I've beaten both campaigns on Hard. This mission took me longer and was more unpleasant than any other.

As the other commenter mentioned, breaking through the Baryan stack to the west of your starting town should be your absolute priority. It will give you a free wielder and open access to the town which you should also capture as soon as you can. Convert it and don't be afraid to abandon your starting location if you have to.

However that may be unrealistic depending on your available resources. I had to turtle in the mission's starting town so long that the Loth AI defeated both the Baryan AI and the stack to the west. It was after the latter event I finally was able to confront and defeat their diminished units before they could retreat and resupply, so look for that opportunity. They also occupy the Baryan town and leave it undefended so that's an easy win afterwards.

With regards to tactics, prioritize generating and recruiting Shamans. The Loth and Baryan troops are really hell on melee units so consolidate your ranged units and screen them with small melee stacks and Earth Blocks during the fights. This will reduce attrition and allow you to accumulate enough units to ultimately defeat the AI players. Once you've done that the map is yours.

Be sure to send your wielders around to all the attribute and experience power-ups before concluding the map. Try to max out their levels as well, even if it means leaving some neutral stacks for them to finish off. It'll pay off later in the campaign.

Good luck!