't know if it has come up in evidence, but the need for small-scale and for regional processing facilities. So, it's not just producing the product, but it's the cleaning, the washing, the splicing and the dicing. We need more of that as well. So, these are the areas we think are the next stage to go into to reduce some of those barriers again, because if we're going to get significant growth into procurement and so on, from our own horticulture, we need the whole process inside of it as well as the production side. So, we're already spotting what the next things we need to move on to are.

What I was going to add, Deputy First Minister, is that in the community food strategy we've got a specific objective to increase the production of fresh, nutritious, sustainably and locally sourced food, and, for me, when the ministerial advisory group gets going, I think that's one of the areas that we'd want to talk to them about—the sorts of things that the Deputy First Minister has raised as future areas—to use the ministerial advisory group to help us shape what that offer looks like, to make sure that it does absolutely meet the needs of those small community growers, of those trying to increase their horticulture, et cetera.

But are we doing enough? Because one of the participants in the horticulture round-table at the Royal Welsh Show that was hosted by the National Farmers Union, a north Wales farmer, said subsequently in conversation, 'Why am I having to chase support for developing my horticulture? Why aren't officials banging at the door, at all of us, given the needs?' So, I went to Lantra and I put that point to them. They said, 'Well, we're only eight full-time equivalents.' So, are we putting enough resource into it, given the strategic importance of improving our horticulture food supplies? What about those who have no succession plan for their livestock production? How can we persuade them to rent some of their land to small-scale producers of horticulture?

So, it is a real issue, but I think you would recognise that we are in a growth phase here. As we grow horticulture, and I think we're having some tangible success now—some indicators that we're really on the right track—the demand is going to be coming back to Ministers to say, 'Well, how do you upscale the support?' Now, just to say, on the farming side, we've also been putting the support in there through Farming Connect. I guess there are some farmers who that hasn't reached yet, but we've had—let me just check my notes here—

Lantra is delivering the—

—183 new horticultural registrations through Farming Connect since April 2023. So, I guess, as we grow this and we get more success and more interest, the ask is going to come back to me and to Gian Marco, who holds the budgets there, to say, 'What more do we now need to put in?' But that's great. That's a measure of success. What we wouldn't want to do is simply just to throw money at this. We need to grow it commensurate with the resource available. But Farming Connect, which we often miss as part of the solution within this, has 183 new registrations.

And I think there is an opportunity, given that we will be letting a new Farming Connect contract for next year to support the delivery of SFS, to look at some of these areas and perhaps, within the resources that we've got, see how the focus shifts as we move from the current system of support towards SFS. I would imagine that supporting farmers to diversify to things like horticulture would be part of that.

Okay, that's good. You mentioned that access to land and suitable dwellings for growers is essential for expanding horticulture, and I visited the Powys project, up very close to the English border—Sarn farm, is it? Clearly, Powys is making very good use of converting their county farms into spaces for expanding horticulture. What conversations are you having with other local authorities to use their county farms more imaginatively, rather than just selling them off to the highest bidder?

We're really taken by the innovation that Powys is showing, and we think some of this is to do with sharing that good practice with other local authorities. Incidentally, I've either written out or I'm writing out at the moment to—. I have written out already—I knew I'd signed it off there—to local authorities, to ask them some questions on their current holdings, but also on their intentions around those holdings as well, because we want to get a feel for how local authorities, in the wider context as well, plan to use their own county holdings in terms of access to farming, et cetera, et cetera, and also horticulture as part of that, because that is the local authority-held land that could really lead to some innovation. I think that Powys are doing some great, innovative things on this. The question is, without me being just directive, how do we encourage the uptake of more of those sorts of innovations so that the county-held farms also become a landscape where horticulture is developed as well.

What role can the community food partnerships play in mapping, if you like, the fruit and veg deserts so that we can inject new growers into communities so that everybody has access to fresh food? That's where we're going, so how can the community food partnerships be identifying places where—? Treorchy is a place that springs to mind, where there is no fruit and veg locally grown, it has all come from a very long distance away.

There is definite potential here. Again, I don't want to be directive, because each local food partnership is at a different level of maturity, but what I described earlier on with the difference between the small grants we’re making available to everyone but also the larger grants that are to do with more of an innovation space, bringing those networks together, doing innovative things, that's exactly the space where a local food partnership could say, 'Well, one of the things that we want to look at is how do we bring together not only the larger scale growers in horticulture, but all the community growers, smaller-scale growers, the ones that want to come into it. Where's the land? Where's the availability?', and to have local authorities, as we were talking about, around the table to talk about that as well. So there is the potential there within the local food partnerships, particularly within the larger-scale grants. I don't want to direct them, because every local food partnership will be responding to different priorities and so on, but it has the potential for them to do this. The community food strategy is very clear in the objectives that we've set out that this is to do with building local food networks. Horticulture has to be part of that.

Just to come back to food processing, we've had a huge glut of fruit this year, but a lot of it is just lying on the ground; nobody seems to know how to juice it, to convert it into jams or things that we can eat all year round. So, how is that being tackled? It breaks my heart when so many children never get to have fresh fruit.

I might need to turn to my colleague here to ask about the superabundance that we're having with some of the fruit production at the moment. I can say from my perspective that I am juicing my fruit at the moment. I have got my press out.

That's wonderful, but it doesn't resolve the problem.

I do home-grown wine production, and it's now being turned to apples and pears.

Cider.

Why haven't we got schools juicing their fruit?

What, doing wine production?

Wine production, no. I don't think that's appropriate, but juices.

Genuinely, these are traditional skills, it would be a great innovation. I'm not personally offering to go around every school in the country to teach them how to press fruit. Gian Marco.

No, okay, but there's a serious point there, which is that nature is delivering us this abundance and, unfortunately, we're wasting a lot of it at this stage.

And again, I think that there is an element here that is about tying up those local food supply chains, because at the moment that's part of the problem, isn't it? We've had the great weather, which is great for food production, but we haven't got the means to actually make sure that that local produce is used as efficiently as possible in those local communities. So, I do think that there is a space absolutely for the community food strategy for those discussions to say, 'Okay, how can we do that? How can the local food partnerships help with that? Are there other initiatives out there that can help us in these sorts of situations?'

I do think that local food partnerships are key to this. You will know that Jane Hutt and I have been very closely involved in the development of the proposals around local food partnerships. They have a range of objectives, but one of them is actually to do with dealing with that issue of food distribution, hunger, food poverty. It won't only be this year in terms of fruit being superabundant and how we deal with that. We know that, even now, currently, it's how do we distribute surplus food that is either coming from the field or, alternatively, is coming from retailers.

We know we've got challenges in that. It's not that there isn't enough food, is it getting to the right people at the right time in a way that they can use it and with the ability to use it? This is where local food partnerships can play a real role, because of that co-ordination locally. There are some brilliant organisations out there, but it can sometimes feel a little bit not fully collaborative on the ground, a little bit competitive between different groups and organisations. Local food partnerships can co-ordinate some of that so that we get food to where it's needed, whether it's fruit surpluses or whether, from time to time, it's bread and it's other produce and whatever—how do we level this out?

I'm going to have to call it, because we've gone 10 minutes over our allotted time.

Have we? Okay.

If we could do the public procurement block via written correspondence, Minister, but you've been very generous with your time today and fulsome in your answers, maybe a little bit too fulsome sometimes. But we'll look forward to next Thursday's session as well. It's Thursday next week, isn't it? Oh, Wednesday—we've got two Wednesdays on the bounce, right.

Minister, a record will be sent to you of today's evidence. Obviously, you and your officials can have a look at that. If there's any concerns about it, please raise it with the clerking team. As I said, we'll follow up with correspondence on public procurement, which was the final set of questions that we were going to ask in this session. But thank you for your evidence this morning—it has greatly informed us, and hopefully will assist us in our report. Thank you very much.

Thanks, everyone.

I'll invite colleagues to note papers that are in the pack. Are there any points anyone wants to raise on those papers? No. Okay.

Could I have a motion to move into private session?

Move.

We'll move into private session.