Farmers risk being priced out of agriculture by big corporations buying up farmland for carbon offsetting schemes, according to a new report on family farms in Wales.

The findings of an inquiry by the Welsh Affairs Select Committee paint a concerning picture for Welsh agriculture, an industry where the average farm size is 48 hectares – in England it is 87ha.

From pressure on incomes and land availability to a lack of opportunity for new entrants, the report highlights some of the key concerns and sets out a series of recommendations to governments to address the issues.

The latest figures on farm incomes show that 19 per cent of Welsh farms have a farm business income of less than zero and the average income across all farms in Wales is just £26,000.

The report suggests that Welsh farmers believe that economics are stacked against the family farm, with those businesses often less resilient to economic shock.

There is also concern about competition for farmland from woodland creation with farmers ‘priced out’ of buying or renting productive land.

The committee says it opposes any attempts to ‘game the system’ by companies investing in viable farming land to offset carbon emissions accrued by businesses elsewhere.

“Tree planting schemes are an important pillar in attempts to preserve our natural environment for future generations and were never intended to be exploited to the detriment of current businesses or future generations of farmers,’’ it says.

It urges the Welsh Government to consider whether there are appropriate safeguards and improve the transparency and regulation of carbon offset schemes, including establishing a register of carbon offset schemes.

The committee wants to see more support for new entrants – just three per cent of farmers in Wales are under 35; this support might include loans and grants for capital purchases and improvements and payments for public goods such as cultural preservation and community strength.

Preserving the Welsh language and culture is one of the reasons why this support is needed, the MPs say; 43 per cent of all Welsh speaking workers are employed in agriculture, forestry and fishing sectors and with over-60s dominating the farming workforce the language could be at risk when they retire.

The committee also recommends that the UK and Welsh governments work together to create a scheme to support farmers in planning for their retirement.

The economic impact on Welsh agriculture from free trade agreements with nations including Australia and New Zealand also needs investigating, the committee believes, recommending that the UK Government publishes cumulative impact modelling to show the impact of FTAs with a Welsh-specific impact assessment.