A Pembrokeshire farmer says a significant cut to the Welsh Government budget for agriculture at a time when it expects farmers to invest heavily in meeting tough new water pollution regulations has left some questioning their future in the industry.

The government is funding increases to the transport and NHS budgets with savings from elsewhere, including £37.5m from the rural affairs budget, although it insists this money is an underspend and, as such, has been reprioritised.

But Simon Davies, a dairy farmer who is the county chairman of NFU Cymru in Pembrokeshire, says that cut will be widely felt in agriculture.

“It is a tough time at the moment, I have had two phone calls this week from next generation farmers who are in their early 30s who are considering if they really wanted to farm any longer because it is getting so difficult with regulation and to make a living from farming,’’ says Mr Davies.

Cutting the agriculture budget when farmers were already under extreme financial pressure could drive farmers off the land, he warns.

“It is really disappointing that they have pulled the plug when dairy and livestock producers must invest in facilities to comply with new regulations.

“They have told us we need to do the work but where do they expect us to get the money from.’’

The Water Resources (Control of Agricultural Pollution) (Wales) Regulations 2021 require farms to have at least five months’ worth of slurry storage and impose a three-month ban on slurry spreading in the autumn.

The government expects this to cost farmers £360m in infrastructure costs, but as the cost of materials and labour has escalated it could well be more.

Mr Davies had initially budgeted £120,000 for his own investment in a new slurry lagoon and in roofing the collecting yard at Trewilym Uchaf, Eglwyswrw, to comply with the rules but the final sum was £175,000.

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Concerns have been raised too about the budget for the Habitat Wales Scheme, which is replacing Glastir.

The Farmers’ Union of Wales (FUW) says it would be “deeply concerning’’ if reductions to the rural affairs budget led to a significantly smaller sum available for the Habitat Wales Scheme budget.

“The FUW remains extremely concerned that, should the new scheme be financially unattractive to farmers, any resultant underspend will represent a further loss of income to the sector,’’ says the union’s president Ian Rickman.

A government spokesperson said its ongoing commitment to farmers was demonstrated by it prioritising the budget for the Basic Payment Scheme 2023.

That commitment also extended to the introduction of the interim Habitat Wales scheme and funding over for nutrient management over many years, the spokesperson added.