New payment scheme for farmers unveiled amid industry doubts
The SFS will replace EU-era subsidies, which farmers had received for decades based largely on how much land they had. Most rely on these payments - an average of 67% of Welsh farm income - came from subsidies in 2020-21.
The SFS aims to reward farmers and land managers for 'public good' practices such as like wildlife habitat and soaking up carbon in the land.
Wildlife groups warned the new plan fell "far short" of helping farmers to successfully tackle climate change and nature loss.
For their initial 'universal' payment, farmers will have to agree to carry out 12 actions ranging from soil health planning and habitat maintenance, to online courses to enhance knowledge and skills related to sustainable farming.
There will also be funding to recognise "social value" - something farmers had called for - and which aims to recognise what are described as the wider benefits that sustainable agriculture provides to society, from food production to sustaining rural communities.
An extra £1,000 will go to smaller farms in 2026 as a one-off stability payment to acknowledge the uncertain period of transition.
A further optional layer of the scheme is intended to top up farm incomes for further environmental work, including woodland creation, improved public access to the countryside and support to go organic.
A collaborative payment will also be available in future to support farmers working together on landscape-scale projects.
The Welsh Government has said it will commit £238m in 2026 for the universal payments - equivalent to the current, main subsidy farms receive, known as the Basic Payment Scheme (BPS).
'Significant' funding for optional and collaborative work is also promised - with an overall budget similar to the £340m currently designated to farming.
But farming unions and environmental groups alike said far more was required - closer to £500m, to account for rising costs in agriculture and the scale of what was now being asked of farmers to deliver.
The Welsh Government said its plans will support food production and address environmental concerns
A requirement for 10% tree cover has ben dropped.
Instead the government said it was asking farmers to plant at least 0.1 hectares - or 250 trees by the end of 2028.
There would be "generous support for tree and hedgerow planting" in the optional layer, including a higher payment rate for tree planting during the first three years of the scheme.
The government is also targeting 1,500km (932 miles) of hedgerow extension by 2030, with an aspiration of achieving 2,000km (1,243 miles).
NFU Cymru said the Welsh Government's decision to slash the Basic Payment Scheme (BPS) by 40% for 2026 overshadows much of the positive work undertaken to improve the new Sustainable Farming Scheme (SFS).
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.'
He also argued that '… 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.'
Farmers Union of Wales President Ian Rickman the scheme marked 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,' he said.
'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.'
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