Agricultural Wages (Wales) Order 2025: Integrated Impact Assessment

The Programme for Government outlines 10 well-being objectives aimed at enhancing Wales’ seven long-term well-being goals. The current proposal focuses on building an economy grounded in fair work, sustainability, and future-oriented industries and services. It also aims to improve the quality of life in cities, towns, and villages.

Key goals from the Wellbeing of Future Generations (Wales) Act 2015 include:

• creating a prosperous Wales with a thriving rural economy that generates wealth and offers equal opportunities
• ensuring Wales is ecologically, economically, and socially resilient
• supporting cohesive communities with a vibrant culture and a thriving Welsh language

The current regulation is the Agricultural Wages (Wales) Order 2024 (“the 2024 Order”). This policy aims to introduce the Agricultural Wages (Wales) Order 2025 (“the 2025 Order”), which will set minimum hourly pay rates and other terms, conditions, and benefits for agricultural workers (as per the definition of agriculture stated within the Agricultural Sector (Wales) Act 2014 https://www.legislation.gov.uk/anaw/2014/6/section/18). 

The Order will be enacted under the authority of the Agricultural Sector (Wales) Act 2014 (“the 2014 Act”).

The Agricultural Advisory Panel for Wales (“the Panel”) is an advisory body established under Section 2(1) of the Agricultural Sector (Wales) Act 2014. It was created by the Agricultural Advisory Panel for Wales (Establishment) Order 2016 (“the Panel Order”) on 1 April 2016. The Panel consists of seven members:

• two representatives from Unite the Union
• one representative from the Farmers’ Union of Wales
• one representative from the National Farmers’ Union Cymru
• three independent members, including an independent Chair

The independent members and Chair are appointed through the Public Appointment Process.

Article 3(2) of the Panel Order sets out the Panel’s functions which are:

1. promoting careers in agriculture
2. preparing agricultural wages orders in draft, consulting on such orders and submitting them to the Welsh Ministers for approval
3. advising the Welsh Ministers on such other matters relating to the agricultural sector in Wales as the Welsh Ministers may require. 

The primary role of the independent members is to provide expert opinions during discussions on key issues and to offer advice on the opportunities and challenges facing the industry.

All Panel members have a crucial responsibility to ensure that fair and reasonable draft Orders are developed regarding minimum pay levels and relevant terms and conditions for agricultural workers in Wales, as outlined in the Agriculture Sector (Wales) Act 2014.

The Panel convened on 9 and 10 September 2024, to discuss potential changes to the 2024 Order. A targeted consultation on these proposed changes was held from 18 October to 15 November 2024. The proposals were distributed via email to a wide range of stakeholders and were also made available on the Welsh Government Consultations webpage. Hard copies were provided upon request.

There were only two responses to the consultation document. One response supported the proposed changes, while the other contended that minimum rates should not exceed those in comparable sectors without clear justification. This respondent also agreed with the goal of simplifying overtime rules but noted that the new wording might not achieve this objective. Additionally, they raised issues with the holiday pay calculations for irregular hours workers and suggested aligning the accommodation offset allowance with national minimum wage legislation. 

The Panel acknowledged and considered both responses. However, on balance they decided to maintain their original proposals, while noting that some points raised will be considered in future discussion.

The Panel submitted their proposals to Welsh Government on 16 December 2024. 

The minimum rates proposed in the 2025 Order will replace those set in the 2024 Order. This update aims to ensure that agricultural workers continue to receive fair pay and necessary protections that reflect their work and responsibilities. The 2025 Order will also maintain provisions that reward agricultural qualifications and experience, including pay differentials based on skill levels at each grade which encourages skills development within the sector.

The 2025 Order will be implemented as part of the Welsh Government’s broader Tackling Poverty agenda, aiming to support the growth and prosperity of rural economies and contribute to the overall Welsh economy.

Since these regulations are secondary legislation, a Regulatory Impact Assessment has been conducted.

How have people most likely to be affected by the proposal been involved in developing it?

The Agricultural Advisory Panel for Wales, an independent body, advises Welsh Ministers on the Agricultural Minimum Wage arrangements and employment terms for agricultural workers in Wales. The Panel comprises seven members, including representatives from the Farmers Union of Wales (FUW), the National Farmers Union (NFU Cymru), UNITE the Union, and independent members (including the Chair).

A four-week consultation was conducted, inviting responses from individuals with protected characteristics. Key stakeholders, such as farming unions, UNITE, and agricultural colleges, were included. Panel members were encouraged to disseminate the proposals through their networks.

The consultation was accessible on the Welsh Government Consultations webpage, with hard copies available upon request.

What are the most significant impacts, positive and negative?

The provisions on minimum wages and training and skills development in the agriculture sector are expected to benefit workers and their families, helping them advance their careers. Additionally, fair pay and allowances, along with a better-skilled workforce, will bring broader benefits to the Welsh economy and communities.

The provisions of the Order, including minimum rates, apply to all workers aged 16 and over. This ensures fair minimum rates for young workers, which are affordable for farm businesses, thereby supporting the sector’s financial viability.

All school children working in the UK are protected by the Children and Young Persons Act 1933, which limits the types of work and hours for young people of compulsory school age.

The Panel and Welsh Government are collaborating with farming unions and employee representatives to promote agriculture as a viable career path for all, including those with protected characteristics. There is no evidence of disproportionate impact or discrimination, however, significant and ongoing issues have been identified in obtaining robust data on protected characteristics, relevant sectors, hours worked (e.g., part-time, casual) etc.

Primary among these were the lack of stratified data from farm businesses on current wages since the discontinuation of the England and Wales survey in 2011 and a baseline data gathering exercise in 2021 yielded limited results.  Knowledge and Analytical Services (KAS) have low confidence in overcoming these challenges without significantly increased investment. Even with this investment, assurance of successfully obtaining the necessary data is low due to its sensitive nature. 

The 2021 Census showed that almost 65 per cent in Gwynedd, 55 per cent in Anglesey and over 40 per cent in Ceredigion are Welsh speakers. Only positive impacts on the Welsh language have been identified. 

The Order supports rural communities where the Welsh language is prevalent, helping to maintain cohesive and thriving Welsh-speaking communities. The economic impact of fair minimum rates and recognition of skills in the grade structure support the sustainability of rural communities. 

A socio-linguistic survey of the Welsh language in its heartlands is part of the Cymraeg 2050 Action Plan.

The Panel’s work, enforcement of the 2014 Act, and related Orders, consultations, and guidance are all conducted bilingually. Welsh is proactively offered as the medium of communication at meetings and events, and all publications and public messaging are bilingual.

Strengthening agricultural work opportunities in Wales will help retain workers in traditional Welsh language heartlands, where agriculture is a key employment sector.

In light of the impacts identified, how will the proposal: 

• maximise contribution to our well-being objectives and the seven well-being goals; and/or,
• avoid, reduce or mitigate any negative impacts?

The 2025 Order aims to support the creation of a prosperous, secure, united, and connected Wales. It aligns with the Wellbeing of Future Generations (Wales) Act 2015 by:

• developing a rural economy that generates wealth and provides equal opportunities
• ensuring Wales is ecologically, economically, and socially resilient
• supporting cohesive communities with a vibrant culture and thriving Welsh language.

Ensuring fair wages for agricultural workers and supporting rural communities is crucial. This includes raising household incomes, improving the skills base of young people, and helping families in poorer communities. The provisions for apprenticeships and training within the 2025 Order will help young people gain skills and qualifications, enhancing their future job prospects.

Enforcement procedures are in place to ensure compliance with the minimum pay rates and terms and conditions of the Order.

How will the impact of the proposal be monitored and evaluated as it progresses and when it concludes? 

The Welsh Government will monitor the impact of the 2025 Order through ongoing dialogue with key stakeholders, including the Agricultural Advisory Panel. This will include assessing the effects on the agricultural sector and young workers.

A helpline number and email address will be available to respond to queries related to the 2025 Order.

This information will help assess the effectiveness of the Order and inform future Orders.