Welsh Government unveils landmark farm subsidy scheme
Emily Price
The Welsh Government has unveiled the final version of its landmark subsidy scheme for farmers.
The Sustainable Farming Scheme (SFS) will be the primary mechanism through which farm businesses in Wales will be able to apply for farm support from 2026 onwards.
The major changes revealed on Tuesday (July 15) will replace the Basic Payment Scheme (BPS) which will be phased out over the coming years.
The new financial support for farmers marks a significant policy shift in the way land management for public goods is supported in Wales.
Climate change
After seven years in the making, the new approach focuses on sustainable food production that responds to the climate and nature emergency.
The controversial scheme sparked protests from farmers last year over its targets for tree cover and the methodology of payments.
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 has been made less complex with fewer administrative requirements.
Deputy First Minister with responsibility for Climate Change and Rural Affairs, Huw Irranca-Davies said: “This represents a landmark moment for Welsh agriculture, with farmers playing a central role in our food security, environmental protection, and maintaining the distinct cultural heritage and language of rural Wales.
“Our ambition is to see a thriving and confident agriculture industry in Wales, that is built around innovation and growth, to rise to the challenges we face and make most of the opportunities available.
“We hope the majority of farmers join the Scheme to help us realise this ambition. We firmly believe it will provide much needed stability whilst helping farm businesses to be more resilient, productive and sustainable.”
‘Generational milestone’
The Farmers’ Union of Wales (FUW) described the final version of the SFS as “a generational milestone for Welsh agriculture”.
FUW President Ian Rickman said: “During the past year alone, we have attended in excess of 60 meetings with the Welsh Government totalling over 300 hours of negotiations.
“I can assure FUW members and the wider agricultural community that we have left no stone unturned over the past seven years in our ambition to secure a viable post-Brexit farm support framework.”
The SFS will begin on 1 January 2026 with the application form for the universal layer of the scheme available via Rural Payments Wales from March through to 15 May each year.
An annual universal payment will go to farmers joining the scheme who follow the requirements including a set of universal actions.
Cut
Many of the actions will be familiar to farmers in Wales, whether beef, dairy, arable, upland, lowland, extensive or intensive.
The number of these actions has been cut and built on the processes and systems of Rural Payments Wales.
All farmers entering the scheme will need to complete an opportunity plan for woodland and hedgerow creation in the first year of entry.
They will need to demonstrate progress towards their plan by the end of the 2028 scheme year.
Generous support will be provided for tree and hedgerow planting in the optional layer of the scheme, including for agroforestry, and there will be a higher payment rate for tree planting during the first 3 years of the scheme.
Farmers are not expected to plant trees on their most productive land – they will decide where to plant, with 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.
A range of temporary habitat options are available to choose from if farmers need to do more to meet the 10% requirement.
‘Welcome shift’
The woodland trust in Wales – Coed Cadw – says payments for areas of maintained woodland and natural habitats are a welcome shift from previous schemes.
Director Kylie Jones Mattock said: “Integrated approaches such as hedgerows, in-field trees, agroforestry, and woodland grazing have the potential to deliver a wide range of benefits without removing land from food production.
“These measures can improve soil health, boost biodiversity, provide shelter and shade for livestock, and help protect against the impacts of increasingly extreme weather.”
The Nature Friendly Farming Network Limited broadly welcomed the SFS but raised concerns that ministers are yet to set out details of the more ambitious optional and collaborative layers of the scheme.
Cymru manager Rhys Evans said: “If we are serious about tackling nature’s decline in Wales, these layers must be ambitious and properly funded.
“Supporting existing good practice in the sector is just as important as helping farmers transition to nature-friendly ways of working.”
The Welsh Government has committed the equivalent of this year’s BPS budget to the universal payments in 2026 (£238m for 2026 Universal and BPS payments) to provide financial stability to farmers and an incentive to join the SFS.
Minister say a “significant budget” will be provided for optional and collaborative actions, building on the preparatory phase schemes available this year.
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This is infuriating! Once again, farmers are under attack, and this time it’s disguised as some grand scheme by the Welsh Government, with Plaid seemingly beholden to globalist interests. Are they really expecting us not to see through this? Seven years—seven wasted years—only to come up with this utter nonsense! What we truly want is simple: let farmers farm—let them grow real food, raise livestock, and sustain our communities. How can anyone ignore the stark truth that 80% of Wales is farmland in some form, yet so much of it is reduced to empty fields of grass, with not a… Read more »
Imports are cheaper and people prefer cheap. We could add tariffs to support domestic production like Donny but 52% voted for global free trade deals, not to boost domestic production. That’s democracy I’m afraid.
Well the new scheme will pay Welsh Farmers to grow trees – including fruit and nut trees. Let’s see how many farmers take the opportunity to diversify and help with food security, or will they go into their default moan and complain position?.
Fruit and nut trees are a 12 to 15 year investment cycle. This proposal is only funded for one year.
20% of the farmland in the UK is marginal upland, the lowest grade of farmland that only produces 3% of UK food, mostly meat. That is probably higher in Wales. That meat is too expensive and in my case my body does not really want it, I might have a bit of lamb once a year. Nobody is stopping you producing the food but you want to be subsidised (which you frame as being attacked) since the profit motive is not enough or more likely there is little profit there. Which is it? That so many farmers have given up… Read more »
There is no ‘marginal upland agriculture’ in Wales. That is a complete misunderstanding. It is best described as Hafod or hefting. The migration of livestock through the seasons. Take advantage of upland grazing in summer and fattening in the valleys in winter. This is one of the reasons why previous SFS proposals is disjointed and impractical.
Wales procurement spend is £10 billion per annum. Food spend from Government funded organisations such as NHS, schools etc must be considerable.
Senedd should cut out the logistics organisations and give farmers ten year contracts.
Iceland Foods has plantations overseas and is highly profitable; Waitrose is not so profitable. Vertical integrated supply-chains support organisational growth.