On 15 July, the Welsh Government unveiled its long-awaited Sustainable Farming Scheme (SFS), which will launch in January 2026 and replace the Basic Payment Scheme (BPS). The BPS, in place since Wales left the EU’s Common Agricultural Policy, will be phased out gradually between 2026 and 2029.

The announcement follows over seven years of policy development, with the first public consultation Brexit & Our Land, published in July 2018 and the most recent, Sustainable Farming Scheme: Keeping Farmers Farming in December 2023.  The latter included a proposal for 10% tree cover on all farms, which has been abandoned following farmer protests. 

The SFS will comprise three categories of payment: Universal, Optional and Collaborative. All farmers participating in the SFS must complete all Universal Actions in order to receive any payment, unless these are not relevant to their farm (e.g. farms without livestock do not need to complete animal welfare actions). These actions include, amongst others, soil testing, hedgerow management, woodland maintenance, carbon baselining, and protection of historic environment assets. Scheme participation also depends on meeting the SFS Regulatory Baseline, which includes various regulations already set out in law including from Cross Compliance, non-native invasive species and public access.  SFS participants must also meet a Universal Code covering additional obligations on biodiversity, habitats, soils trees and landscapes.   

The Universal Payment is intended to reflect the cost of the actions plus their estimated social/public benefit. In order to provide financial stability, the Welsh Government has committed to ensuring that the Universal Layer will receive the same level of funding in 2026 as BPS receives in 2025.

Optional actions available from 2026 will include measures to improve soil health, enhance habitat management, create woodlands and agroforestry, restore hedgerows, expand public access, and reduce air and water pollution. Support for organic farming and advanced professional development will also be available. Specific collaborative actions are not listed, but will be developed under themes such as innovation and research, supply chain collaboration, and landscape-scale environmental projects.

Photo by Mike Erskine on Unsplash