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The Sustainable Farming Scheme consultation is over – so what’s next for farming in Wales?

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The Sustainable Farming Scheme consultation is over – so what’s next for farming in Wales?

Welsh Government’s ‘final’ consultation on the Sustainable Farming Scheme (SFS) ended in early March. The scheme is being developed to replace EU farm subsidies and is due to launch in 2025.

The latest proposals sparked a huge response from the farming industry, culminating in a mass gathering outside the Senedd (Welsh Parliament) on 22 February, the largest protest in the Senedd’s history. As Welsh Government analyses the feedback and Huw Irranca-Davies MS, the new Cabinet Secretary for Climate Change and Rural Affairs considers how to develop and deliver a scheme over the remaining months of this year, here’s a summary of Soil Association Cymru’s consultation response.

Nature friendly and organic farmers cannot wait

Overall, we can see that the SFS proposals are intended to help more farmers adopt nature-friendly farming practices. This is welcome, but we’re concerned that those farmers who already farm with nature have been left vulnerable following recent cuts to agri-environment scheme budgets. The significantly reduced funding for the current Habitats Wales Scheme relative to the previous Glastir scheme has set a worrying precedent for the SFS. Nature-friendly and organic farmers cannot afford to wait much longer whilst the Optional and Collaborative layers of the scheme are developed and introduced at a later stage in the SFS transition period.

Soil Association's response

Therefore we’re asking Welsh Government to commit to introducing Optional and Collaborative layer support for agroecological and organic practices by 2026 and allocate at least 50% of the scheme budget to the Optional and Collaborative layers by the end of the transition period.

Given the debate around the proposed scheme rules we’ve also questioned whether the SFS Universal layer should be designed to meet the specific needs and constraints of the largest and most intensive farms in Wales, which can also be the least reliant on current support. Not all farm holdings, notably very small ones, have been able to take advantage of farm support from the Common Agricultural Policy. The SFS has the potential to rectify this and support a majority cohort of small, less intensive farms which are better placed to deliver on farm benefits for sustainable food production using trees and habitats.

Government support alone is unlikely to deliver a transition to sustainable farming for the most intensive systems in a way that does not use up the majority of the budget. Welsh Government has an opportunity to establish a sustainable farming pathway for all farms in Wales but must also bring regulation, private finance and other market solutions into play alongside scheme support payments in a way that works for these intensive systems and secures best value for public money.

Universal layer rules for trees and habitats

The proposals included a requirement that all farms entering the SFS should hold a minimum 10% cover of trees/woodland and 10% cover of managed habitats. The SFS Universal Baseline payment would include an area payment for the cover of trees, hedges and habitats, and payments would be available to establish more trees and temporary grassland habitats (rough grass margins and herbal leys, for example) if required to achieve the 10% thresholds.

 

In more detail

Trees and woodland and the 10% tree rule

We think that it is right that Welsh Government maintain a focus on tree cover on farms in the SFS. The proposals now rightfully place more emphasis on the productive benefits and climate resilience that comes from farming with trees. But we also recognise that farmers who are below the 10% tree and woodland target are being asked to commit to the SFS based on a lack of certainty about whether the budget for maintaining anything they create will be there in future. And it has become clear since the previous SFS consultation (2023) that significant numbers of farmers do not see the opportunities or are not persuaded that their business model could be adapted to enable greater integration of trees on farm.

Different farm types experience different obstacles in a 'universal' system

The dairy sector appears to have greatest difficulty in accommodating the proposed 10% trees scheme rule, in terms of current levels of tree cover and the apparent capacity of this farm type to hold more trees. We suggest that this reflects that many of these systems are constrained by farming intensity.

The current debate around the proposed 10% tree cover rule highlights the reality that farms are complex, interconnected ecological systems and that the delivery of one scheme target – an expansion of tree cover – may be difficult to achieve using a generic and mandatory approach within the Universal layer.

Sensible exemptions to the 10% rule are already proposed for tenant farmland and for those areas unsuited to woodland cover, and more could be offered, such as to prioritise the most capable and versatile grades of land. However, further exemptions to the 10% rule risk adding further complexity to what is already seen by some farmers to be a prohibitively complex Universal layer.

Taken further, delivery of the Universal target could no longer be considered truly universal, whilst the principal source of complaint – that fundamental land use and business choices are to be mandated by government as a condition of financial support – remains unresolved. Without buy-in from farmers the SFS will fall short in its delivery of the Sustainable Land Management objectives of the Agriculture (Wales) Act 2023.

Benefits of a whole farm approach

Many organisations, including the Soil Association, advocate for a whole farm approach as part of the shift towards more sustainable farming. We suggest that this approach could help to integrate more trees onto more farms if a SFS target for woodland creation were implemented through the Optional layer and tailored around the specifics of the individual farm using a whole farm plan.

Consider the benefits of trees at a societal level

The Universal Baseline payment should also reflect the ‘social value’ of woodland management actions, these being the benefits to society that come from the natural environment, such as carbon sequestration or reduction in emissions; air pollutant removal by woodland; benefits from recreation; benefits from physical health; water quality, water supply and food risk management benefits; and biodiversity benefits. We are concerned that if area payments continue to be based on a costs incurred and income foregone model, they will be too low to support those farm systems that are already delivering or capable of delivering sustainable land management improvements for nature, water and soils. So we support a move to paying for social value underpinned by a natural capital approach. The SFS provides a critical opportunity to move away from BPS and impart true financial value to trees and woodland on farms.

10% habitat rule

We see no conflict between sustainable food production and a requirement to hold at least 10% land managed as habitat as defined in the proposals. The habitats required to meet a shortfall in the 10% rule have little to no impact on production. Studies have shown that there can be no difference in average growth rate between cattle grazed on herbal leys and ryegrass swards. The temporary habitats may be ecologically modest relative to priority habitat types but if created at scale could make a significant contribution to nature in Wales. From a sustainable food production stance there is no reason for Welsh Government to make the 10% habitat scheme rule optional.

Organic farming systems are entirely capable of delivering the temporary diverse leys proposed under the 10% habitat rule, but costs of establishment can be greater for organic farms due to the cost of organic seed and restrictions on soil additives as required for sward establishment. We’ve asked that additional support may be required to help organic farmers establish mixed leys on improved land if required to meet the 10% habitat rule.

Universal Action 3 (UA3): Soil Health Planning

We don’t think that UA3: Soil Health Planning would on its own go far enough to incentivise the reduction in manufactured fertiliser use on the scale that is needed to restore soil health - we believe there should be an Optional action available for farmers using no manufactured fertiliser.

Universal Actions for farm recording and benchmarking

Several Universal Actions appear intended to enable improvements to farm management and performance, but the policy intent should be made clearer, setting out the case for how these actions benefit farmers and government.

We strongly support the ambitions outlined for farmers to have access to their data.
If taken in isolation, single key performance indicators (KPIs) could drive unsustainable outcomes. Critically a singular focus on daily liveweight gain militates against slow growing native breeds that have an important role in low input systems and the management of habitats and biodiversity.

According to the Centre for Innovation Excellence in Livestock‘s Net Zero Carbon & UK Livestock Report (2020)6, “typically outputs do increase when efficiency increases i.e. more is produced and so net emissions remain comparable. This needs to be avoided to achieve net zero.”

Stability payment

We’ve welcomed the proposal to provide a Stability Payment for organic farmers to reflect their previous income from BPS and the Organic Support Payment 2024. To provide clarity and demonstrate a commitment to Sustainable Land Management we’re encouraging Welsh Government to operate the Stability Payment as a temporary measure for the 2025-2029 transition whilst ensuring that a suite of Optional and Collaborative actions are brought forward at the earliest opportunity in transition.

We also believe that very small farms such as small-scale horticulture producers are unlikely to receive sufficient financial incentive from an area-based Universal Baseline payment model. Additional support would likely be required to help these producers enter the SFS Universal layer to gain access to the Optional and Collaborative layers.

Optional and Collaborative actions

We’ve urged Welsh Government to introduce Optional actions for organic farming in 2026 to enable a seamless transfer from the SFS Universal layer in 2025 (with Stability Payment applied for recipients of Organic Support Payment 2024).

The Welsh Organic Forum’s gap analysis (2023) identifies a set of Optional actions required for organic:

  • Farming without use of manufactured nitrogen and with a reliance on organic matter from crops and livestock, crop rotation standards, legumes, nutrient cycling, crop rotations and avoidance of bare soil
  • Farming without use of herbicides or growth regulators, and with a reliance on cultural controls and natural predators
  • Restrictions on non-organic inputs
  • Limited use of a number of permitted pesticides derived from natural sources
  • Requirement to use breeds suited to local conditions
  • At least 60% of livestock diet derived from the farm holding
  • Stocking density limit
  • Farming to promote biodiversity across whole farm area, guided by a conservation plan for all habitats, including non-designated sites
  • System-level approach to disease risk, achieved through:
  • Animal health plan with annual review
  • No chemical allopathic vet meds for preventative use
  • Restrictions on number of treatments
  • No hormones, embryos and cloning
  • No growth promotors and synthetic amino acids
  • Convy of continuous organic farming

We’ve also called for Welsh Government to bring forward Collaborative actions to manage and create joined up woodlands across landscapes and to reduce nitrogen losses at catchment scale.

What else?

The success of the SFS will require action across a range of related policy areas:

  • Communications. The SFS urgently requires a strategic route map that clearly sets out what transitional schemes, SFS layers and SFS actions will become operational during transition and what will happen to legacy schemes during this time. Scottish Government’s Agricultural Reform Route Map (June 2023) offers a model to help the farming sector in Scotland plan ahead – Welsh Government should learn from this.
  • Scheme advice. We want to see a significant investment in advisory services to better deliver the aims of the scheme. This should operate alongside a wider move within the agricultural curriculum to train the next generation of farmers and farm advisors to equip Welsh food and farming sectors for the future.
  • Market development. SFS support for sustainable food production should be delivered within a strategic, joined-up approach to food, farming and public procurement to increase the supply and local consumption of sustainably produced food. For organic, a Welsh Organic Action plan is needed to shape this approach – the previous plan expired nearly 15 years ago. Refocusing public procurement is a strong way Welsh Government can focus the market and ultimately incentivise Sustainable Land Management. Public procurement should be used to incentivise and reap the benefits of expanding horticultural production in Wales in particular.
  • Regulation. We supported the Agriculture White Paper (2020) proposals to consolidate existing agricultural legislation under a set of National Minimum Standards (NMS), applicable to all farmers in Wales. It’s a concern that the SFS consultation proposals refer only to scheme rules and not to the NMS framework. There are potential risks to soils, water, and biodiversity arising from further intensification of agriculture if farmers choose not to participate in the SFS. Furthermore, value for public money is reduced if SLM gains secured through scheme payments are offset by regulatory failure to control damaging practices or pollution on the same farm or elsewhere. An effective regulatory baseline must be maintained for all farmers in Wales, not just those within the SFS. 

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Andrew Tuddenham Andrew Tuddenham