New Sustainable Farming Scheme 'a generational milestone'
The scheme will see new requirements for farmers which look to improve biodiversity across the country and will see the rapid phasing out of the current Basic Payment Scheme (BPS).
According to the Welsh Government, farmers in Sustainable Farming Scheme will need to have 'at least 10 per cent of their land actively managed as habitat, to benefit biodiversity and support nature recovery alongside food production'.
The current basic payment scheme will be phased out being reduced to 60 per cent in 2026 and reduced by 20 per cent per year thereafter.
NFU Cymru criticised this aspect as initially it was though that it would initially only drop to 80 per cent. It labelled the change a 'cliff edge' approach which has affected many farmers' forward planning.
What the Sustainable Farming Scheme says:
An annual Universal Payment will go to farmers joining the Scheme who follow the Scheme Requirements including a set of Universal Actions.
The Scheme has been made less complex with fewer administrative requirements. The number of Universal Actions has been cut and built on the processes and systems of Rural Payments Wales (RPW).
The combination of the Universal, Optional and Collaborative layers is intended to give stability through the Universal layer, and additional support to those who want to do more through Optional and Collaborative Actions.
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 must 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.
Farmers are not expected to plant trees on their most productive land – they will decide where to plant, with advice and guidance on putting the right trees in the right places.
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.
By the time of the Royal Welsh Show a simple ready reckoner will be available on the Welsh Government website.
Union response
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 Scheme published today represents this prolonged period of negotiation, marking a generational milestone for the future of Welsh agriculture.'
He added: "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 on those areas despite these being less prescriptive than previous agri-environment schemes.
"We also appreciate there will be concerns raised around the Scheme-level ambition to plant 17,000 hectares of trees by 2030, the potential year-to-year fluidity of the payment rates and the shorter BPS transition, which will now fall to 60% in 2026 and reduce by 20% per year thereafter.
"We have been consistent in our calls for the BPS transition to follow five equal reductions starting at 80% in 2026 as was initially proposed by the Welsh Government.
"FUW members can be assured that the Union made its position absolutely clear on these areas throughout the negotiations. I am confident that the Union has done everything in its power to represent you and your businesses throughout this process.
"This Scheme will be different to what we have historically considered as direct farm support or subsidies. I therefore urge all Welsh farmers to consider the Scheme requirements and payment rates in the context of your own businesses.'
Cliff edge in 2026
NFU Cymru hit out at a "cliff edge" in 2026 which will see basic payments cut to 60 per cent in 2026 for those opting against entering the new scheme, having previously understood it would first fall to 80 per cent.
Union president Aled Jones said: "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 January 1, 2026.
"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.'
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