**Welsh Government Unveils Final Details of Controversial Farming Scheme**
After months of heated debate and widespread protests from the agricultural community, the Welsh Government has released the finalised version of its new farming payment scheme. The Sustainable Farming Scheme (SFS), which replaces the European Union’s previous subsidy system, has been the subject of extensive consultation following backlash over its earlier drafts.
In February 2024, a large-scale protest took place outside the Senedd, seeing farming families and workers from across Wales expressing their concerns over the initial proposals. Many in the industry feared the changes could have devastating effects on Welsh agriculture, with potential job losses and viability issues across all types of farms.
Since then, government officials have held significant discussions with farming representatives to reshape the scheme. The new SFS is set to be implemented from 1 January 2026 and, according to ministers, aims to be more straightforward and accessible, reducing the number of mandatory ‘universal actions’ from 17 to 12. This effort to streamline requirements, the government states, is intended to ensure participation from all farm types – whether small family enterprises or larger arable or dairy operations.
One of the most divisive aspects of the original plans was the stipulation that farmers would have to plant trees on 10% of their land in order to qualify for payments. Many farmers warned that such a rigid rule could render large portions of productive farmland unusable and threaten jobs. The government has now dropped the blanket tree-planting rule, a move broadly welcomed by campaigners. However, there remains a target to establish at least 17,000 hectares of new woodland across Wales by the end of the decade. Additionally, every farm entering the SFS will be expected to manage at least 10% of their land as wildlife-friendly habitat.
Farmers wishing to join the SFS will need to agree to undertake a series of actions, ranging from soil management and conservation activities through to ongoing professional development via online courses. The scheme also provides for “optional” and “collaborative” pathways, offering additional payments to farmers who go beyond the base requirements, such as creating woodlands or hedgerows.
Financially, the transition from the EU’s Basic Payment Scheme (BPS) to the SFS will see a rapid reduction in the former. While it was initially planned that BPS payments would drop by 20% in the first transition year, this has now increased to a 40% reduction in 2026, with the payment being phased out entirely by 2029. To help smaller farms navigate this change, the Welsh Government has announced a one-off £1,000 stability payment for the 2026 scheme year.
Reactions from across the agricultural sector have been mixed. Ian Rickman, President of the Farmers’ Union of Wales (FUW), noted that while positive steps have been taken, elements of the scheme remain problematic. “We accept that the scheme is not perfect. The 10% habitat rule and the management requirements for those areas will be a concern for many, despite these being less prescriptive than previous agri-environment schemes,” he commented, reflecting a cautious welcome.
Environmental groups have greeted aspects of the revised SFS positively, especially the focus on woodland and habitat creation. Coed Cadw, the Woodland Trust in Wales, described the changes as a “significant policy shift” but urged the government to ensure robust monitoring and to provide increased funding for the more ambitious, voluntary aspects of the scheme.
Victoria Bond, director of CLA Cymru, which represents landowners in Wales, echoed these sentiments, welcoming the collaborative approach taken during negotiations. However, she expressed frustration over a static budget and the fast-tracking of BPS reductions, though she recognised improvements such as the inclusion of payments for common and designated land.
As the Welsh agricultural sector prepares for the new SFS, questions remain about the practicalities of meeting habitat and woodland targets and the real impact on farm businesses large and small. The next 18 months will prove crucial as the sector moves towards these significant reforms, seeking reassurance that both food production and environmental sustainability can be achieved in balance.
With official implementation set for January 2026 and a timetable for subsidies winding down, all eyes will be on the government and agricultural leaders to ensure a smooth and fair transition for Welsh farmers.