A court ruling on water quality regulations could be the "nail in the coffin" of many farm businesses in Pembrokeshire, according to a county farmers' union leader.

His warning comes after the High Court rejected a legal challenge from NFU Cymru to the Welsh government’s decision to make the whole of Wales a nitrate vulnerable zone (NVZ).

One of the issues NFU Cymru was testing was the government’s decision not include a grassland derogation option – in England and Northern Ireland farmers in NVZs can apply for a derogation to apply 250kg/hectare (ha) of nitrogen from livestock manure over a calendar year, rather than the usual limit of 170kg/ha/year.

High Court judge Sir Wynn Williams concluded that Welsh farmers did not have a “legitimate expectation” that an 80 per cent grassland derogation would be available to them under the new regulations.

Pembrokeshire dairy farmer Roger Lewis said he and other farmers were “bitterly disappointed’’ by the ruling.

“With all the other pressures on food production, this will be the final nail in the coffin for many businesses,’’ suggested Mr Lewis, of Poyerston Farm, Milton, who is the Pembrokeshire county chairman of NFU Cymru.

“Without the derogation we have a stocking rate imposed on us that, for the dairy industry, will ultimately mean that less milk is produced. It will have repercussions at a farm level and right through the supply chain, to the customer.’’

It will have major implications for farms under TB restrictions too – Pembrokeshire is a hotspot for this disease.

“If a farm has a TB outbreak they could very quickly become overstocked because its outlet for sales is effectively shut down overnight,’’ said Mr Lewis.

“Nothing has been built into these regulation to allow for that.’’

The ruling means that the new water quality regulations, which came into force across Wales on April 1 last year, will remain in place in their current form.

Welsh farmers face up-front costs of £360m and ongoing costs of £14m a year to comply with the regulations on slurry spreading. This includes upgrading facilities to ensure they have storage capacity for at least five months’ worth of slurry.

“A good starting point would be for Welsh government to increase the support offered to farmers in order to be able to comply with these regulations,” said NFU Cymru president Aled Jones.

A Welsh government spokesperson said it was “committed to working with industry, partners and stakeholders to reduce the impact of agricultural and other pollutants’’.

“What matters now is we all work together to tackle the continuing pollution in our waters and support our farming industry,’’ it said.

In contrast to the situation in agriculture, water companies have the legal right to pump sewage out of the sewerage system and into rivers through combined sewer overflows following heavy rainfall or a storm.

The most recent figures show that raw sewage was dumped into Welsh rivers more than 100,000 times in 2020 – for almost 900,000 hours – across more than 2,000 water treatment works and sewer overflows across the Dwr Cymru Welsh Water network.