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Revised scheme outline for the Sustainable Farming Scheme in Wales

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Revised scheme outline for the Sustainable Farming Scheme in Wales

The revised scheme outline for the Sustainable Farming Scheme (SFS) has been unveiled by Deputy First Minister and Cabinet Secretary for Climate Change and Rural Affairs Huw Irranca-Davies.

The SFS aims to support farmers to produce food and other goods sustainably, alongside responding to the climate and nature emergencies, conserving and enhancing the countryside and cultural resources and promoting public access to them, and also promoting and facilitating the use of the Welsh language.

The SFS is due to be phased in over a transition period starting in 2026, replacing legacy EU farm support arrangements. We’ve been involved in the SFS Ministerial Roundtable and stakeholder groups that were formed earlier this year to guide the development of the scheme.

What does the revised scheme consist of?

The scheme has retained its framework of a Universal layer for all, with additional Optional and Collaborative Actions for farmers who choose to do more. Welsh Government has clearly listened to and acted on the concerns raised by many farmers who responded to the ‘Keeping Farmers Farming’ scheme consultation at the end of last year.

The Universal Actions have been simplified and reduced in number (see below). The Outline Scheme still contains a welcome focus on soils, hedgerows, habitats and animal health and welfare. The scheme rule requiring each farm to hold at least 10% cover of managed habitat has been retained, but the hotly contested ‘10% tree cover’ rule that sparked widespread protests in February has been removed. As explored in a previous blog post under this proposal each farm entering the scheme would be required to hold at least 10% cover of trees or woodland by 2030 (the average tree cover on farms in Wales is 6-7%). The revised Scheme Outline instead introduces a scheme-wide target for average tree cover on farms – yet to be determined - and a new Universal Action that requires each farm to produce a tree planting and hedgerow creation opportunity plan and demonstrate progress in implementing the plan by the end of the 2030 scheme year.

Acknowledging the need for change

Welsh Government rightly acknowledge that the nature and climate emergency is the main risk to food production over the long term, and that natural ecosystems are the best defence available to help adapt to and mitigate the impacts of climate change.  Food retailers, financial institutions, and private investors are also pushing for more climate and nature outcomes from farming. This pressing agenda highlights the urgent need for a clear pathway for agriculture’s contribution to targets for climate and nature in Wales. The stripped-back requirements of the Universal layer appear to fall short of what is required.

There is an element of practical necessity behind this, as the Scheme's success depends on achieving sufficient farmer participation to achieve its ‘Sustainable Land Management’ goals at scale.  Welsh Government have long asserted that the scheme is being designed so that all farmers can access it.  A significant proportion of farms in Wales are unlikely to be viable without farm support payments. If farmers shun the scheme and intensify production to maintain viability, targets for climate and nature will slip further from reach. The Universal layer could therefore be regarded as an initial step towards supporting low carbon, nature-positive sustainable food production at scale.  

Elements needed to succeed

Whether the scheme can break into a stride depends on when and how it drives the growth of nature-friendly farming in Wales. We have long called for Welsh Government to allocate the bulk of the scheme budget to actions that support this approach, and to ensure that those farmers who already farm with nature are not left behind.  We’re particularly concerned that there is no mention of Optional layer support for certified organic farmers in the revised Scheme Outline, contrary to previous indications. The organic sector needs more certainty that support for organic farming will be available in 2026, with a seamless transfer from the Organic Support Payment 2025 and renewed support for organic conversion.

Risks to success

Current pressures on government funds are a reminder that the scheme will need to do more than make small steps towards Sustainable Land Management if it is to protect its budget against competing priorities. The Welsh Government budget cuts in 2023 hit rural affairs spending the hardest. Despite an additional £1.7 billion being made available to Wales next year in the UK Budget the additional cash has been linked to investment into schools, housing, health and social care, and transport. From 2026 agricultural funding for the devolved nations will be allocated by Westminster using the Barnett formula, a calculation based on population, rather than via a separate, ring-faced allocation as has historically been the case. This could see Wales’ proportion of total UK agricultural funding fall drastically.

We therefore need to see scheme processes and incentives that help turn the farm plans and data generated in the Universal layer into whole-farm actions in the Optional and Collaborative layers of the scheme. Payment rate incentives, increased advice and training, and investment to develop farm woodland markets all have a role to play. It will take serious effort, resource and leadership by government and all stakeholders to scale up the provision of farm advice and farmer-to-farmer knowledge transfer. If these issues are not addressed, the SFS will fail to deliver on its promise to build a more sustainable future for Welsh farming.

Consultation

In our response to the SFS consultation earlier this year we called on Welsh Government to ensure farmers know what they are going to need to do to meet statutory targets and provide the information and support to enable them to make informed choices within the SFS. The SFS Carbon Sequestration Evidence Review Panel identified a suite of Optional Actions that deliver carbon sequestration that are additional to those already proposed in the Scheme.  These include habitat restoration and creation, diverse and deep rooting leys, rotational grazing and biomass crops.  These actions have a range of potential sequestration benefits. Welsh Government will need to assess and model how they could be incorporated into the SFS, but we note that the Climate Change Committee’s advice is that there is no credible route to achieving net zero without an increase in tree cover.

The revised Scheme Outline will now be used to underpin a new economic analysis and impact assessment of the Universal layer of the scheme before Welsh Government Ministers make final decisions next summer. The SFS Ministerial Roundtable groups will continue to contribute to this process. We will continue working with Welsh Government and the rural sector to ensure the scheme helps to build a more sustainable future for Welsh farming. 

 

The revised SFS Scheme Outline

The revised Scheme Outline contains fewer Universal Actions (reduced from 17 to 12).  Universal Actions for heavily modified peatland and the provision of ponds and scrapes have been made Optional, and three Universal Actions covering Animal Health, Welfare and Biosecurity have been simplified and combined into a single Universal Action.

The scheme rule requiring each farm to hold at least 10% cover of trees or woodland has been replaced with a scheme-wide target (yet to be determined) and a requirement that each farm must produce a tree planting and hedgerow creation opportunity plan and demonstrate progress towards implementing the plan by the end of the 2030 scheme year.

The Universal Action requiring all hedges on farms to achieve good condition has been replaced by a requirement that all trimmed hedges must be allowed to grow thicker and taller through incremental trimming at no less than 2 year intervals. 

The Universal layer still contains

  • a requirement for each farm to hold at least 10% cover of managed habitat. Temporary habitats suitable for diverse farming systems and land ownership such as rough grass margins and herbal leys count towards the 10%.
  • actions for farm benchmarking, Continuous Professional Development, Integrated Pest Management, designated site management plans, hedgerow management, historic landscapes and animal health and welfare
  • action for soil testing – with the intention that data on nutrient levels, pH and organic matter content of soils that receive inputs can be used by the farmer to target inputs to reduce waste and improve efficiency or support changes to more sustainable farming practices such as new multispecies leys and rotational grazing to increase species diversity and rooting depth.
  • actions to create temporary habitats and new woodland and agroforestry

The Deputy First Minister and Cabinet Secretary for Climate Change and Rural Affairs also confirmed that

  • The Basic Payment Scheme will continue on a time limited basis.
  • Habitat Wales Scheme will be offered in 2025 with all eligible individual farmers able to apply.
  • Habitat Wales Scheme Commons agreements can be extended for 2025.
  • The Organic Support Payment will be maintained for 2025.

 

Read other articles about the SFS

 

Andrew Tuddenham Andrew Tuddenham