Y Pwyllgor Materion Allanol a Deddfwriaeth Ychwanegol - Y Bumed Senedd

External Affairs and Additional Legislation Committee - Fifth Senedd

08/10/2020

Aelodau'r Pwyllgor a oedd yn bresennol

Committee Members in Attendance

Alun Davies
Dai Lloyd
David Rees Cadeirydd y Pwyllgor
Committee Chair
Huw Irranca-Davies
Laura Anne Jones
Mandy Jones

Y rhai eraill a oedd yn bresennol

Others in Attendance

Andy Richardson Bwrdd Diwydiant Bwyd a Diod Cymru
Food and Drink Wales Industry Board
Dr Nick Fenwick Undeb Amaethwyr Cymru
Farmers' Union of Wales
Huw Thomas Undeb Cenedlaethol yr Amaethwyr Cymru
National Farmers' Union Cymru
Jim Evans Cymdeithas Pysgotwyr Cymru
Welsh Fishermen’s Association
Julie Byers Ffederasiwn Bwyd a Diod
Food and Drink Federation

Swyddogion y Senedd a oedd yn bresennol

Senedd Officials in Attendance

Alun Davidson Clerc
Clerk
Claire Fiddes Dirprwy Glerc
Deputy Clerk
Nia Moss Ymchwilydd
Researcher
Rhys Morgan Ail Glerc
Second Clerk

Cofnodir y trafodion yn yr iaith y llefarwyd hwy ynddi yn y pwyllgor. Yn ogystal, cynhwysir trawsgrifiad o’r cyfieithu ar y pryd. Lle mae cyfranwyr wedi darparu cywiriadau i’w tystiolaeth, nodir y rheini yn y trawsgrifiad.

The proceedings are reported in the language in which they were spoken in the committee. In addition, a transcription of the simultaneous interpretation is included. Where contributors have supplied corrections to their evidence, these are noted in the transcript.

Cyfarfu'r pwyllgor drwy gynhadledd fideo.

Dechreuodd y cyfarfod am 14:00.

The committee met by video-conference.

The meeting began at 14:00. 

1. Cyflwyniad, ymddiheuriadau, dirprwyon a datgan buddiannau
1. Introductions, apologies, substitutions and declarations of interest

Good afternoon. Can I welcome Members and the public to this afternoon's meeting of the External Affairs and Additional Legislation Committee? Members will be aware that we are operating in a virtual mode due to the current restrictions in place. In accordance with Standing Order 34.19, I've determined that the public are excluded from the committee's meeting in order to protect public health, but the public are able to view the meeting on www.senedd.tv and on that webpage there are options to listen to the verbatim in Welsh as well as in English, or to a translated version in English only. 

If I lose my connection due to any technical reason, then we have already agreed that Alun Davies will take over as Chair on a temporary basis, either until I return, or until the end of the meeting if I cannot get back in at any point in time. Do any Members have declarations they wish to make at this point in time? 

Chair, the same declaration as usual on the three groups I chair for the First Minister with European connections.

Okay, thank you, Huw. And we have received temporary apologies from Laura Jones. I say it's temporary because she's unable to join us in the first session, but she's hoping to join us later on this afternoon.

2. Parodrwydd yng Nghymru ar gyfer diwedd y cyfnod pontio—Sesiwn dystiolaeth gyda rhanddeiliaid o’r sector bwyd a diod
2. Preparedness in Wales for the end of the transition period—Evidence session with stakeholders from the food and drink sector

Going on to item 2 of business today, and we continue our work into the consideration of preparedness in Wales for the end of the transition period. This afternoon, we have evidence sessions with stakeholders, from the food and drink sector in our first session. Can I welcome Julie Byers, who's product affairs manager for the Food and Drink Federation, and Andy Richardson, who's head of corporate affairs at Food and Drink Wales? Welcome, both. We'll go straight into questions, if that's okay with you, because we want to try and explore where you consider we are in relation to the end of the transition period on 31 December. So, we'll start with Dai Lloyd.

Diolch yn fawr, Cadeirydd. Fe wnawn ni ddechrau, felly, gyda chwestiwn cyffredinol i'r ddau ohonoch chi. Allwch chi amlinellu lefel bresennol y parodrwydd yn y sector bwyd a diod ar gyfer diwedd y cyfnod pontio? Jest lefel bresennol y parodrwydd yn eich sector chi gogyfer diwedd y cyfnod pontio. Dwi ddim yn gwybod pwy sydd eisiau mynd yn gyntaf—Julie?

Thank you very much, Chair. So, we'll start with a very general question to both of you. Can you outline the current level of preparedness within the food and drink sector for the end of the transition period? So, that's the current level of preparedness in your sector for the end of the transition period. I'm not sure who'd like to go first—Julie?

Yes, thank you. So, in terms of the level of preparedness of food and drink manufacturers in Wales, they are really looking to prepare for the end of the transition period and doing as much as they can. I think there have been barriers and challenges to being able to prepare, and that comes down to two reasons. One is about the impact of the COVID-19 outbreak on food and drink manufacturers and, while they were incredibly resilient at the start of the outbreak in keeping the nation fed, and we really applaud all those hidden heroes who supported manufactures in doing that, actually, that diverted resources from being able to prepare for—.

Sorry, I'm just hearing two versions of audio, so I'm just hearing myself as I'm talking. So, in terms of diverting resources and—. Sorry, I'm having technical issues. I'm just hearing everything twice.

Julie, do you want me to take over and then you sort the technical bit? Would that be helpful?

Yes, thank you.

I don't want to interrupt, Dai, but it might be easier if I do that. Dai, shall I just leap in?

Thank you, yes. And David, just for the record, just so you're aware, I'm the chair of the Food and Drink Wales Industry Board. It's slightly different from what you introduced, but not a problem. 

In response to your question, Dai, I think the important thing to recognise is there's a real polarised preparedness amongst businesses. You've got at one end, I think, the large processors, the largest businesses, who are as prepared as anybody can be given the fact we don't know the outcome, and that's largely because they've got the resources, the people, the connections, et cetera. I think, on the other side, you've got the smaller processes, maybe the SMEs or even micro, that are just, frankly, not ready for a number of reasons, one of which is coronavirus. You know, they've suffered desperately badly as a result of that crisis, particularly those supplying hospitality, but also they don't have simply the resources and the capacity to understand what the issues are.

Just another couple of comments, just very quickly, Dai. I think businesses in Wales have got a false sense of security. Many of them won't understand their supply chains going one or even two steps backwards. I wouldn't use the word 'naivety'; I think it's a lack of understanding and a false sense of security. So, I think I have to say that I don't think many of the smaller businesses are ready.

14:05

Diolch am hynna. A sut mae coronafeirws wedi effeithio ar hynny i gyd, wedyn?

Thank you for that. And how has the coronavirus pandemic impacted on all of that?

Do you want me to go first, or Julie? I think Julie has left the call, hasn't she?

So, coronavirus obviously impacted businesses very badly. I wouldn't necessarily say that it's to do with size in this case; it's more to do with resilience in their business models. In other words, obviously, those people who had a focus on hospitality have suffered badly—really badly—whereas, actually, at some other ends, those making retail produce and have been lucky enough to be in those groups of products that weren't deselected, they're doing pretty well. So, again, C-19 has had a huge impact, but from a different aspect.

Diolch. Symudwn ymlaen i agwedd arall, ac Andy yn unig, ar hyn o bryd, achos dwi'n credu bod Julie yn dal i drio dod nôl i mewn. Allaf i ofyn i chi am eich barn ar gamau Llywodraeth Cymru a Llywodraeth y Deyrnas Unedig? Pa gamau maen nhw wedi'u cymryd i baratoi'r senario ar gyfer cytundeb i gael dêl neu gytundeb i beidio â chael dêl? Ydych chi wedi cymryd rhan yn y gwaith cynllunio ar gyfer y cyfnod pontio o gwbl yn yr holl drafodaethau yma rhwng Llywodraethau—Llywodraeth Cymru a Llywodraeth y Deyrnas Unedig—ynglŷn â pharatoi senario cytundeb neu heb gytundeb? Ŷch chi wedi bod yn rhan o'r trafodaethau o gwbl?

Thank you. Moving on to another aspect of this, and I think it'll be Andy alone at the moment, because I think Julie is still trying to rejoin us. Could I ask you for your views on the Welsh Government and the UK Government's actions to prepare for a deal or a 'no deal' scenario? Have you been at all involved in the planning work for the end of the transition period throughout all of these negotiations between the Welsh Government and the UK Government on preparing for a deal or a 'no deal'? Have you been involved at all in those discussions?

Thank you, Dai. 'Yes and no' is the answer. In terms of the UK Government, I've been involved in a lot of discussions and fora to inform us what's going on. The challenge, obviously, that we've all got is that we don't know the outcome, and the outcome could be pretty much polarised.

I think that the challenge we've got and the only thing that's wound business up from a UK Government perspective is that we've been told that we've had three years to prepare and therefore we should be ready. And that's very, very difficult because that's not the case. We haven't had three years' notice; we've had three years' notice of having to be evicted, but no more than that.

Yes, I have been involved in Welsh Government communications to businesses. What we've tried to do and what we have done is have a regular conversation with businesses. We've been honest, we've focused on what we do know and we've focused on what we don't know and we've been very clear in that. So, an example is we've done a weekly and now bi-weekly newsletter to over 800 food and drink businesses. 'Newsletter' is a bit of a throwaway line, but the focus has been on signposting information; not giving an opinion and being an intellectual exercise. It's about signposting people to information. We're also running and planning webinars, and what we're trying to do is to get like-minded, similar groups of businesses together to talk about specific issues, such as finance, such as paperwork. And we're trying to work with people like the Food and Drink Federation to deploy those effectively to groups of businesses.

But it's very hard because, at the moment—. I know the UK Government have just issued their—I'll try and get the phrase right, actually, so excuse me for looking at my notes—border operating model, which, literally, was issued I think about an hour or two ago, and we're now in the middle of October.

Ie, bydd yna gwestiynau ar hwnnw yn nes ymlaen nawr. Croeso nôl i Julie.

Yes, there will be questions on that later. Welcome back, Julie. 

Yes, apologies for that.

Na, dim problem o gwbl.

Allaf i ofyn barn chi'ch dau, felly, ar sut mae Llywodraeth Cymru a Llywodraeth y Deyrnas Unedig wedi bod yn gweithio gyda'i gilydd i baratoi at ddiwedd y cyfnod pontio? Rŷm ni wedi clywed gan Andy eich bod chi wedi bod yn rhan o'r trafodaethau efo Llywodraeth Cymru. Gan symud ymlaen o hynny, beth yw'ch barn chi ar sut mae Llywodraeth Cymru a Llywodraeth y Deyrnas Unedig wedi bod yn gweithio efo'i gilydd i baratoi at ddiwedd y cyfnod pontio? Julie, ydych chi eisiau mynd yn gyntaf nawr?

No need to apologise at all; it's not a problem.

Could I ask your views, therefore, on how the Welsh Government and UK Government have been working together to prepare for the end of the transition period? We've heard from Andy that you were involved in the negotiations and discussions with the Welsh Government. Moving on from there, what are your views on how the Welsh and UK Governments have been working together in order to prepare for the end of the transition period? Julie, would you like to go first?

14:10

Yes, I will do. So, the Food and Drink Federation has been work very closely with the UK Government, and we've also been working very closely with the Welsh Government. In terms of how they've been working together, I think what a great example of both what the UK Government and the Welsh Government are doing is being able to keep businesses up to date on the latest developments and that clarity that is needed. So, just taking back what I was trying to say before I kind of got cut off, one of the biggest barriers to businesses to preparing at the moment is that lack of clarity. We still don't know what deal we're looking for, and that acts as a little bit of a barrier for businesses preparing, because they can only go so far in knowing what they'll be able to prepare for, essentially. I think that guidance from both the UK and Welsh Governments is really useful, and looking at ways essentially for them to both work together and identify areas is very useful, and we continue to work with them going forward, as well. 

Diolch yn fawr. Ac, Andy, sut mae'r ddwy Lywodraeth wedi bod yn gweithio efo'i gilydd, ydych chi'n meddwl? 

Thank you very much. And, Andy, how have both Governments been working together in your view?

Thank you, Dai. Again, I'd say I'd split it. If you're talking about discussions—and by the way, this is my perception, as I've not been involved in all of the meetings, of course—my perception is that, in terms of the rest-of-the-world negotiation and roll-over trade deals, the relationship between the Welsh Government, the Department for Environment, Food and Rural Affairs and the Department for International Trade has been very constructive and very good. Again, I'm not party to all of those meetings, but I can give some examples through the work that I'm involved in through the Food and Drink Sector Council. We've become aware of initiatives such as the Gulf Co-operation Council work, and also the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. And where we wanted to share information, it's been very open, both from a DIT and DEFRA point of view, and Welsh Government. So, I would say of course things are not perfect, but I think they are very positive. My instinct is that the connection between Westminster and Wales has not been so good on the EU negotiations, and I think that's a Cabinet Office issue. 

Diolch am hynna. Rydych chi eich dau wedi pwyntio allan yr ansicrwydd yn y sefyllfa bresennol, ac, yn naturiol, rydym ni i gyd yn cytuno efo hynna. Nawr, os gallwn ni fod ychydig bach yn fwy plaen a mynd ar ôl y ddwy senario, o ran y senario gyntaf, allwch chi amlinellu goblygiadau Brexit heb gytundeb masnach i'r sector bwyd a diod yng Nghymru? Felly, beth fydd yn digwydd os bydd yna Brexit heb gytundeb masnach? Dyna ran gyntaf y cwestiwn. A'r ail ran ydy: sut mae cytundeb wedi'i negodi yn seiliedig ar gytundeb masnach rydd yn wahanol ei effaith ar y sector bwyd a diod yng Nghymru? Felly, y ddwy senario yna. Pwy sydd eisiau dechrau? Andy?

Thank you for that. Now, you've both pointed out the uncertainties in the current scenario, and, of course, we all agree with that. But if we can be a little more plain-speaking and look at both possible scenarios, could you, as regards the first scenario, outline the implications of a 'no trade deal' Brexit on the food and drink sector in Wales? So, what will happen if there is a 'no trade deal' Brexit? That's the first part of the question. And the second part is: how does a negotiated agreement based on a free trade agreement differ from that first scenario in terms of its impact on the food and drink sector in Wales? So, it's both scenarios I'm looking at there. Who'd like to start? Andy?

Okay, so, I think in terms of the impact of a 'no deal' on the Welsh food and drink sector, it would be very significant. If you look at the actual dynamics of the Welsh food and drink sector: £7 billion turnover, £0.5 billion exports. Although we're not as exposed as maybe Scotland is to export, it's still significant. And if you look, most of that goes to the Republic of Ireland, Germany and France, and a big part of that—I think over half—is meat and dairy combined. Obviously, we all know that lamb is very important. So, 37 per cent of Welsh lamb is exported, and 90 per cent goes to the EU. So, the threat of a 'no deal' is very significant and, importantly, those sectors cannot compete on that basis. I think the other thing we have to bear in mind, which is not the export side, is the import side. I've heard that the UK global tariff rates are broadly going to be equitable with the export rates. We need to be really careful that, if we do have a 'no deal', those rate are equitable. If they're not, and there have been some people pushing for lower import tariffs to reduce the cost of UK manufacturing, that's false logic, because all it will do is open up the UK market to finished-product competitors. So, if you let the raw materials in cheap, you let the finished product in cheap, and that will totally undermine not just Welsh but UK manufacturers. I'm sorry, Dai, what was the second part—apologies—of your question?

14:15

Os bydd yna gytundeb yn cael ei negodi, yn seiliedig ar gytundeb masnach rydd, sut bydd hwnnw'n wahanol?

If a deal was negotiated, based on a free trade agreement, how would that differ?

So, I think it would differ because a big part of that is tariffs. So, the tariff issue would probably negate it. The bit that it won't address, obviously, is the paperwork, because, as I understand it, there will have to be paperwork in any scenario, and that is significant. And I would assume that perhaps we're coming on to that later on. 

Ydy, mae hynna'n digwydd. Julie, rhywbeth i'w ychwanegu i hynna neu rywbeth yn wahanol?

Yes, I'm sure that'll happen. Julie, anything to add to that or anything that you disagree with?

I was just going to say in terms of businesses preparing for a deal or no deal. Really, the type of deal that the Government is pursuing means that, relatively, business preparations will probably be about the same. I think some businesses may have been delaying their preparations because they wanted to see what the outcome of the deal was, but generally it's quite similar in terms of preparations. Really, we would want a deal, but realistically any deal would be quite thin and wouldn't necessarily provide much more clarity about those non-tariff barriers that were just alluded to about administration, so paperwork and things like that, but also in terms of delays at ports and food perishing and things like that. There's a lot still to consider, even with a deal as well.

Diolch yn fawr am hynna. A'r cwestiwn olaf wrthyf i, Cadeirydd: a allwch chi'ch dau gadarnhau: a ydych chi'n hyderus y bydd yr holl sefydliadau bwyd yng Nghymru sy'n allforio i'r Undeb Ewropeaidd wedi'u rhestru fel sefydliad bwyd cymeradwy cyn diwedd y cyfnod pontio? A ydych chi'n gyfan gwbl hyderus y bydd yr holl sefydliadau bwyd yng Nghymru sy'n allforio i'r Undeb Ewropeaidd wedi'u rhestru fel sefydliad bwyd cymeradwy cyn diwedd y flwyddyn?

Thank you very much for that. And the final question from me, Chair: can you both confirm whether or not you're confident that all Welsh food establishments that export to the European Union will have been listed as an approved food establishment before the end of the transition period? Are you entirely confident that all Welsh food establishments in Wales that export to the European Union will have been listed as an approved food establishment before the end of this year? 

Do you want me to go first?

Your question, Dai, is very specific, and the answer, I think, is 'no'. I cannot guarantee it; I can't be sure. I'm hopeful that the vast majority would be.

I'd probably just echo what Andy has said, and I can always provide some follow-up evidence with more information as well.

Thank you very much, and I'm grateful to both witnesses for their evidence this afternoon. I think in the past the organisations you represent have, at different times, expressed some concern or asked a question, shall we say, whether there is sufficient resource available in order to deliver a new structure and a new way of working. So, I was wondering whether you believe, or from your experience do you know whether there are sufficient resources in place at the moment, for example official vets or local authority environmental health officers able to sign and inspect consignments of animals or animal products for export to the UE? Do you have that level of infrastructure in place?

I'm happy to come first on that one. I can't really speak—that's probably one for environmental officers, one for local authorities to speak on. In terms of vets, because obviously now the producers and particularly those that export Welsh lamb will need export health certificates, and our understanding is that we still need that capacity for vets, we particularly urge the Welsh Government to ensure that the capacity in the number of vets in Wales is there. But it's not also just about the number of vets that are available to provide those export health certificates, it's also about in what locations they're based. And I think what's really important is ensuring that there's that quick turnaround time on getting those export health certificates approved, essentially, because with foods there's a very short supply chain, so, really, all the time counts.

14:20

Interesting question, Alun, because I spoke to a vet about three days ago and he was saying he doubted very much there was the resource available in terms of vets to sign these documents. And I think one of the things—and I forget the name, but there was supposed to be a system whereby vet juniors, in my language, were there to actually help sign these documents. I've not heard anything, and that was probably over a year ago, actually. Personally, it'd be interesting to see where that went to, and, hopefully, I've described it right—those people who weren't vets but were able to sign them. Is your question about resources wider than just vets, though, Alun?

So, I think a number of things: one is if you look at ports, being able to get products out of Holyhead, for example, if the resource and the capability was adequate there, bearing in mind we're very close to B-day, as it were. I think the biggest resource I'm worried about is resources in businesses to be able to handle the paperwork. I mentioned that earlier on: small and medium-sized enterprises and micros just do not have the capacity. To be fair, there may be less of the exporters, but they're very much relying on the freight forwarders, the experts, and, of course, the chambers of commerce as well. I don't know what spare resources they have, but I think they're going to come under a big load over the next few months.

Yes, well, as somebody who's run a business in the past, I know that the burden of red tape and bureaucracy is something that costs you literally time and money all the time. So, that is something that I know very many businesses are very, very concerned about.

Taking this wider—well, the role of Welsh Government—I understand they've delayed the new food and drink strategy and we've got the COVID recovery plan, as you would anticipate. Do you feel that there is sufficient policy direction provided by Welsh Government? Do you feel that the Welsh Government has got its resources in the right place, that it's got a very clear direction of travel, that it's setting a clear pace in order to provide support from some of those businesses you've just described at the time of change?

Do you want to go first, Julie?

Yes, I'm happy to. So, in terms of Welsh Government priorities, I think supporting businesses to prepare for the end of the transition period is quite high on the list. We've been working with the Welsh Government and also communicating their guidance through webinars, and will continue to do so. Just on other things that we would encourage them to do going forward as well, going back to your question about resource, is ensuring that the Welsh Government has enough capacity to not only just produce guidance for businesses, because, really, guidance isn't one-size-fits-all. The food and drink manufacturing sector in Wales is very diverse; you have those larger businesses who have sites in Wales, but, also, the majority of the sector is SMEs and, really, what we need from the Welsh Government is having resource and capacity with them, so if those businesses have a question, they can just be able to enquire about it so they get specific answers from the Welsh Government as well.

I certainly declare an interest in that the food and drink strategy that has come to an end is one that I designed. But the focus on it was very much, as you said, Julie—the purpose of the strategy was to take a small start-up, for argument's sake, and then to help it on its way from being a small business to be a medium-sized business to wherever it wishes to go on its journey. Some businesses want to be a multinational, others want to remain a locally focused business, and you've got everything in between. And the purpose of that strategy was to provide help and support on that journey. Now, you don't need a strategy to do that, of course; strategies are things that politicians like to talk about—it gives them an impression of doing something. What you actually need is the resource on the ground that is functioning and working. Do you believe that there's sufficient resource being provided by Welsh Government to businesses in your sectors to enable them to function effectively and to get over these barriers, if you like, over this period? That's the heart of what I'm concerned about.

14:25

So, from my perspective, and, by the way, Alun, I think that that strategy that you penned was spot-on and your prophecy came true, actually—we exceeded it, so that was good.

I'll make sure that point is noted in our minutes. [Laughter.]

Well, it was only £200,000 out, Alun, so, there we go—I think we'll let you have that—in the right way.

Now, you may think I'm going to say this because, effectively, I report to the Minister Lesley Griffiths, but I would say this anyway. I think, as a leader, she has given us the space in the industry to be able to express what we need, and she's given us responsibility, and that responsibility is very important. So, I think what you've got is you've got a mixture of a really good food and drink team in Welsh Government that's clearly going forward, clearly got its eyes on the prize, but it gives industry the space and the respect to have our view.

The reason why that's important is because then you come up with something such as the C-19 recovery plan, which I promise you was a real collaboration between Welsh Government and the food and drink board and industry. What that means is you then come up with a plan—in this case an 11-point action plan—that then the industry can coalesce around, and now we're turning it into a delivery plan. I'm actually as excited as you can be under this horrible pandemic—quite excited that there'll be some good stuff coming out of it. The reason why the new strategy was put on hold was because we felt the C-19 recovery strategy was a one-year project and that we would then replace it with the ongoing strategy, probably next year some time. So, that felt very logical.

I think the thing that we should bear in mind is that this is about creating—I think you said it then, not the culture but the environment for growth, and what you're finding is you've got businesses like Coaltown Coffee. These are inspiring businesses that, actually, move Wales away from commodity produce and relying on commodities, and I'm not going to highlight any, into added-value produce with real stories and a real provenance that actually resonate on the world market. You can tell I'm quite passionate about it, but I believe in those words, they're not clichés. We have to transform Welsh food and drink into that added-value position. So, I honestly have no complaints, and I would honestly tell you. We could always do with more budget though, to be fair.

I don't really have much more to add than what Andy has already said.

Thanks, Chair. I wonder if I could turn to the practical implications now of customs controls in trading with the EU. As it currently stands, how do you see this working? Where are your main worries and concerns? What do you need resolved in terms of customs control? I don't know, Julie, do you want to go first?

Yes, happy to go first. So, actually, in terms of customs and controls, what I would go back to is actually having the information that businesses need to be able to comply with new requirements. That's what's missing and, as I was saying, that's acting as a barrier to businesses getting ready for the end of the transition period. FDF has actually been compiling some unanswered questions about the future of UK-EU trade, and I think we're just about around 170 now, and that's just for food and drink. So, actually, getting those questions answered is really useful for businesses to prepare.

But, actually, what's more important is, even if all those questions were answered tomorrow, we have, what, fewer than three months now for businesses to prepare for 1 January, and, actually, what is really important is having periods of adjustment. So, for instance, new labelling requirements, if we just throw that in as an example—they would come in on 1 January, but, actually, it takes six to 12 months for businesses to be able to make those labelling changes. So, you're not going to have businesses be able to comply from that date, so it's really important to have that time where we're not just placing additional costs on businesses who have already gone through quite an unprecedented time with COVID, and also that's financially impacted them, even though they've been so resilient, and it's also reduced their operational capacity. So, actually giving them that time to adjust and get ready for the regulations I would say is the most important.

14:30

Before I pass on to our other witness, Julie, can I just ask you: does that mean, however big or small the proportion, there are going to be some businesses who inevitably now will simply not be ready because they don't have the clarity and there simply isn't enough time to get things in order? Is that the case, or are we overworrying about this?

I think, essentially, there are so many unknowns, and I think businesses are having to—essentially, they have already identified areas that they need to prepare in, it's just getting more guidance from Government on those changes, and getting, actually, in the agreements with the EU, those periods of adjustment so there isn't any disruption to production or to trade.

Okay. Andy, is there anything you want to add to that before I go on to questions around the border operating model?

I think the only key thing I'd say there, Huw, is on ports. I think people are nervous about how the ports will operate, particularly Holyhead in this context. Goods on market is an issue. I don't know whether you want me to cover that now or later. But I think the biggest thing, just to build on what Julie's just said, is I don't know whether it's a question of businesses being ready; I think the worst-case scenario is that, actually, they start exporting products, and that product ends up in a dock somewhere and is stuck. It can often be very valuable, and once it's stuck in a port, it's hellish difficult to get it out. So that's almost worse than not being ready.

So how are you dealing, both of you, at the moment with your members to ensure that we don't have goods turning up at a port for export without knowing, without certainty, that the right paperwork is in place? What advice are you giving to your members at the moment?

So, from my perspective, obviously we're not a member organisation—we represent. The first thing I'd say is it's about the border operating model, so I'm seeking absolute crystal clarity from Westminster on how that border operating model will work, and then once we've got that clarity, we then need to pass it on to the businesses. We're going to be running webinars, newsletters—but there's no point in running those until we know the facts. So, you're caught, really.

Julie, would you echo that at the moment on the clarity?

Yes, I would just echo that one of the biggest ways we're supporting members is—well, one I've just mentioned is unanswered questions. We've decided to compile those, because those are the answers that we want to provide to our members. So, we are raising those to the UK Government, and trying to get those answers to provide that clarity for them.

Okay. If I could extend this into just a couple of questions about the border operating model, which we've seen now sketched out—this three-stage approach for the phasing in of new controls, on importing goods from the EU into Great Britain. Let's turn to that first of all. Do you have any views at the moment on that aspect of it—of bringing goods from the EU into Great Britain with that three-staged approach? Julie.

I would have to come back to you on that one. I know there's been the announcement today, but I would have to provide some follow-up evidence for that one, because I don't have it to hand.

In all honesty, I'm not an expert in it. I can't answer your question properly, so we need to find out more. But it's a good question. I'll always say when I know, and I'll always say when I don't know.

Okay. It's more helpful, actually, to follow this up with some more detail and go away and look at it. Can I just ask, on a more general response to the publication of the border operating model, to what extent now this is helpful for your preparations for the end of the transition period? Have you got everything you need to know, or are we still waiting for the mists to clear a little bit?

Do you want me to go first, Julie? I think to a certain extent it is waiting for the mists to clear a little bit. The document's only just come out, and these things you need to reflect on. Personally, I like things mapped out in a nice easy diagram, to be quite honest, and it is incredibly complicated. I think, if you think about the elements of it, they are, in simple language, firstly the trader support service, which obviously is relating to Northern Ireland. Now, fundamentally we don't know whether we're going to be treating Northern Ireland as part of the—I'll try to get this right—whether it's going to be under the internal market Bill or under the approach we agreed with the European Union. And that fundamentally is very different. So, I don't know how the TSS is going to work; that's a biggie. The other issues, such as TRACES NT, exports going out—that's an existing system. So, we can get on with that, because we know that's going to be the system. The IPAFFS coming in is a new system, and I don't think people are aware of how to use it. So that's an 'inform'. So, I think the last two of those are the 'inform'; the TSS, I think, we just don't know which way that's going to go. 

14:35

Okay. Thanks, Andy. Much of this echoes what we heard in last week's evidence session, which is, 'Just give us the clarity, and we will do our very best to work with it because we have to do it'. Can I turn to our other witness?

It's a very similar response to Andy's. We still need to reflect on what's been published. And I would just say, echoing about Northern Ireland, there's still so much clarity needed there, I would say maybe even more so than with trade to the EU, particularly just about all those new different processes that will have to be in place. 

Thank you, Huw. Perhaps I could ask both of you: obviously, as you said, the border operating model just came out, literally, less than an hour ago; perhaps after you've had a chance to digest it and look at it, could you let the committee know what you see are the challenges that that model might provide for your sectors? That would be very helpful for us. 

Definitely. Will do, David.

Yes, definitely. 

Thank you, Chair. I think Huw's just covered most of my questions, but the one question I need to ask you is: we spoke to the hauliers and transport association last week; what engagement has your sector had with the hauliers and transport to ensure that you are prepared and they're prepared at the same time? Are you covering it like an umbrella organisation, so everybody knows which part goes to where? So, what talks have you had with the transport associations?

Julie, that's probably you, isn't it?

Yes. My policy colleagues, as part of their work, will be carrying out a number of conversations with all the different parts of the supply chains, because essentially the whole supply chain needs to be ready. If your suppliers aren't ready or the hauliers aren't ready then there are going to be difficulties when bringing in their goods, then that impacts their ability to make those goods, and access to materials could be restricted. So we do have those conversations, and just generally I wanted to say that we do bring together a large number of trade associations to discuss and share intelligence about all the different issues that they are facing so we know what is happening and we can address it and prepare for it. 

I would just like to support that, Mandy, because I sit on that round-table that the FDF have convened, and they've shown real leadership in this crisis—both C-19 and Brexit. So we have a regular round-table discussion, with the best part of 50 trade associations. You wouldn't believe there are that many. It's very important, because it builds a unifying voice of what the issues are. As a food and drink board, that's not really our role to engage with organisations such as that. We would rely on FDF because they're the experts in that area. 

Okay. Thank you. One final question from me, in that case: rules of origin are clearly an issue for certain sectors. For example, in the automotive sector, it's clearly deeply worrying about rules of origin for their business. How badly will it affect your sectors if we don't get clarity on rules of origin and flexibility on rules of origin?

I think—. Go on, Julie. 

I was just going to say that, if there isn't what we've termed—. It's one of our top priorities, really, in a UK-EU free trade agreement. We put out our priorities for a preferential trade agreement earlier this year, which I'm happy to share with the committee. And generous and flexible rules of origin was one of those top priorities because, essentially, even if we have a zero-for-zero agreement on tariffs, it'll be of little use if exporters aren't able to access those preferential tariff rates because of the strict rules that would limit the flexibility of food and drink producers.

14:40

And I would echo that, David. I think it's essential. I know it's part of the Japanese deal, and that's really encouraging, so, yes, I would just echo what Julie said. Would it be possible to make a comment on two things that you haven't asked a question on? Is that possible?

Okay. There are just two things that I would really, really ask for help with that the food and drink sector needs. Firstly, goods on market. I mentioned it earlier on, actually. It's absolutely essential that we get clarity on that, because what businesses are doing now is, obviously, stocking up their European markets either with raw materials or finished product, and we need to be absolutely sure that when businesses do that—and there are millions of pounds locked up in that—they can sell it after 1 January. That's not about beating tariffs, really, it's about being able to supply customers in the EU for one, two, three months. That is honestly one of my biggest asks that we need help on, please. The other thing is just clarity on the phytosanitary standards. I'm not an expert on it, but a lot of people are saying we need clarity on that. So, thank you for giving me the space to do that. 

Not a problem. Thank you for that information, because it is important that we ask the questions in relation to those areas that are of deep concern to industry. Therefore, I think we've come to the end of our session and the end of our questions, so can I thank you both for attending this afternoon? As you may know, you will get a copy of the transcript for today's session. If you identify any factual inaccuracies, please let the clerking team know as soon as possible so that we can have them corrected. Thank you for your time this afternoon. 

You're welcome. Thank you for your time. 

For Members, we will now take a short break while we do the change-over for our witnesses and get the technical connections sorted out. So, we'll restart at 14:50, okay?

Gohiriwyd y cyfarfod rhwng 14:41 a 14:50.

The meeting adjourned between 14:41 and 14:50.

14:50
3. Parodrwydd yng Nghymru ar gyfer diwedd y cyfnod pontio—Sesiwn dystiolaeth gyda rhanddeiliaid o’r sector pysgodfeydd
3. Preparedness in Wales for the end of the transition period—Evidence session with stakeholders from the fisheries sector

Okay. Can I welcome everyone back to this afternoon's session of the External Affairs and Additional Legislation Committee? We continue looking at our stakeholder preparedness issues. For the next session, I welcome Jim Evans from the Welsh Fishermen's Association, to consider the impact upon the fisheries around Wales, and we'll go straight into questions, if it's okay with you, Jim. 

That's fine, thank you, Chair. 

Hello, Mr Evans, it's good to see you. Could you just outline, do you think, just to start off our session this afternoon, where you think the Welsh fishing industry is in terms of the level of preparedness for the end of the transition period?

Thank you for that question, Alun. As I mentioned a few minutes ago, but for the record, the Welsh Fishermen's Association isn't a marketing organisation. So, as such, we're not directly impacted. However, trade is critically important to the Welsh fishing industry, with 90 per cent of shellfish going to the UK market. So, we're almost entirely reliant on exporters. So, there are kind of two parts to that question. One is: what do we need to do to make sure that all the fishermen and fishing businesses are prepared, of which there are one or two things but they're manageable? Then there's the broader question of how prepared the exporters are, because we're entirely in the hands of others. I have to say, I'm not clear on that at the moment despite asking the question several times. I think there's a job here that Government and, obviously, local authorities, could help with in terms of preparing, helping, and maybe hand holding, without being patronising, people through the exercise of making sure that we're prepared for, if anything, the worst-case scenario, so that we have a fail-safe built into that planning. 

Like I say, I've raised this question at round-table, and I'm not aware of discussions that are taking place and what kind of levels of help have taken place, and, of course, all of those interventions are also impacted by COVID. So, that would be a question that I would like some clarity on, because, as I say, there's a certain amount of things that we can do and we can help people to prepare for. Beyond that, it's kind of out of our hands. So, preparedness, as far as I'm concerned, where we now have catch certification and the like, that is generally—. Whilst the information would originate directly from the vessel, the catch certification process is part of the documentation that will be required for exporting and so would primarily be, as I understand it, the responsibility of the exporter. Having said that, export health certificates can't be issued if the business isn't a registered food business operator. So, the vessel has to be registered. And that was a surprise that came out very late in the 'no deal' preparation work, and it is something that has sort of stuttered and stumbled since. So, I haven't got a clear picture about the preparedness there, but that's something that I've got to make sure that we do very quickly, but there are other elements where COVID impacts on that, with resources, movements, whether people can actually do physical inspections, and all sorts of other priorities that local authorities are dealing with because of the public health emergency. 

So, that's a kind of quick summary and run-through of where we are at the moment, as I understand it. 

I'm grateful to you for that. That's very useful and very clear. It just feels from what you're saying that the industry itself feels very uncertain. It doesn't feel that it has the knowledge to understand what exactly is required of it or the situation that it will be in. 

I think that's a fair assessment, yes. 

Okay. You mentioned a few times in your earlier answer that COVID, and the wider health emergency, has had a significant effect on the ability of the industry to prepare itself. I wonder if you could outline for us what exactly you think that impact has been and what support the industry would require in order to overcome the issues it's facing at the moment and actually be prepared to face the end of transition.

14:55

Thank you for that question. That's an interesting question because there are so many different elements to it. In the first instance, you'd obviously be aware of the help and support that the industry received from the Minister. I think that was in June—around June time; I might be wrong. But the fisheries support grant was absolutely critical because the resilience, following the first three months of this year—we had the worst consistent weather for, I think it was, 20 years, so no-one, or very few, were able to maintain their livelihoods during that period—the resilience was in a very poor state. They then, being optimistic, tried to look into the spring to work their way out of that situation, invested what they had in looking forward, only to find that in March, then, the markets failed. So, they were in a very dire situation then. That money came at a critical time and provided a lifeline. But we find ourselves now, having moved on a few months, where the summer season has continued to be affected with varying degrees of success with direct selling and things like this.

But the truth of the matter is that there was, I think, certainly not a traditional, seasonal, what we would call 'your time to build your resilience for more uncertain and unsettled winter seasons'. So, clearly that hasn't happened, and, of course, the big risk then, going into the winter now, now that hospitality has largely ended and we've got further local and national lockdowns being implemented, which also has effects on the supply chain, again, is that that activity has dramatically reduced and we're fairly bracing ourselves for the next economic shock, and obviously being far less resilient to be able to withstand that. So, the first obstacle is perhaps considering that.

I know that Northern Ireland and the Isle of Man have come up with schemes recently as a second intervention. That certainly would be something that we'd need to look at, because I think, whilst that might be slightly aside from your question, if we haven't got that right, then the rest of that preparation and planning is unlikely to take place because people's priority is survival mode, and that affects all the way through the supply chain. So, I don't know—sorry.

No, look, Jim, that's a very clear answer. In the way you're speaking and what you've just said about the industry being in survival mode and other things, how would you characterise, how would you describe the morale or the way the industry's feeling at the moment?

I think, in a nutshell, the two most common—. 'Uncertainty' is a big word, but, with that, there has been frustration for many years, and we have a very high level of anxiety. I think those are probably the three words that I would use to describe people's or what general feeling is at the moment. And there are all sorts of things linked to that, not just COVID and not just the EU trade. All of these things are interlinked and all have their own dimensions and some will concern others in different ways. But I must say, more than anything I've ever experienced, the whole COVID issue has had more of an impact, I think, on people in terms of anxiety and well-being—that's probably been one of the most, I think, challenging areas that I've ever come across. Certainly, the discussions I've had through that period with people have been very difficult.

15:00

Okay. Are there two or three individual actions that the Welsh Government could take, say, today, tomorrow, next week, that would help resolve these issues in the industry?

I think, at the moment, being realistic and not shooting for the moon, I think it would be really helpful because with each of those parts of the discussion, whether it's COVID, whether it's future fisheries, whether it's a future fisheries agreement or a trade agreement, there are different negotiations going on at very different levels there whilst there's the other ongoing policy stuff that's being developed behind that. So, I think communications in some respects is good, and understandably, to an extent, maybe some communications are affected by COVID, and meetings certainly are, but communications and having good information on a regular basis, I think, would be really helpful, certainly as an organisation because then we can hopefully explain things if anybody is unclear—we would have clear lines and guidance rather than rely on interpretation.

Okay. I'm grateful to you for that, Mr Evans. Thank you very much.

Thank you, Chair. I wonder if I could ask you, at this very late hour of the day in terms of negotiations with the EU, whether you could give us a very clear view on how you see the implications of a possible 'no trade' deal on the Welsh fisheries sector or compared to some sort of negotiated agreement or some sort of free trade agreement. For you, what would you tell us and what should we be telling Welsh Government and UK Ministers at this moment?

A very relevant question. Of course, I think the only planning you can do with any confidence is to ensure that you plan for no trade deal; anything else, we'll have it covered if we make plans in that direction. I know that that's an area of work that, obviously, the Government is looking into, as opposed to a trade agreement or A.N. Other.

Having said that, you talked about, 'How does that affect us?'. Well, 'no deal' or no trade agreement—. Again, I wouldn't be telling you anything you haven't already heard but, for example, what it will do immediately is increase costs and administrative burden for exporters, and given that fishing shellfish would be subject to a variety of checks at border control points and inspections of consignments, then there would be the requirement to pass through border control points whilst potentially creating bottlenecks, because there's a limited amount of them, and that could create costly delays and risk to highly perishable goods. The traditional routes to markets and customers in the EU would no longer be able to be optimised because they'd have to go through border control points. So, that not only increases food miles, but increases transportation costs and the duration of the travel routes or the route to market and additional border delays. So, there's an increased risk potentially, then, in terms of compliance issues. It depends on how the authorities in the receiving member state responds if there are errors in the system at all. I think there's a whole variety of things that could be problematic in a 'no deal' situation, and that, sort of, underlines my concerns, as I was mentioning to Mr Davies earlier. That's what we should be preparing for and, ideally, that's what I think the Government and maybe the Government's agencies could do maybe more effectively, if they're not doing it already. I'm not aware that they are doing it at the moment; I certainly hope they are. But they need to be working with the exporters to make sure that they are fully prepared for that and understand that.

Of course, the bit that I haven't mentioned in there is that we also don't quite yet know—and I don't think people providing advice really know either—because I think the Northern Ireland protocol is still developing, and providing further trip hazards as people look into it further. All of those areas and a whole lot more are concerns, so when you look at, then, the potential of some sort of trade agreement, my assessment of that—and it is only an assessment—is that that would be broadly business as usual, with a certain amount of checks and inspections, but they would probably be within an agreed sort of process where they might be more random. So, there would be an increase in costs, I would imagine. Whether or not we get issues at border control points in a way that—perhaps that worst-case scenario; would it apply in the same way? Hopefully not.

But on the whole, yes, we wouldn't expect that to be, as I say, too far away from where we are at the moment with the exception of making sure that people are prepared for whatever changes do come as a result, and making sure that the costs and all the implications arising from whatever criteria are applied to that, that that is all clearly understood. And equally, wherever costs come into that chain, they generally fall down to the point of production, and that's a concern again for the catching sector, because that's a challenging area anyway. Sorry for not being too precise, but one is obviously a better outcome than the other.

15:05

Yes, you've covered a lot of areas there, all of which are of interest. I might come back to a couple of them, but could I just ask, so that we're absolutely clear at this point: what does the future look like for the fisheries sector in Wales and the people that you speak to, if we have a 'no trade deal' exit from the EU? Is it a 'difficult, but things will carry on', or will we see people go to the wall because of those additional costs and burdens you're talking about?

Obviously, trying to separate them out, there are probably two different answers to that question, and it would depend. I think your question is more centred around trade and not necessarily fisheries agreements, so if we keep that to the trade: yes, I think it adds to the point I made earlier about resilience. It's important to make sure, because 90 per cent of the landings in Wales are shellfish, and 90 per cent of those go to the European market, so we are heavily reliant on those markets. Asia's played a bigger part in recent years, but largely those percentages would apply. So, clearly, any disruption to that would be a very immediate impact, hence the reason why we need to focus on our planning and preparations to make sure that if there are any issues in the worst-case scenario, that we mitigate them at this stage.

You asked about the attitude, and I did say earlier: uncertainty, anxiety, frustration. All of these things arise out of not knowing and fear, and I'm not saying that people are fearful, but clearly, there is a lot going on, all in the same space. And, yes, I think the fear is if you're not communicating as well as you can, and bearing in mind that there is obviously a UK-level discussion going on, and then a devolved level of discussions, there are so many parts to these different puzzles, that that creates a lot more uncertainty, perhaps, and needs more clear explanation.

But, I would say, as Carreg does, yes, there is optimism that we can get through these difficulties, providing that all we've already discussed we're able to achieve, but we'll get through these difficulties, and that will provide for a far more optimistic future, particularly in terms of fisheries agreements. And I'll give you a statistic that perhaps puts this into context: in the Welsh exclusive economic zone, if you want to call it that, or in the Welsh zone, the harvest in that area of fishing shellfish annually is somewhere in the region of 83,000 tonnes, and you might be surprised to know that between 5,000 and 8,000 tonnes are landed by Welsh vessels. Now, I'm pretty sure, given the state of a number of ports and towns and villages throughout Wales, that those economic links for those additional 75,000 tonnes aren't being realised by Wales. I'm not saying that we need to be protectionist about anything, but I think there is a real opportunity to reset the dial and make sure that Wales and the coastal communities in Wales really benefit, whether it's economic, environmental or social justice, in that spirit, where that benefit and ownership and that resource is recognised as a Welsh resource, managed by Welsh Ministers for our future generations. That's what we want to see, what we would like. Obviously the discussions, as they develop, we need to see how that works and to make sure that that can work for and allow us to build for the future, and make sure that we maximise to Wales the benefits of those natural resources.

15:10

It'll be interesting to see, Jim, whether one of the outcomes of these negotiations going on will indeed be, let's put it in this phrase, repatriation of quotas in any way, because that's been talked about for years, not just in Wales, but wider—whether that will be a successful result, I don't know. But, as you rightly say, the other aspect is the massive export trade that we have, and whilst we're probably going to be pushed on time today, you mentioned there mitigations if we have a 'no deal' trade Brexit. I'd be interested within trade deal international obligations, what those mitigations could be, because it sounds to me like you're suggesting that maybe there's a role here for Welsh or UK Government to step in and assist an industry reliant on exports that faces additional financial challenges because of no trade deal. Unless there's something I'm missing, some other mitigations here you're talking about.

Sorry, I was muted then for a minute. I'm not sure I fully understand what was behind your question there. I apologise. Would you—? I was distracted by something going on behind me. Could you say that again, please?

Listen, don't worry. I think we've got enough from the answer that you gave before there to lead us on. Let me just move on rapidly just to a couple of other areas. You've mentioned already, Jim, the issue about fisheries businesses that intend to export to the EU being registered as food businesses, and some concerns that they might not all quite be there yet. So, let me just turn to something else here.

Some people will argue that one way to deal with this is to look at new export markets, and also domestic consumption of the fish that we land and the shellfish that we produce as well. To what extend do you think that that is a way forward, and to what extent do you think that enough focus is being put on that by not only the producers, but also by Government as well? 

Thank you for that question as well. I think, yes, interestingly—not that there is anything good about it, but as a result of COVID and the challenges in the marketplace, what that meant was not only the export markets ended overnight, but within a few days so did the hospitality, food retail and food service—they all came to an end. So, that was almost, probably, a worse experience than we were likely to see from a 'no deal' situation.

But, interestingly, what happened from that is, and I stress, where infrastructure and the connectivity were best placed, in places like the south-west and so on, there were very good campaigns that led to more direct selling. That has introduced the customers directly to very day-fresh seafood. How long that will last is another question, once things get back to whatever the new normal is, so it's unclear. It's certainly a really interesting idea, and it has developed in popularity. But, the reality is that I don't think, in all honesty, that that would replace the sort of volumes and flows of fisheries products. Potentially, as I was saying earlier, there may be additional opportunities that we are going to have further down the road, maybe.

So, we will always need to be, certainly, making sure that we're very much part of and have access to, in the most unfettered way possible, both EU markets and markets in the wider globe, accepting that a lot of these tariff checks and so on would apply. So, as I understand it, if we prepare for no trade agreement, or the preparation is for that potential outcome, then we should be in a position where all exporters and people in the supply chain are ready to address that.

The question mark that we don't yet know the answer to is what those markets will pay and how, then, the equation of the additional cost plays out in that scenario.

15:15

Thank you, Jim. Chair, just one final question: if I can ask you, Jim, in terms of the practical considerations going forward now, how prepared do you think we are now—fisheries businesses—to deal with customs controls, going forward, and that issue of the resource there in terms of checking consignments—local authority environmental health officers and so on? Are you relatively confident we've got sufficient resource in place?

No, I'm not, to be honest. Again, if we were preparing for no trade deal, then, of course, all of the inspections and checks would apply, certainly at the border control posts. But, the concern is, through other working groups within the Government developing scenarios around either a trade deal or no trade deal, what's become clear is that the qualified vets in that are an issue at the minute, because, obviously, it's not just fisheries products—live animals and so on, slaughterhouses and everything else are a particular issue. There's a quite alarming shortage there.

In addition to that, where you go on to the EHOs in the local authorities, I'm not entirely clear what the situation is now, but that was—I don't think it was a statutory duty for the local authorities and, you know, there were issues there. So, I think that might have primarily been a resource issue as to whether or not there could be sufficient staff available to carry out those functions.

In addition to that, certainly for the seafood sector, the majority of consignments that are exported are generally out of hours. Of course, up until that point at least, EHOs were generally only available nine to five, Monday to Friday.

So, there are a number of questions there, but, more importantly, when you lay over that the COVID issue and potential movement restrictions or health issues, God forbid, there could be other layers that add to those challenges.

15:20

Thank you, Jim, I appreciate your answers. Thank you, Chair.

According to the Wales seafood industry dashboard, in 2017, there were 756 fishermen and 315 active vessels in Wales alone. Are many of these members of the Welsh Fishermen's Association?

Good question. Last count, and this was fairly recent—I think we've got 206 vessels, but it's kind of an odd situation, within our membership association. Over and above that, we also provide help and support to people who aren't members of our association, so there's a broader reach than that. But I think the most recent figures through the Marine Management Organisation were suggesting that there was somewhere in the region of 240 or 250 active vessels. So, I think 206 vessels is a fairly good representation.

And could you tell me how the WFA is funded, please?

Yes, we're partly funded by the Welsh Government.

Thank you. You were speaking earlier about the exports to—about Welsh shellfish. I acknowledge that shellfish caught in Wales goes predominantly to Spanish and Italian markets, but those companies from those countries actually come over here to buy our shellfish. So, they're actually importing, rather than us exporting, that product. And I'm told that they are confident that the demand for our shellfish will remain strong, even in the event of reverting to WTO rules. Has the WFA had any direct discussions with those companies?

As I explained earlier, we're not primarily a marketing organisation, but, obviously, given the reliance on export markets traditionally, and obviously in the future, we're obviously interested in the information that we get from colleagues that are involved. So, through some of the exporters we know, people linked to those through trade and what have you, we do and have heard similar comments. But, then, I'm not entirely clear, when you look at perhaps the implications of one outcome or another, whether these things could actually happen and be compliant at the same time. There were questions around that.

I do accept that some of the European buyers do come into the UK, but there are a number that will go direct from ports, in Poole and so on, directly from the merchants in this country. So, it's kind of a mixed picture. I've got to say, there have historically been traditional routes and the more optimised routes for getting products to market—collecting and getting those to markets. So, again, that is something I think that needs to be clearly explained, because, obviously, exporters need to have information to make plans. What I'm a bit concerned about is that the majority of the information—. Whilst there was a lot of discussion in terms of preparation for no deal, there has not been as much—and presumably this is largely to do with the implications of COVID—there's not that same engagement, as far as I'm aware, as we move closer to the end of December. But, for all the reasons that you talk about, I think it's more important than ever that that dialogue with exporters is more on a one-to-one basis rather than what's currently available, which is links on gov.uk or from the sea fish industry authority or other agencies that provide information, links, like Business Wales and so on.

The thing is, that relies on people having the time, given all the challenges they've got at the moment, to read what are fairly complicated documents to then understand what are the key things that apply to them. I think there is a role for people within Government to dedicate that time and expertise to helping them through that process, rather than rely on them on the assumption that they might've followed a link or been able to follow a link and then understand what they need to do from there. 

15:25

Thank you. Could you tell me what actions the WFA have taken in conjunction with Welsh Government and UK Government to support new entrants into the industry, especially in the finned fish or white fish sector, as we prepare to reclaim our fishing waters in 2021?

Well, as you know, there are a number of initiatives where we've tried and piloted training schemes in the past, but clearly what is needed and what we've been advocating is for schemes that are similar to those in the agricultural sector, where there are grants available to help and support new entrants. There is a fund—well, a consequential that came across to Welsh Government from a fund that was introduced I think last year by Michael Gove. It was an additional £37 million that went into the European programmes at a UK level, of which we had £2.4 million as a consequential. That fund has kind of evolved over a period. It's not active yet, but I think the scheme that's been developed to deliver that, because Wales isn't delivering that through the European maritime and fisheries fund programme, is taking a different route. And what I'm hopeful of, because we did discuss it at length, is that a new entrants scheme would be a clear part of that fund as and when that programme opens. 

Brilliant. I can see from the Wales seafood industry dashboard that the sea fisheries in Wales are declining year on year. Fishermen are telling my office that this is down to increasing regulation by the Welsh Government. Would you agree with their views?

I think, to be honest, it's a very complicated area. I know it's said lightly, but I think there's some truth in it—we're probably more regulated than nuclear power plants. That is complicated, because we're not a one-size-fits-all industry either, and different regulations apply in different ways. But, then, when you lay fisheries regulations, which are one area to deal with, you have, quite rightly, environmental legislation that overlays that. I think, traditionally, there's not been a very good join-up there. It is improving, but as I was saying earlier, not just with the issues that we have to deal with now, but there are wider policy issues that are developing all the time, certainly in terms of environmental legislation, and it's kind of keeping a track on all of that so that you make sure that, when it comes out, it is fit for purpose and there aren't any unintended consequences.

The complexities that exist, where they are part of the common fisheries policy—that's quite challenging to get them changed, although not impossible. Having said that, maybe in the new regime, through the Fisheries Bill, I think that would be a far better process to the fisheries monitoring plans, and the regulation, then, would be designed, I would hope, to facilitate delivery of the plans and the objectives in the Bill.

And the challenge remains—

I was just going to say that the challenge remains: how do we deal with some fairly, not antiquated but certainly old legislation between now and then?

You were quoted in the Fishing News as saying to DEFRA—[Inaudible.]—in the event of losing EU markets. On what evidence did you base that statement?

Sorry, I didn't hear the first part of that question.

Sorry. You were quoted in the Fishing News as saying to DEFRA that the Welsh fishing fleet would collapse within two weeks in the event of losing EU markets. On what evidence did you make that statement, Jim?

15:30

Right, there's a bit more to it than that. If I've been quoted at all accurately, the figures that I have used consistently are between four and six weeks. And the reason for that is—well, obviously, you've referred to the dashboard and the economic information because you would have got that through our website anyway. Essentially, what it'll demonstrate is that the fishing industry is almost like a 24-hour marketplace, and people work through the week to deliver to the market at the end of the week, or they might have different structures for doing that. So, any disruption in that marketplace, given the points I made earlier, because we have a largely small-scale fleet, and whilst you can't apply that scenario, maybe, to absolutely everyone in that fleet, of the composition and the fleet size, which is nearer 400—I think round about 380 to 400 vessels—you know, the majority, 90 per cent of those, are under 10m vessels. So, you would categorise those in the area where they were dependent on markets. If that market was taken away, then they would be in a very precarious position. Given the challenges that have been in relation to COVID, and the removal of those markets, I think that has placed a whole lot of pressure on, and given some substance to those, what were, I would say, not evidence, but more educated guesses at that time, but they were quite considered. And I'm not just someone that's turned up off the street. I was a fisherman myself, so I know how dependent on the markets I was, and I know there will be others that are probably in a far more dependent position than I was, maybe. I might have been fortunate, but there are so many different levels of dependency within that, that we took the view that four to six weeks we would see business failures in the event of a 'no deal'. So, that was mainly related to market dependency.

For shellfish, I hasten—

Yes, okay, thank you. Can you just outline what engagement your sector is having with the hauliers who transport the produce to the EU? [Inaudible.]

That is an area where we haven't had any discussions directly with them. The reason for that being that the majority of the exporters that would take seafood are specialised and they use vivier haulage to a large degree, and they generally either own their own vehicles or are part of a supply chain to get from A to B. So, that kind of hopefully emphasises my point in relation to making sure that the exporters are properly prepared, because that is an element that they would have to contend with, and I realise there are a number of challenges there as well.

Okay, last question—tiny one. Have you still got your boat and do you still go out in it?

I wish I did. No, sadly, we put all our time and effort into developing an organisation to help represent the industry in Wales. But, yes, it got to a stage where it was lose the house or sell the boat, so I had to sell the boat.

There's a sacrifice for you.

Thank you, Jim. We've reached the end of our session. But if there are any issues you may wish to raise with us, particularly as the border operating model that has come out—I know it doesn't affect you directly, but your members may want to look very carefully at how that is all going to apply to them and the paperwork they may have to do as a consequence of that. Please let us know, because that's just been published today and you haven't had time to see that. But please let us know if there are any issues on that in future, okay? 

I will do. Thank you very much, Chair. And thank you, everybody, for your questions.

We've now reached the end of the session and we now take a five-minute break. We will restart at 15.40 p.m. for the next and final session this afternoon. Members, I had hoped we would get on to some other business, but I think we won't get anything done in the next five minutes, so we will continue as normal as per the schedule. And I appreciate the pressures upon some Members for other meetings afterwards. We'll do what we can when we can, okay? So, we'll have a five-minute break.

15:35

Gohiriwyd y cyfarfod rhwng 15:35 ac 15:40.

The meeting adjourned between 15:35 and 15:40.

15:40
4. Parodrwydd yng Nghymru ar gyfer diwedd y cyfnod pontio—Sesiwn dystiolaeth gyda rhanddeiliaid o’r diwydiant amaethyddiaeth
4. Preparedness in Wales for the end of the transition period—Evidence session with stakeholders from the agriculture industry

Can I welcome everyone back to this afternoon's meeting of the External Affairs and Additional Legislation Committee, and our continuing taking of evidence in relation to the preparations for the end of the Brexit transition period? Can I welcome, in our next session, representatives from the Farmers' Union of Wales, Nick Fenwick, and the National Farmers' Union, Huw Thomas? We want to specifically look at some issues relating to agriculture this afternoon. Because of the time, we'll go straight into questions, if that's okay, and we start with Laura Jones. Laura.

Thank you, Chair, and thank you both for attending our committee today. I'm just wondering if you could give us a general overview on how you feel how prepared the agricultural sector is for the end of the transition period, please. Obviously, the coronavirus pandemic has affected everyone and everything, and I'm just wondering how much you think that has impacted on that, and also how the UK-EU trade negotiations have also impacted on your level of preparedness. Thank you. 

Shall I start then, Laura? Yes. Okay. Thank you for the opportunity to appear before the committee this afternoon. In terms of the preparedness, it's difficult, obviously. We are represent the diversity of what are ultimately small and microbusinesses, really. [Interruption.] Sorry, I'm getting some noise from the background; just one second. Just one second. Sorry. Right, sorry. Sorry.

I was just explaining—. We represent, obviously, a selection of small and microbusinesses in many cases, and I think that a lot of those probably lack the resources to perhaps understand what the issues are, entirely, for them. We've had—you know, Brexit has loomed before; we thought that we were about to leave. I think that that has probably caused some problems of its own as well.

What we have in agriculture, of course, is quite long production cycles. So, when you are committing to producing livestock, et cetera, there is a long production cycle involved. Growing crops as well—a long production cycle involved with that. So, that can present its own challenges as well.

I think, really, for us, it comes down to the preparedness of our customers as well, because we are dependent on being able to export. Obviously, few farmers are in situations where they export directly themselves. They sell to somebody who exports, and if that person isn't ready then that will obviously impact on the farm gate, but it's not something that the farmer might necessarily exert much control over.

Obviously, there are some practical steps that farmers can take to try and mitigate the potential impacts of Brexit. So, before, farmers were being urged, for example, to build up stocks, ensure that they had adequate stocks of veterinary medicines, et cetera, and vaccines, because a lot of those are imported from the EU. But, obviously, that has got implications in tying up working capital, et cetera.

In terms of the EU negotiations, I suppose—you know, there have been so many twists and turns that I think a lot have perhaps sort of lost interest, to an extent, in the twists and turns that are ongoing in the negotiations. But we are obviously approaching the end point now, and we will have, as a union, a job in communicating to our members over the next few weeks and months what the implications of whatever is agreed, or not, with the EU will be for our members' businesses.  

I've got very little to add. I think that agriculture finds itself in the position—and primary producers find themselves in the position—that many others involved in supply chains that export to the continent find themselves in: that is, they are unable to prepare for the unknown, and we are still in the unknown. And, indeed, the Welsh Government and others also find themselves in that position.

As Huw says, it is those who are directly involved in exporting that are best able to prepare for some of the challenges, but they are in a similar sort of hiatus, in a sense. I've probably told this committee and other committees before that the only thing that we've been able to do with farmers, aside from the issues that Huw has said about stockpiling, if you think it's appropriate—and that, of course, is a risk in itself—is to say, 'Get to grips with your financial position so that, whatever the impact, you know where you can cut your inputs, so that you can adjust the business very rapidly to this array of potential Brexit scenarios after the withdrawal period.'

15:45

Okay. Thank you, Nick. Thank you, both, for your contributions there. It's clear, as you said, that farmers can't do an awful lot to prepare, but you've advised them well by the sounds of it. How has the level of engagement been with the sector from the UK Government and the Welsh Government? Have they helped you prepare for the end of this transition period as far as they can do? Have you had the support, Nick?    

Given that agriculture is devolved to Wales, I suppose that the prime responsibility for doing that would fall to the Welsh Government, and, in all fairness, they have done so in as much as they can do it, given the complete lack of knowledge and, as Huw referred to, the sort of stop-start, the sort of groundhog day of Brexit, which causes people to switch off when they hear a message for the fifth time, and they realise that it was maybe wrong the first time because Brexit didn't actually happen. That causes a huge amount of confusion, so it's very difficult to know how they could have informed farmers.

Notwithstanding that, when you do actually go through the process of visiting either UK Government or the Welsh Government's websites, either you end up in a position where it simply says, 'This website will be updated based on what comes out of the negotiations', or it gives you such a huge and complicated array of different links to different pages that, in all fairness, any small business owner is likely to get very, very lost among that. So, that's the position that I think most farmers find themselves in.  

I don't think that there's a huge deal I can add to that, really. There has been, obviously, some frustration as the negotiations haven't perhaps gone as smoothly as had been anticipated, and I think that a lot of people would have hoped that some sort of deal would be hoving into view now, that we would know roughly what sort of future relationship we would have with the EU, and, obviously, we are not at that point, and we are only a few weeks from Brexit day, really.

We've had good engagement with Welsh Government. Welsh Government have, as far as they have been able to, engaged well with our sector, but, clearly, they are not in the driving seat in terms of the negotiations; that is being done elsewhere. Maybe there is some frustration on the part of Welsh Government about that, but that is a matter for them, of course.

Thank you, Huw and Nick. What do you think the implications of a no trade deal Brexit on the Welsh agricultural sector would be, and how a negotiated agreement based on a free trade agreement may differ from that? Huw.

Shall I start? Yes. Okay. I think that we've been quite explicit from the beginning that a 'no deal' Brexit would be disastrous for our sector, really. We are heavily dependent on being able to access export markets in the EU, as we know. We export approaching 40 per cent of Welsh lamb, and about 90 per cent of that export goes to the EU. So, to lose that would be a huge blow to our sector.

There are obviously issues with the beef sector and with the dairy sector as well that would stem from a 'no deal' exit. So, I think that it would have a huge impact. We would lose those markets. Even if we lost them briefly, perhaps for a matter of a few months, obviously customers in Europe will seek alternative suppliers, and it will be incredibly difficult for us to re-establish ourselves in those markets then. So, a 'no deal', with the full brunt of the EU's common external tariff on our exports, would be huge. The procedures that would be involved in exporting—you know, we would be shut out of that market. 

In terms of a free trade agreement, well, obviously, a free trade agreement, there's a whole spectrum of them, but, obviously, the landing area that the UK Government is looking for, and the EU, is a zero tariff, zero quota type arrangement. And, obviously, we would welcome something like that. We don't want tariffs or quotas on our goods. But we're not as naive as to think that it would be business as usual either, because there will be a host of non-tariff barriers that will bite on our exports, even in the event of a free trade agreement. So, there will be customs procedures, which aren't there at the minute, which will bite from 1 January even in a free trade agreement. So, the trade will not be as frictionless or as free as it is at the moment. We have to remember that. Diolch. 

15:50

Yes, there's little I can add to that, except to emphasise the costs of those non-tariff barriers, which are quite striking. The tariffs in themselves are huge, but, even without those, they've been estimated to be very significant for all industries. I think it's also worth noting the dangers of having a lack of equivalence between port checks—checks as products come into the UK and as products leave the UK. The EU is likely to do what it does with all countries and would be stringent with its checks in order to protect its industries and its plant and animal health. And there is a real danger that we will take a soft-touch approach simply to try and keep the prices down. And that will act, in effect, as a sort of valve for produce that will be undercutting our own produce, and that would be very unfair, and that's even in the case of a free trade agreement. 

Diolch yn fawr, Cadeirydd. Ac mae'r pwynt olaf yna oddi wrth Nick yn rhedeg yn llyfn i'r cwestiwn cyntaf. Wrth gwrs, rydym ni yn sôn yn fan hyn am barodrwydd ar gyfer diwedd y cyfnod pontio o ochr amaethyddiaeth. Ac o fewn yr agenda weddol eang yna, awn ni ar ôl cwpwl o faterion mwy penodol. Felly, yr un cyntaf ydy ffermio organig, ac, yn nhermau cywerthedd, equivalence eto—fel roedd Nick yn sôn—mae hynna yn berthnasol i nifer o feysydd, ond yn nhermau ffermio organig, mae yna ansicrwydd yn fanna ynghylch sut fydd hwnna'n gallu effeithio ar y sector, ac mae yna nifer o oblygiadau eraill hefyd yn deillio o'r un math o ansicrwydd. 

Felly, yn nhermau ffermio organig, a allwch chi olrhain rhai o'r heriau mae diwedd y cyfnod pontio yn ei osod? Diolch. Dwi ddim yn gwybod pwy sydd eisiau mynd gyntaf—Nick, efallai. 

Thank you very much, Chair. And that last point made by Nick runs very well into my next question. We are talking here about preparedness for the end of transition in terms of agriculture. And, within that broad agenda, I'd like to pursue a few specifics, and the first is on organic farming. In terms of equivalence, as Nick just mentioned, it's pertinent to a number of areas, but, in relation to organic farming, there is some uncertainty on equivalence and how that will have an impact on the sector, and there could be a number of other implications because of that uncertainty. 

So, in terms of organic farming, could you set out some of the challenges that the end of the transition poses? I don't know who'd like to go first—Nick, perhaps. 

Dwi'n hapus i neidio i mewn. Wrth reswm, mae'r sector organig yn ofnadwy o bwysig i Gymru, yn ogystal â'r sector sydd ddim yn organig, ac mae hynny'n cynnwys allforion organig. Y gwir yw dŷn ni'n tynnu allan o'r farchnad sengl; os dŷn ni yn mynd i mewn i free trade arrangement, dŷn ni'n tynnu allan o gymaint o gytundebau—mae organig jest yn un ohonyn nhw lle mae'r safonau'n cael eu cydnabod gan y gwledydd mewn ardal sy'n cynnwys 500 miliwn o bobl, felly marchnad ofnadwy o bwysig. Ac mae colli hyd yn oed tamaid bach o'r farchnad drwy golli cydnabyddiaeth o safonau fel organig yn mynd i gael effaith enfawr. 

I'm happy to jump in there, yes. Of course, the organic sector is extremely important to Wales, as is the non-organic sector, and that includes organic exports. The truth is that we are withdrawing from the single market; if we do enter free trade arrangements, we are withdrawing from so many agreements, and organic is just one of those, and that's in a market of 500 million people. And losing even part of that market by losing recognition of things such as organic standards is going to have a huge impact. 

Huw, oes gen ti agwedd wahanol, neu efallai eisiau ategu hynna?

Huw, do you have a different approach, or would you like to echo that?

Dwi'n credu ategu'r hyn ddywedodd Nick byddwn i'n ei wneud i ddweud y gwir. Mae'r sector organig, wel, mae'r ddau sector, wrth gwrs, y sector gonfensiynol yn bwysig a'r sector organig—. Mae sector organig Cymru yn fwy o faint nag un Lloegr, dwi'n credu, so mae'n mynd i gael mwy o ardrawiad arnom ni os dŷn ni'n colli'r mynediad hwnnw. Ond, ie, y broblem yw, wrth gwrs, sicrhau ein bod ni'n medru cael ein cynnyrch organig ni i gael ei gydnabod fel cynnyrch organig wedi Brexit, os nad oes yna gytundeb yn cael ei wneud. Ac mae hwnna'n mynd i fod yn anodd iawn, achos, os nad yw e'n cael ei gydnabod neu ei gymeradwyo fel cynnyrch organig, wel, mae ein cynhyrchwyr ni yn mynd i fod ar eu colled; maen nhw'n mynd i fod yn gwerthu i mewn i'r farchnad gonfensiynol. Diolch.

Yes, I'd certainly echo Nick's comments. The organic sector is very important, as is the conventional sector. The organic sector in Wales is larger than that in England, I think, so it's going to have more of an impact on us if we lose that access. But the problem, of course, is to ensure that we have our organic produce actually recognised as being organic after Brexit, if there is no agreement. And that is going to be very difficult indeed, because if it isn't approved as organic produce, then our producers will lose out; they are going to be selling into the conventional market with that produce. Thank you.

Diolch am hynna. Symud ymlaen at fater arall, sydd efallai'n haeddu mwy o sylw. Rydym ni wedi hen arfer—. Yn y pwyllgor iechyd, rydym ni'n sôn am heriau cael meddyginiaethau os bydd na ddim rhyw fath o fargen, a bod y cyfnod pontio'n dod i ben, a bod yna ddim cytundeb, yn nhermau mewnforio, allforio meddyginiaethau milfeddygol, a hefyd bwyd anifeiliaid—y math o bethau sydd yn mynd nôl ac ymlaen rhwng yr ynysoedd hyn a'r cyfandir. Felly, os bydd yna ddim cytundeb ar 1 o Ionawr, a allwch chi olrhain yr heriau sydd yn fanna? Mae'r llawr neu'r sgrin i chi rŵan. Wrth gwrs, rydym ni'n disgwyl bod yna systemau mewn lle. Ydych chi'n gwybod pa fath o systemau sydd mewn lle i sicrhau bod allforion yn mynd un ffordd a mewnforion y ffordd arall o'r meddyginiaethau hollol hanfodol bwysig ac ati, a'r bwydydd hefyd—i sicrhau bod y systemau yna yn gallu parhau? Huw, wyt ti eisiau mynd yn gyntaf y tro yma?

Thank you for that. And moving on to another issue that perhaps deserves more attention, as a health committee, we're regularly talking about the challenges of getting medicines if there's no deal in place when the transition period ends, and that there is no agreement in place, in terms the import and export of veterinary medicines, and animal feed imports—the kinds of things that go back and forth between these islands and the continent. So, if there is no deal on 1 January, could you tell us what the challenges may be in that sector? The floor is yours, or the screen is yours, rather. Of course, we expect there to be systems in place. Do you know what kind of systems are in place to ensure that the exports can travel one way and the imports the other way in terms of these crucial veterinary medicines and so on, as well as the animal feed—to ensure that those systems can continue to work? Huw, would you like to go first this time?

15:55

Iawn, dim problem. Rŷch chi wedi taro'r hoelen ar ei phen, fanna, Dai. Mae yna broblem gyda meddyginiaethau anifeiliaid rŷn ni'n mewnforio. Dwi'n credu bod 90 y cant o'r meddyginiaethau ar gyfer anifeiliaid a'r brechiadau hefyd yn dod o'r cyfandir. So, os ŷn ni'n colli hwnna, mae hwnna'n mynd i greu problem go iawn i ni, a hefyd rŷn ni'n mewnforio lot o fwyd anifeiliaid.

Dwi'n credu bod Llywodraeth y Deyrnas Unedig newydd gyhoeddi y prynhawn yma eu protocol nhw ar y ffin ynglŷn â rhai o'r pethau yma. Dwi heb gael cyfle i edrych ar hwnna. Ond, ydy, mae Llywodraeth y Deyrnas Unedig wedi sôn yn y gorffennol eu bod nhw'n mynd i gael rhyw fath o drefniant lle maen nhw'n dod mewn â'r pethau yma gam wrth gam, yn araf deg. Ond, ydyn, rŷn ni'n rhagweld y bydd yna rai problemau yn sicr, a dyw pethau ddim yn mynd i redeg yn llyfn. Ac, wrth gwrs, mae'n rhaid inni gofio, mae nwyddau'n symud rhwng y Deyrnas Unedig a'r cyfandir—wel, mae'r system yma ar loop, onid yw e? Er efallai bod y Llywodraeth fan hyn yn gallu cymryd camau i adael pethau mewn yn haws os oes angen, dŷn nhw'n ffaelu rheoli beth mae Ewrop yn ei wneud ynglŷn â gadael ein nwyddau ni i mewn i Ewrop. So, felly, pan mae hwnna ar gylchdro, mae yna bosibiliad o broblem a phethau'n cael eu dal fyny, a'r cwbl yn dod i stop wedyn. 

Yes, no problem. Well, you've put your finger on the issue there, Dai. There is a problem with veterinary medicines. We import 90 per cent of veterinary medicines and vaccinations; I believe that figure is correct. So, if we lose that, then that would create a very real problem for us, and, of course, we import a great deal of animal feed

I believe the UK Government has just published a protocol on the border operating model. I've not had an opportunity to look at that as of yet, but the UK Government has mentioned in the past that they are going to have some arrangement in place where they bring these things in in a phased manner. But we do anticipate that there will be problems and things aren't going to run smoothly. We have to bear in mind that goods travel between the UK and the continent—well, that system is a loop, isn't it? Although the Government can take some steps to make imports easier, they can't control what Europe might do in terms of dealing with our exports to the European market. So, when you have that cycle, there is the possibility of problems and hold-ups, and everything coming to a halt possibly. 

Y cyfan y gallaf i ychwanegu at beth mae Huw wedi'i ddweud ydy bod yna broblem arall yn fanna, sef mewnforion, os gallaf i eu galw nhw'n fewnforion, o filfeddygon. Dŷn ni'n dibynnu gymaint ar y nifer o filfeddygon sy'n dod fewn o Ewrop yn enwedig. Mae bron 100 y cant o'r rheini sy'n gweithio yn ein lladd-dai yn bobl sydd wedi dod o dramor, un ai am gyfnod, neu efallai jest am ychydig o flynyddoedd. Heb y rheini, dŷn ni'n wynebu problemau enfawr, yn enwedig gan ystyried y nifer o checks ychwanegol y bydd rhaid inni eu gwneud er mwyn allforio ein bwyd a chydymffurfio efo rheolau Ewrop a'r gwledydd eraill. 

All I can add to Huw's comments is that there is another problem here, namely imports, if I can call them imports—I'm talking here of vets. We are reliant on so many vets travelling from Europe to work here. Almost 100 per cent of those working in our abattoirs are people who have travelled from abroad, either for a period of time, or maybe a few years. And without those people, we're facing huge problems, particularly given the number of additional checks that we will have to carry out in order to export our foods and to comply with European rules and other nations' rules. 

Sorry about that, Chair—the iPad went off. Hi, guys. Could you set out your views on how effective the support services have been, provided by Welsh and UK Governments, please?

Shall I go first? I think I referred to this earlier on in terms of what was available, generally through the internet, which is the way in which things are done nowadays, isn't it? And, obviously, the coronavirus outbreak has meant that direct contact has been very difficult anyway. But given this lack of information as to where we will end up in a few weeks' time, it's been virtually impossible to provide anything more than vague ideas.

As Huw referred to, the UK Government did today release its guidance, or its updated guidance, on what will happen with imports and exports for those who are directly involved in that type of activity. I think it's 138 pages, and it is very, very technical after getting to certain sections. And that could be updated in a couple of weeks' time again, because of the way in which negotiations are going. So, it's difficult to provide that advice, and I think we have to acknowledge that.

The key issue behind that problem is the timetable that has been dictated by the UK Government, because, usually, countries would do this over a period of maybe 10 years, and maybe they'd have a draft agreement in place in the eighth year, and then, businesses might have two years or more to prepare for the implications, whereas, here, we're talking about businesses preparing over periods of weeks for massive, massive changes. 

16:00

I don't think I have much to add, really, to what Nick has just said. We very much hoped that we'd have a better idea of how things were going to pan out at this quite late stage, really. We've been asking for clarity on a number of issues for quite a long time. Things like the tariff rates that would apply in the case of a 'no deal'—we've been asking for a long time; we had those back in May. The guidance that's come out today—we've been awaiting that for a long time as well. So, things have been quite slow coming out from UK Government, really, where this information is really quite important to us and our sector. 

Thank you. And can you just outline your experience of the Trade and Agricultural Commission?

NFU Cymru is represented on there, but that person isn't me, it is our president, John Davies. John is signed up to a confidentiality agreement as to his participation in that, so he can't share anything with others on that, I'm afraid. So, I can't—. Other than to say, we welcome the establishment of the Trade and Agricultural Commission. We think it's a positive step. It needs to have teeth and it needs to have a proper oversight role. But as to its work, I can't comment, because I'm not privy to that, I'm afraid. Thank you.

And I'm in exactly the same position. Our president sits on it, but has signed, like John Davies has signed, the Official Secrets Act 1989, for understandable reasons, because they are dealing with very sensitive issues that relate to trade negotiations. However, I think it's worth noting that there is a consultation that has been launched by the trade commission, and the deadline for that is 23 October, and also that they have arranged regional roadshows, and invitations have been sent out to certain stakeholders to attend those roadshows. So, that would probably be the first actual opportunity people will have to interact with that commission in any way directly. 

Yes, I myself was watching Michael Gove on a video last night with the trade guy as well, and every time they got a question from the Commons select committee, a lot of it was, 'Sorry, but we can't tell you', because of the internal trade discussions and that.

Okay, final question: is there anything else that the Welsh Government can do to support your sector as it prepares for 2021? Thank you. 

I don't think there is—. It is difficult for the Welsh Government. I appreciate the—. The difficulty they face is that they're not in control of this process, but I think that, sort of—. I suppose we would say, maybe in terms of the future agricultural policy—for example, we might suggest one step they could take is not to rush into anything, to see what sort of form the future relationship with the EU takes, because that will have a big bearing on the profitability or otherwise of farms in Wales. So, to be mindful of that, really, and not perhaps rush into anything until we've got a bit of a clearer picture of the direction that we are heading in, ultimately. 

Yes, I would agree with that. And, in many respects, you might say that the Welsh Government has done a great job in terms of reducing that concern, by significantly slowing down its original timetable for transition to a new scheme. That doesn't mean that we don't have concerns about the direction of travel, but the original intention was to move very rapidly, more rapidly than England, in fact, which would have placed us in a new—. With complete uncertainty, at a time of complete change, there would have been a self-inflicted additional change for the industry, through the rapid introduction of a new scheme, and I think we're grateful to the Welsh Government for understanding how reckless that would have been.

16:05

Okay, thank you, both. Just two questions from me on what you've just said. The organic farming agenda, for example—now, some years ago, I met with the Norwegian ambassador to the EU, who explained the challenges that they faced in getting organic salmon approved within the EU. Do you foresee challenges ahead if we don't get a proper deal in relation to recognition of organic produce within Wales for the EU markets? I see you nodding, so I'm assuming that, yes, you do. And are those issues being addressed, do you think, in the discussions that are currently ongoing?

I imagine the discussions—obviously, we're not privy to what goes on in those discussions, as none of us are.

These secret meetings —[Inaudible.] Doesn't help with Brexit.

One would hope so, but I expect there are other issues on the table as well, and we need to be realistic about that. But notwithstanding that, I think organic is one of many other categorisations, if I can call it that, that are difficult to achieve and get through the EU and that we risk losing, if they're not included in the trade deal. And that extends to geographical indicators as well, which are important for Wales, such as Welsh lamb.

There's not much I could add to what Nick has said, really. We're mindful of the challenges organic faces. Yes, we have a larger organic sector in Wales than they do in England. The certification issues are, yes, unresolved and have got big implications for organic producers. If they can't have their product recognised in Europe, then, obviously, the premium that they command for that product disappears and it's very bad news for their businesses. So, yes, I think you're right: there needs to be a resolution to this issue as well.

Okay, thank you. Do any Members have any other questions? I think you've answered them all and given us full confidence that we know where we're going. Obviously, your members are facing some challenging times ahead, as the uncertainty continues at this point in time, and, hopefully, agreement will be reached and therefore relaxation of our uncertainty. What type of timescales do your members need in reality to be able to go through the processes? Will you be able to deliver in—because we are talking about probably two months—will you be able to deliver a situation, within two months for your members, so that, come 1 January, they'll be able to continue operating in the normal manner that you are, or do you think there will be some disruption in January and February of next year as a consequence of this?

I think it's likely that there will be some disruption. You know, we've seen the contingency plans that the UK Government is making around reasonable worst-case scenario, for example, with lorry parks in Kent et cetera. We sell a highly perishable product that has to arrive in the market in pristine condition, really, and that is a particular challenge for our sector, which some sectors don't have, if they're just making widgets or metal components. It's also critical, but for our product, not to be able to reach the EU markets in premium condition would be hugely problematic. So, we've got some additional challenges as well.

I can add very little to that. I know you've heard about the extreme challenges for perishable products from Jim Evans this morning, haven't you? We're facing the same situation with regard to some of our produce, and there are certain supply chains that may be far less affected. But on average, there will be a huge, huge and relatively sudden—well, a very sudden impact in the worst-case scenario across the industry as a whole.

Yes. I think both witnesses have answered all the questions that Members would have in their usual, very direct and blunt way, and I'm grateful to them for that. There's one issue that arose during that session, which is the secrecy of the Trade and Agriculture Commission, and it's not a matter for the witnesses in front of us this afternoon, but it is a matter, I think, for the committee that we're unable to effectively scrutinise what has happened there in terms of preparedness and also establishing a negotiating mandate and unable to hold anyone to account for that, because of that secrecy. So, I think that's something we're going to have to return to. As I say, it's not a matter for these witnesses this afternoon, but it is a matter for us as a committee, I think.

16:10

Sorry, could I just make a point, I think in the same vein as Alun was just saying, really? The safeguards that they have in Parliament around the ratification of trade deals and international treaties are pretty weak under the terms of the Constitutional Reform and Governance Act 2010. Although it's perhaps out of the scope of this committee, I think it is a point worth making that the CRAG Act was passed 10 years ago and its provisions didn't anticipate that the UK would be pursuing an independent trade policy. The oversight role that's carved out for Parliament there is pretty weak. It's not really fit for purpose any longer, I would suggest, with no disrespect to the authors of the Act, but I think times have moved on and we need to ensure that if we're taking back control, then Parliament is put at the heart of this process of overseeing our future trade agreements. Diolch.

I would say 'Parliaments' are put at the heart of it, our democracy is at the heart—

And I would agree entirely with you, Alun, and Huw, Chairman. We are facing a position where we are in the opposite situation to the EU where there is transparency regarding their negotiating position, and yet we face, potentially, ending up with a trade deal that hasn't really properly been scrutinised. I appreciate the House of Lords has tried to amend that, perhaps in a symbolic way, as much as anything, given that it'll go back to the House of Commons, but it really does need amending, not just in the context of the current negotiations, but in the context of any future negotiations.

Thank you both, and can I thank you for your time this afternoon? As you will know, you will receive a copy of the transcript for any factual inaccuracies. If you do identify them, please contact the clerking team as soon as possible, so we can have them corrected. So, thank you for your time this afternoon, and I look forward to perhaps meeting you again.

Thank you, Chairman. Thank you, committee.

Diolch yn fawr. Thank you.

5. Cynnig o dan Reol Sefydlog 17.42(vi) i benderfynu gwahardd y cyhoedd o weddill y cyfarfod
5. Motion under Standing Order 17.42(vi) to resolve to exclude the public from the remainder of the meeting

Cynnig:

bod y pwyllgor yn penderfynu gwahardd y cyhoedd o weddill y cyfarfod yn unol â Rheol Sefydlog 17.42(vi).

Motion:

that the committee resolves to exclude the public from the remainder of the meeting in accordance with Standing Order 17.42(vi).

Cynigiwyd y cynnig.

Motion moved.

For committee members, now, we move on to the next item on the agenda, which is a motion under Standing Order 17.42(vi) to resolve to exclude the public from the remainder of today's meeting. Are Members content to do so? I see they are, and, therefore, we'll now go into private session for the remainder of today's meeting.

Derbyniwyd y cynnig.

Daeth rhan gyhoeddus y cyfarfod i ben am 16:13.

Motion agreed.

The public part of the meeting ended at 16:13.