Welsh farming leaders respond to publication of Sustainable Farming Scheme (SFS)

This scheme is the primary mechanism through which farm businesses in Wales will be able to apply for farm support from 2026 onwards as the Basic Payment Scheme (BPS) is phased out. 

Building on the revised SFS framework published in November last year, the scheme is structured around the principle of universal, optional and collaborative layers, providing both a level of universal consistency for all farm businesses and an opportunity to do more if they wish.  

“This is a scheme for the whole of Wales – a whole farm, whole nation approach,” said deputy first minister Huw Irranca-Davies.    

The Welsh Government explained that the scheme is designed to secure the future of food production while also protecting the environment for generations to come. It recognises farming’s vital role in Welsh communities and culture and addresses challenges like climate change and restoring nature.   

How does it work? 

The Sustainable Farming Scheme will begin on 1st January 2026, with the application form for the universal layer of the scheme being available on the Single Application Form (SAF) via Rural Payments Wales (RPW) online from March through to 15th May each year.       

An annual universal payment will go to farmers joining the scheme who follow the scheme requirements, including a set of universal actions. Many of these actions will be familiar to farmers in Wales, whether beef, dairy, arable, upland, lowland, extensive or intensive. 

The Welsh Government said that the scheme has been made less complex with fewer administrative requirements. Several universal actions have been cut and built on the tried and tested processes and systems of Rural Payments Wales (RPW).  

All farmers entering the scheme will need to complete an opportunity plan for woodland and hedgerow creation in the first year of entry into the scheme. They will need to demonstrate progress towards their plan by the end of the 2028 scheme year.    

Support will be provided for tree and hedgerow planting in the optional layer, including for agroforestry, and there will be a higher payment rate for tree planting during the first three years of the scheme.  

The Welsh Government confirmed that farmers are not expected to plant trees on their most productive land. They will decide where to plant, with clear advice and guidance to ensure the right tree in the right place.  

Farmers in the scheme will need to have at least 10% of their land actively managed as habitat to benefit biodiversity and support nature recovery alongside food production. A range of temporary habitat options are available to choose from if farmers need to do more to meet the 10% requirement. 

‘We accept that the scheme is not perfect’ 

Speaking in response to the publication, president of Farmers’ Union of Wales, Ian Rickman, said: “The scheme published today represents this prolonged period of negotiation, marking a generational milestone for the future of Welsh agriculture. 

“To highlight some of the key successes, we have secured a total budget for the Universal Baseline Payment and BPS taper combined of £238 million, providing workable payment rates and much-needed stability for the sector. This includes the provision of universal payments for common land rights holders. 

“We have retained and strengthened the application of capped and redistributive payments, a longstanding policy position for the FUW and one that maximises the amount of money going to typical Welsh family farms and rural communities. 

“We have also reduced the number of universal actions from 17 to 12 with added flexibility and simplification, including exemptions for tenants and the removal of the unworkable 10% tree cover scheme rule. 

“However, we accept that the scheme is not perfect. The 10% habitat scheme rule will be a concern for many, as will the management requirements that will apply in those areas despite these being less prescriptive than previous agri-environment schemes.” 

‘Transition must be just, not rushed’

CLA Cymru has welcomed the official publication of the Welsh Government’s Sustainable Farming Scheme (SFS), which has been unveiled ahead of the Royal Welsh Show.  

Victoria Bond, director of CLA Cymru, who played a central role in the ministerial roundtable convened by the deputy first minister, helping to shape the scheme into a more practical model, said:

“Whilst we did not agree to all the full scheme details, we do wish to recognise the dedication of the deputy first minister and our colleagues on the ministerial roundtable in the hours of dedication and work involved. This spirit of collaboration has improved the scheme significantly. 

“Most frustratingly, the total budget remains static, and there is a reduction in the BPS taper. However, we do welcome the consideration of a social value payment and the inclusion of payments on common and designated sites.” 

Ms Bond added that “transition must be just, not rushed”. She said that Welsh farmers need clarity, stability, and a clear long-term funding commitment.  

Fraser McAuley, senior policy adviser at CLA Cymru, added: “We have worked closely with Welsh Government to improve this scheme. Significant progress has been made, but there is still more to do. 

“While we recognise improvements in this latest iteration, particularly the removal of the 10% tree cover requirement and inclusion of commons, key issues like tapering of BPS and the lack of a multi-annual budget remain major concerns. 

“We will continue to work with the Welsh Government to provide the tools, clarity and stability land managers need.” 

CLA has established its key concerns: 

• The scheme is still incomplete: Optional and collaborative layers are under development and not yet available. 

• Budget uncertainty: There is no multi-annual commitment. 

• Tapering: BPS will drop to 60% in 2026, 40% in 2027, 20% in 2028, and 0% in 2029. Contradicting previous expectations. 

• Payment mechanism: A ‘Ready Reckoner’ tool will provide estimates, but not guaranteed income. 

• Cap at £300k and tapering above £25k: Larger estates already impacted by Glastir and Habitat Wales changes face further funding cuts. 

CLA Cymru said that its members will continue to press for greater transparency, member readiness support, and multi-annual funding guarantees. 

The team will hold member briefings, provide written guidance, and participate in Royal Welsh Show events on Monday 21st and Wednesday 23rd July and a series of autumn roadshows. 

‘Many will feel stuck between a rock and a hard place’

NFU Cymru said that the Welsh Government has previously confirmed its intention to reduce the BPS to 60% of current payment levels in 2026, having reassured farmers that there would be no ‘cliff edge’ in funding through the transition to new schemes.  

Last November, the government reiterated that it was still its intention to phase out the BPS during the transition period through an incremental reduction in value (20% per year) starting in 2026.  

NFU Cymru said that reneging on this commitment in today’s announcement overshadows much of the positive work undertaken to improve the SFS following the highly controversial ‘Keep farmers farming’ consultation of late 2023/early 2024.  

NFU Cymru president Aled Jones said: “This unwelcome decision by Welsh Government is extremely worrying for farmers in Wales who had previously been informed that those opting not to enter the new Sustainable Farming Scheme in 2026 would receive 80% of their BPS. Farming businesses have forward planned on this basis. 

“This development is even more of a blow given significant guidance and technical detail is yet to be published, which farmers need if they are to make informed decisions about whether to enter the scheme from 1st January 2026.” 

Mr Jones added that with harvest well underway and next year’s cropping and livestock purchases already in motion, many farmers will not be able to pivot their business to join the new scheme from January.  

“Farming families are also grappling with difficult conversations and decisions on how to restructure their businesses to address the changes being forced upon them by the introduction of the UK government’s family farm tax from April 2026. With Welsh Government now slashing the first year of the tapered transition from the BPS, many will feel they are now stuck between a rock and a hard place.”  

The NFU Cymru president said that while the deputy first minister has listened and acted on a number of concerns expressed by the union in recent years, the level of detail, constraints, administration, costs and bureaucracy attached to the SFS is “significant and far greater than anything seen before”.  

“We remain deeply worried about the burden this scheme will place on a sector low in confidence and already dealing with a mountain of red tape. 

“We are pleased that Welsh Government has confirmed a social value payment recognising the wider benefits provided by farming. However, without publication of Welsh Government’s impact assessment and modelling, it is impossible to understand the impact the scheme will have on farm businesses and the supply chain.  

“This information must be made available as soon as possible, and there must be a commitment from Welsh Government to change the scheme if certain sectors or areas are disadvantaged or the scheme is shown to hamper and harm our ambition to continue to grow the Welsh food sector from farm to fork.” 

READ MORE: First minister faces backlash from Welsh farming community

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