Concerns raised over details of landmark farm subsidy scheme

Emily Price 

Questions have been raised about funding allocated to the Welsh Government’s new farm subsidy scheme and the absence of an economic impact assessment.

The final version of the Sustainable Farming Scheme (SFS) was unveiled on Tuesday (July 15) after several years of delays and climb downs.

The scheme will be the primary mechanism through which farm businesses in Wales will be able to apply for farm support from 2026 onwards.

It will replace the Basic Payment Scheme (BPS) which will be phased out over the coming year.

The new approach focuses on sustainable food production that responds to the climate and nature emergency.

The scheme sparked protests from farmers last year over its targets for tree cover and the methodology of payments.

U-turn

Since then Welsh ministers have U-turned on the requirement for farmers to have 10% tree cover on their land in order to qualify for the subsidy.

The Welsh Government says the new policy is less complex with fewer administrative requirements and will secure the future of food production while also protecting the environment.

The equivalent of this year’s BPS budget (£238m) has been committed to the universal payment tier for the first year of the scheme.

Additional money will be provided for optional and collaborative approaches.

This will provide further income for farmers who plant trees and hedges to improve or create new areas of habitat.

The aim is for the scheme to deliver at least 17,000 hectares of new tree planting in Wales by 2030 as well as 1,500km of hedgerow extension.

The new version of the SFS was broadly welcomed by environmental organisations and the Farmers’ Union of Wales.

Concerns

But opposition parties in the Senedd have raised concerns about the scheme’s budget  and the fact that no economic impact assessment has been published yet.

The Welsh Conservatives have repeatedly called for an assessment to accompany the new SFS to give farmers an understanding about the real-world consequences of the scheme.

The party says that without it – farmers will be “left in the dark”.

Shadow Cabinet Secretary for the Economy and Rural Affairs Samuel Kurtz has also called for clarity around future funding, given farming unions’ calls for a £500 million as well as a vote in the Senedd on the scheme to give it democratic legitimacy.

He said: “Welsh Labour has damaged its relationship with farmers and as things stand, their new Sustainable Farming Scheme does little to rebuild trust.

“There are aspects of the scheme that can be cautiously welcomed, notably, the scrapping of the 10% tree planting requirement, though a scheme-wide tree planting target remains alongside a 10% habitat target, which could reduce food production in Wales.

“The decision to match the universal tier budget with BPS for 2026 only will cause grave concern for farmers who will fear future cuts to the universal tier budget after 2026.

“Crucially, without an accompanying economic impact assessment, we are still in the dark about the real-world consequences of Labour’s scheme, there is a lack of clarity and security around future funding and without a vote in the Senedd, the new scheme lacks democratic legitimacy.”

Improvement

Plaid Cymru has similarly raised concerns about the scheme’s budget and lack of impact assessment.

Spokesperson for Agriculture and Rural Affairs, Llyr Gruffydd said:”It’s clear that this scheme has evolved from its initial form. As the farming unions and others have rightly pointed out, the scheme is an improvement on the one originally proposed.

“This progress reflects the significant work undertaken by both the agricultural and environmental sectors, and we thank them for their efforts.

“While we welcome the funding commitment of £238 million for the coming year, a one-year pledge is simply not enough.

“Questions remain around the balance of investment across the scheme’s tiers, the structure of the transition period, and the lack of clarity surrounding the long-promised social value payment.

“We trust these issues will be addressed swiftly, because, as ever, the devil will be in the detail.”

Job losses

In the Senedd this afternoon, the First Minister Eluned Morgan was asked by the Tory leader Darren Millar how many jobs losses the new scheme will cause and what will be the financial hit to the rural economy.

Baroness Morgan said that a “ready reckoner” tool would be available to farmers looking to sign up to the scheme so they can see how it will impact there business.

She said: “Prior to the Royal Welsh, people will be able to punch in their particular circumstances and they will be able to assess how it affects them.”

Mr Millar said people working in the farming sector would prefer to know if their jobs are on the line.

The First Minister said that Welsh farmers were in this situation because the people of Wales had voted for Brexit.

She said: “We had to create a new regime because the people of Wales voted for a new regime – including many farmers who were very keen to leave the European Union.

“We made it clear to them before that vote that there would be consequences.

“This is a part of the re-negotiation that has happened as a result of Brexit.

“We have listened and there will be major environmental benefits.”

Nation.Cymru asked the Welsh Government why they haven’t yet made the economic impact assessment for the SFS available to farmers.

We did not receive a response.